The Port Authority of New York and New Jersey yesterday decided to take prompt legal action to halt the ports deal through the courts.

The suit, which will be filed in the Essex County Superior Court on Friday, will attempt to void the Peninsular and Oriental Steam Navigation Company deal by citing the contract under which P&O operate in the two states. According to the agreement, the Port Authority must approve any change of ownership of companies in the ports and apply for a “reassignment,” which the authority has decided not to grant.

The nub of the argument in yesterday’s authority meeting revolved around the difference between foreign companies who operate in New York and New Jersey ports and, as in the case of Dubai Ports World, which is in the process of buying P&O, a company which is wholly owned by a foreign government.

One Port Authority member, who is hostile to the DPW deal and wished to remain anonymous because authority meetings are deemed confidential, said the authority concluded the DPW deal was “like putting the fox in charge of the henhouse.”

In addition to P&O, two of the five companies that lease port facilities from the Port Authority of New York and New Jersey, are subsidiaries of foreign-owned companies, one a Hong Kong company with possible ties to the Chinese government.

New York Container Terminal Incorporated, which operates the Howland Hook Marine Terminal in Staten Island, is owned by a Hong Kong-based shipping company with overseas port and property interests, Orient Overseas (International) Limited.

A company controlled by the Hong Kong tycoon Li Ka Shing bought $22.5 million shares in a private deal with one of its most substantial investors, Tung Chee Hwa, the former chief executive of Hong Kong and brother of OOIL’s chairman, Tun Chee Chen.

In May of 2003, a conglomerate Mr. Li controlled pulled out of an attempt to purchase the American telecommunications company Global Crossing Limited after the Committee on Foreign Investment in the United States, the federal committee that approved DPW’s proposed takeover of P&O, said it would conduct an in depth investigation of the deal, citing national security concerns.

Later that month, the London Evening Standard, reported that a defense committee in India had blocked the same conglomerate, Hutchison Whampoa, from buying the Nhava Sheva container terminal near Mumbai because Mr. Li’s ties to the Chinese government could pose “serious security implications.”

The president of New York Container Terminal Incorporated, James Devine, told The New York Sun, “There is no involvement of the Chinese government” in the company.

“The fact that we’re owned by a Chinese company is irrelevant from a security standpoint,” he said, because the Coast Guard closely monitors all ship traffic, and the U.S. Customs and Border Protection Agency monitors all the cargo.

“If I were a terrorist – and I’m a very hands on manager – I could do nothing. I couldn’t control what came off the ship, I couldn’t control what came on the ship, I couldn’t control a ship coming or going from this facility unless U.S. Customs and U.S. Coast Guard gave me permission to do it,” he said, adding that the same held true for DPW. “That security issue is a red herring.”

Another foreign company, A.P. Moller-Maersk, an international corporation based in Copenhagen, owns APM Terminals, which operates facilities at Elizabeth Port Authority Marine Terminal in New Jersey. It also owns 50% of the Port Newark Container Terminal, the other half of which would be taken over by DPW should its merger with P&O go through on March 2 as planned.

A spokesman for the Danish company’s American branch, Gordon Dorsey, said the company made a point to follow all security regulations, which he believed were effective.

The other two companies who lease port facilities from the Port Authority are American Stevedoring Incorporated and Maher Terminals, a family owned New Jersey Company.

A spokesman for the Port Authority, Steven Coleman, said the agency’s concern was the Dubai ports deal, and that he did not want to comment on other tenants at the Port of New York and New Jersey.