Commercial Arbitration

Last verified on Thursday 2nd April 2020

Commercial Arbitration: Colombia

Diana Correa

Diana Correa International

Infrastructure

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Colombia

Colombia is a state party to the New York Convention. It was approved by means of Law 30 of 1990 with no declarations or reservations.

Answer contributed by Diana Correa

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Colombia

Colombia is a state party to the Inter-American Convention on Extraterritorial Validity of Foreign Judgements and Arbitral Awards, approved by means of Law 16 of 1981; the Inter-American Convention on international commercial arbitration, approved by means of Law 44 of 1986; and the Convention on the Settlement of Investment Disputes between States and National of other States, approved by means of Law 267 of 1996.    

Answer contributed by Diana Correa

3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Colombia

Law 1563 of 2012 is the formal statutory framework for national and international arbitration under a dualistic regime. International Arbitration is covered under section III, which is indeed based on the UNCITRAL Model Law. Article 62 defines the circumstances under which arbitrations are deemed to be international, and establishes that provisions of section III are only applicable to international arbitral proceedings having their seat in Colombia. 

Furthermore, the Colombian Congress is debating a draft Law aiming at introducing some changes in the current Law, which maintains the dualistic regime and does not depart from the UNCITRAL Model Law. As for article 62 of Law 1563 there are some changes in the draft Law mainly to (i) clarify that both, private and public parties, may participate in international arbitrations, (ii) take sides with a more liberal economic approach to identify when an arbitration is deemed to be international, (iii) add further developments regarding multi-domiciles of foreign companies. The draft has been approved in the first debate but still has to go through other rounds of debates in Congress.

Answer contributed by Diana Correa

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Colombia

There are three internationally relevant arbitration bodies based in Colombia. These are the Centre of Arbitration and Conciliation of the Chamber of Commerce of Bogotá (CCB), the Centre of Conciliation, Arbitration and Amicable Composition of the Chamber of Commerce of Medellín (CCM), and the Centre of Conciliation, Arbitration and Amicable Composition of the Chamber of Commerce of Cali (CCC). Those Centres have their own international arbitration set of rules as well as a list of national and international arbitrators. They can also act as appointing authorities.

In addition, the draft Law provides a new provision, applicable only to international arbitrations, by which the appointing authority is the Hague Permanent Court of Arbitration (PCA) as set forth in such law.

Answer contributed by Diana Correa

5. Can foreign arbitral providers operate in your jurisdiction?

Colombia

There is no legal limitation for foreign providers to operate in Colombia either directly or through cooperation agreements with Colombian arbitral institutions. An example of this is the agreements between the CCB and the International Centre for Settlement of Investment Disputes (ICSID), the International Chamber of Commerce (ICC) and the International Centre for Dispute Resolution (ICDR), respectively. Law 1563 of 2012 does not restrain the parties' choice regarding the arbitral institution and so they can also choose a foreign provider that would administer the proceeding from its offices abroad. When hearings or any other activity in international arbitrations ruled under foreign arbitral providers’ rules take place in Colombia, they can be conducted using the facilities of local Arbitration Centres.

Answer contributed by Diana Correa

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Colombia

No, there is not. International arbitration issues fall under the competence of regular judicial authorities. As established in article 68 of Law 1563 of 2012, those authorities are the civil and administrative judges, the Civil Chamber of the Supreme Court of Justice, and the Third Section of the Administrative Chamber of the Council of State. The judiciary in Colombia is getting more familiar with the practice of international arbitration, and it is becoming more supportive of it especially under the lead of the Supreme Court of Justice, particularly when it comes to the recognition and enforcement of foreign arbitral awards (please see answer to question 45).

Answer contributed by Diana Correa

Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Colombia

According to article 69 of Law 1563 of 2012, arbitration agreements shall be made in writing. Such a requirement is fulfilled as long as the content of the agreement is recorded. The parties can thus reach it orally, through their actions, or by any other way. Likewise, an arbitration agreement is deemed to be in writing when, in the exchange of the initial statements, one of the parties asserts its existence and the other one does not deny it. The draft Law strengthens this idea. Also, the draft Law allows an arbitration agreement in a different document than the contract, as long as any provision of the latest makes reference to such arbitration agreement as being part of the contract. Regarding the public entities’ consent to arbitrate, there is a constant jurisprudence from the Council of State by which such an agreement must be express, clear and unequivocal. Furthermore, the parties may agree to arbitrate existing or future disputes.     

Answer contributed by Diana Correa

8. Are any types of dispute non-arbitrable? If so, which?

Colombia

By and large, disputes related to the rights that the parties are not entitled to waive cannot be subject to arbitration. The possibility to waive a right depends on its nature and will be explicitly determined by the legislator. For instance, according to articles 2473 and 2472 of the Civil Code, marital status and future maintenance obligations are excluded from arbitration.

The Colombian Constitutional Court has also emphasised that certain rights regarding Colombia’s sovereignty are not subject to arbitration, such as public and security order, constitutional order, and all public matters exclusively related to the State. Similarly, as per article 88 of Law 1437 of 2011, only administrative judges can determine the validity of administrative acts.

Also, it is not possible to waive the recognition and validity of moral rights regarding licenses, brands or industrial designs, as established by the Andean Community in its Decision 468 dated 2000.

Given Colombia’s history with land conflicts, Law 1776 of 2016 forbids any arbitration agreement related to contracts where it is discussed the background, features or productive effects of a rural area.

Also, group and class actions are non-arbitrable, unless there is existing consent through an arbitration agreement, with regards to this proceeding and in specific fields, such as Shareholders’ disputes.

Finally, the Colombian Labour Law indicates that there are disputes related to certain minimum rights that cannot be settled via arbitration. Rights such as the recognition of equality of opportunities, minimum wage, work stability, and the unwavering rights of the Colombia’s work Code.

Answer contributed by Diana Correa

9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Colombia

Law 1563 of 2012, at article 37, provides the participation of third parties in domestic arbitration under some procedural forms, and the draft Law is even enlarging this option by stating that when a third party has guaranteed obligations of a contract containing an arbitral agreement, the third party will be tied to this arbitral agreement.

Nevertheless, Law 1653 of 2012 is silent regarding the participation of third parties in international arbitration. Article 69 is clear, however, in establishing that an arbitration agreement is such when there is consent to arbitrate a dispute or a set of disputes. It could, therefore, be said that, in principle, a third party would be bound by an arbitration agreement provided it gave its consent, regardless of any specific procedural vehicle.

It is, in any case, a controversial issue in Colombia and there are some contradictory arbitral and judicial decisions on it. The core of the discussion is the extent to which a third person can be deemed to be included in the parties’ consent to arbitrate. In fact, it has been highlighted that such consent must be express and individual and must have a specific, objective and personal scope.

In the case of guarantee agreements, for instance, it has been argued that, just as the beneficiary of the agreement does not share the same rights and obligations that the parties have, then it could not be said that it benefits from the arbitration clause itself. Therefore, although the beneficiary is the direct creditor of the main object of the contract, it could not be inferred that he would necessarily consent to arbitrate the disputes in which he could be involved.

Some other decisions, on the contrary, have taken a different approach depending on the specific type of the agreement and the nature of the duties undertaken by the parties and the beneficiary. In some cases, the theory of linked contracts has served as a legal foundation to allow the involvement of thirds in arbitration procedures.

 

Answer contributed by Diana Correa

10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Colombia

Law 1563 of 2012 does not regulate the possibility of consolidating separate arbitral proceedings. However, the draft Law provides a new article 20, applicable to domestic arbitration, to introduce a procedure to consolidate separate arbitral proceedings at any moment before the Tribunal fixes its fees, and under any of the following events: (i) by agreement of the parties, (ii) when all the requests for arbitration have been filled under the same arbitral agreement, and (iii) when the requests for arbitration have been submitted under different arbitral agreements, but those proceedings have in common the same parties, the disputes are based in the same contractual relation, and the Tribunal decides the arbitral agreements are compatible.

In the meantime, because the draft Law has not been approved yet, the consolidation of arbitrations would directly depend on the rules the parties decide to apply. The rules for international arbitration of the CCB and the CCC do not provide anything in this regard either.

Under the rules of the CCM (article 182), however, a consolidation request may be filed before the centre and it will be decided by the arbitral tribunal that was constituted first among the different proceedings. The consolidation will proceed provided that: (i) all of the parties agreed on it; (ii) the proceedings are administered by the CCM and the underlying arbitral agreement is the same; or (iii), in case the arbitral agreements are different, the consolidation may be done as long as they are deemed to be compatible, the parties are the same, and the disputes have arisen from the same legal relationship.

The parties may agree on the proceeding under which the consolidation shall be made. If no agreement is reached, it will be the proceeding with the oldest starting date (date on which the request of arbitration was presented before the CCM as established in article 178-2). If two proceedings have the same starting date, the consolidation shall be done under the one where the request of arbitration was served to the respondent first.

Answer contributed by Diana Correa

11. Is the "group of companies doctrine" recognised in your jurisdiction?

Colombia

Colombian law does not provide for the ‘group of companies doctrine’ in particular. The extension of the arbitral agreement to non-signatory companies will most probably be determined based on the existence of consent and the linked contracts theory.

Answer contributed by Diana Correa

12. Are arbitration clauses considered separable from the main contract?

Colombia

Yes. Pursuant to article 79 of Law 1563 of 2012, the arbitration clause is separable from the main contract, and as such may survive the nullity or invalidity of the contract containing it.  

Answer contributed by Diana Correa

13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?

Colombia

Yes, it is recognised. According to article 79 of Law 1563 of 2012, the arbitral tribunal has the exclusive authority to decide on its competence, including the objections filed against its jurisdiction and against the merits. Consequently, the parties could not ask the courts to determine any issue related to this matter. This principle has been respected, even recently, by the Colombian judiciary. Finally, the draft Law provides that when an arbitral tribunal has decided that it has no jurisdiction to decide the disputes the parties have submitted for resolution before it, this decision (award) may only be challenged by an annulment procedure.

Answer contributed by Diana Correa

14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Colombia

Parties to the arbitral agreement should considerate components such as the seat of the arbitration, language, the procedural rules (particularly if there is no reference to a place of arbitration), the applicable law, any confidentiality duties, the number of arbitrators, and any agreement on the allocation of costs. When the underlying contract is a multiparty one, it is especially important to agree on the mechanism of appointment of arbitrators, the possibility of consolidation of proceedings and the participation of all of the parties. One good thing with Colombian arbitration law is that the parties to the arbitral agreement, if both residing abroad, can waive the annulation proceedings (article 107 of Law 1563). If there is any public entity giving its consent to arbitrate it is important to keep in mind that such a consent must be delivered expressly, clearly and unequivocally. Also, attention should be drawn to the fact that the Presidential Directive No. 4 of 18 May 2018 has forbidden, in public contracts, to include the ICSID arbitration rules.

Answer contributed by Diana Correa

15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Colombia

Both, ad hoc and institutional arbitrations are recognised by Law 1563 of 2012 at article 2. However, institutional international arbitration is more common in Colombia than ad hoc international arbitration. When opting for ad hoc arbitration, parties will probably choose to apply the UNCITRAL Rules.

Answer contributed by Diana Correa

16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Colombia

Multi-party agreements have no different rules under Colombian law and should follow the same regime set-up for bilateral agreements. In the event where the tribunal is to be composed by three arbitrators and each party to the arbitration has several members, article 74 of Law 1563 of 2012 requires them to act jointly in appointing each party’s arbitrator. If they fail to do so, then either party will be entitled to request the intervention of a judicial authority to make the appointment or to adopt any necessary measure. As recognised by article 74 of Law 1563, however, the parties can agree on a different appointing mechanism, including the one set forth in the Arbitration Rules of the Arbitration Centre administrating the case. As mentioned above in question 4 that the draft Law provides a new provision, applicable only to international arbitrations, by which the appointing authority is the PCA.

Answer contributed by Diana Correa

Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Colombia

As established in article 94 of Law 1563 of 2012, and unless otherwise agreed by the parties, the arbitral proceeding will start on the date the respondent receives the request of arbitration. The date of submission of the statement of claim will be determined by the parties or by the tribunal as provided for in article 96 of Law 1563. It makes part of the time limits imposed by the common legal regime to the claims so that they are not subject to any bar, but they do not really depend on the arbitration rules.

Answer contributed by Diana Correa

Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Colombia

Pursuant to article 101 of Law 1563 of 2012, the arbitral tribunal will apply the substantive law agreed upon by the parties. Reference to the law of a particular jurisdiction shall be understood as made to the substantive law of such a jurisdiction and not to its law on conflicts of laws. If the parties fail to choose the governing law, the tribunal will apply the law it deems pertinent. Having said that, it is worth noting that Law 1653 of 2012 at article 1 allows an arbitral tribunal to decide a case based on parties to equity principles or technical basis, provided that the parties have so agreed it and none of them be a public entity.

Answer contributed by Diana Correa

Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Colombia

Law 1563 of 2012 does not place any restriction on the party's choice of arbitrators.

However, there are some specific requirements for the agencies of the Executive Branch of the national order in both national and international commercial arbitration.

As established in the Presidential Directive No. 4 of 18 May  2018, in national arbitration proceedings, these agencies shall send a list of the candidates to be presented to the counterparty to the National Agency for the Legal Defence of the State. The Director of the Agency shall then present his or her recommendations on the candidates before the Legal Secretary of the Presidency of the Republic for his or her approval.  

The list must be specific for each case and must include at least 10 candidates with specific experience in the subject matter of the dispute. If the parties fail to reach an agreement on, at least, one of the candidates presented by the public entities, they will be entitled to use the lists of the corresponding Arbitration Centre. Unless otherwise agreed by the parties, this same proceeding will apply for the appointment of arbitrators in international arbitration, except that the list might be reduced to five candidates. 

In national arbitration cases, agencies from the Executive Branch of the national order shall not appoint or propose to appoint any person acting as arbitrator or secretary of the tribunal in more than five arbitral proceedings where one of the parties is a public entity. If the dispute is related to one of the infrastructure projects referred to in Law 1682 from 2013, these agencies shall not appoint or propose to appoint any person acting in more than three arbitral proceedings where one of the parties is a public entity subject to Law 1682.

In any case, agencies from the Executive Branch of the national order shall not appoint or propose to appoint any person acting as counterparty in another proceeding involving a public entity.   

Answer contributed by Diana Correa

20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Colombia

Pursuant to article 73 of Law 1563 of 2012, it is not necessary to have the nationality of the place of the seat to be appointed as an arbitrator. Likewise, the law does not establish any immigration or other requirements.

Answer contributed by Diana Correa

21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Colombia

As established in article 73 of Law 1563 of 2012, in such cases either party would be entitled to request the judicial authority to make the appointment according to the conditions agreed upon by them. In certain local institutions, such as the CCB and the CCM Chamber of Commerce, a random draw may be used in order to appoint the arbitrators. Also, as answered in questions 4 and 16 above, the draft Law provides a new provision, applicable only to international arbitrations, by which the appointing authority is the PCA.

Answer contributed by Diana Correa

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Colombia

Arbitrators are not afforded immunity under Law 1563 of 2012.

Answer contributed by Diana Correa

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Colombia

Law 1563 of 2012 does not provide for any procedure in this regard and so it would directly depend on the applicable rules. Under the rules for international arbitration of the CCB (article 3.39), for instance, the centre can request the parties to make a deposit as an advance for the fees and expenses of arbitrators, and hold the corresponding amount to ensure that arbitrators are remunerated for their services. The rules for international arbitration of the CCM (article 215) and the CCC (article 6.39) contain similar provisions.

Answer contributed by Diana Correa

Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Colombia

According to article 75 of Law 1563 of 2012, an arbitrator may only be challenged when the circumstances give rise to justifiable doubts regarding his or her impartiality or independence, or in the event where he or she does not have the qualifications required by the parties. The parties can freely determine the procedure to challenge the arbitrators, or agree to apply the arbitration rules they chose. If no agreement is reached or there are no applicable rules, the proceeding will be as follows.

The challenge must be filed as soon as the circumstances giving rise to it become known. The challenged arbitrator and the counterparty will have 10 days to present their comments. If the challenge is accepted, a new appointment will have place. If it is not, and there is only one arbitrator, the challenge will be decided by the institution or the judicial authority that made the appointment. Otherwise, it will be decided by majority of the remaining arbitrators. In case there is a tie, the decision will be adopted by the presiding arbitrator, and if the challenge was filed against him or her, then it will correspond to the institution or the judicial authority that made his or her appointment. 

However, when it comes to international arbitrations administrated by the CCB, which represent the majority, challenges are brought before the CCB Centre of Arbitration and are so decided by the CCB Centre, not by the Arbitrators (Rule 3.13 of the CCB).

Although Law 1563 of 2012 does not make reference to the IBA Guidelines on Conflicts of Interest in International Arbitration, the parties normally take them into account when challenging an arbitrator.   

Answer contributed by Diana Correa

Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Colombia

According to articles 71 and 90 of Law 1563 of 2012, either party may request the adoption of provisional measures before a judicial authority at any point during the arbitral proceeding or even before it starts. Such a request will not be deemed to be a waiver of the arbitration agreement. The provisional measures will be adopted according to Colombian procedural law and in consideration of the special features of international arbitration.

Furthermore, as established in article 80 of Law 1563, unless otherwise agreed by the parties, and at the request of either of them, the arbitral tribunal is entitled to adopt provisional measures by ordering the parties to: (i) maintain or re-establish the status quo; (ii) take action to avoid any harm to the arbitral proceeding or refrain from taking any action that would cause such a harm; (iii) preserve the assets that may be used to enforce the award; and (iv) preserve evidence that may be pertinent and relevant for the resolution of the dispute.

Pursuant to article 88 of Law 1563, the provisional measures ordered by the tribunal are binding and their enforcement may be requested before the judicial authority, unless the tribunal decides otherwise. The enforcement proceeding will be similar as the one undertaken with respect of the measures adopted by local courts.    

Colombian law does not regulate anti-suit injunctions in particular.

Answer contributed by Diana Correa

26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Colombia

Law 1563 of 2012 does not contain a specific provision allowing courts or tribunals to issue such an order.  

Answer contributed by Diana Correa

Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Colombia

As provided for in article 29 of the Colombian Constitution, the arbitral tribunal shall comply with due process throughout the proceeding. Likewise, pursuant to article 91 of Law 1563 of 2012, the tribunal will grant the parties an equitable treatment and the opportunity to defend their rights. 

As per article 92 of Law 1563, the parties will be free to agree on the proceeding, either directly or by reference to a particular set of rules. In lack of such an agreement, the tribunal may conduct the proceeding in the way it deems more appropriate.

Answer contributed by Diana Correa

28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Colombia

As established in article 98 of Law 1563 of 2012, if the respondent does not present its statement of defence in accordance with the law, the tribunal shall continue with the proceeding. Such an omission, however, will not be deemed equivalent to the acceptance of the plaintiff’s claims.  

Furthermore, if either party does not attend a hearing or does not present documentary evidence, the tribunal may continue with the proceeding and proceed to issue an award based on the evidence before it. 

Answer contributed by Diana Correa

29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Colombia

As mentioned above, the parties are free to agree on the proceeding, including the rules on the taking of evidence. If they fail to do so, the tribunal may conduct the proceeding in the way it deems more appropriate and will be entitled to decide on the admissibility, relevance and value of the evidence. In either case, the parties and the tribunal may apply the guidelines on the taking of evidence that they consider most appropriate to the circumstances, whether they are the IBA Rules or the Prague Rules.

Additionally, as per article 100 of Law 1563 of 2012, the tribunal may request, or authorise the parties to request, the cooperation of the judicial authorities of any country in the gathering of evidence. In such a case, the judicial authority will apply the rules corresponding to the specific type of evidence.

Answer contributed by Diana Correa

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Colombia

According to article 100 of Law 1563 of 2012, Colombian judicial authorities may cooperate as well in the collection of evidence and will proceed as if the request was a judicial commission.

Answer contributed by Diana Correa

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Colombia

Law 1563 of 2012 does not contain any specific provision regarding document production. However, when determining the rules to apply in this regard, the parties may be expected to take into account the IBA Rules on the Taking of Evidence in International Commercial Arbitration or the Prague Rules on the Efficient Conduct of Proceedings in International Arbitration.

Answer contributed by Diana Correa

32. Is it mandatory to have a final hearing on the merits?

Colombia

According to article 97 of Law 1563 of 2012, the parties are free to determine whether hearings, including a final one on the merits, shall be held or not. Nevertheless, domestic arbitration provides several hearings during the proceedings, including on the merits.

Answer contributed by Diana Correa

33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Colombia

As established in article 93 of Law 1563 of 2012, unless the parties agree otherwise, the tribunal is entitled to meet wherever it deems appropriate in order to gather evidence, to deliberate or to hold hearings. This will not be deemed to constitute a change of the seat of the arbitration. The use of electronic means is authorised by law and it is entirely up to the parties and the Tribunal to use it or not.

Answer contributed by Diana Correa

Award

34. Can the tribunal decide by majority?

Colombia

As per article 102 of Law 1563 of 2012, when the tribunal is composed by more than one arbitrator, and unless the parties agree otherwise, every decision will be taken by the majority of them. In lack of such a majority, the decision will correspond to the presiding arbitrator.   

Answer contributed by Diana Correa

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Colombia

Law 1563 of 2012 does not contain any particular restriction in this regard, and so it would be necessary to review the applicable law in each case. Nevertheless, it should be noticed that remedies are limited to the extent of the alleged claims, the relief sought and the material scope of the arbitration agreement. Otherwise, an award granting remedies beyond these limits may be subject to annulation according to article 41.9 of Law 1563 of 2012, for domestic arbitration and, article 108 of Law 1563 of 2012, for international arbitration. Finally, it could be also said that economic and moral remedies are commonly granted in an award, particularly the economic ones, but punitive damages are not at all common.

Answer contributed by Diana Correa

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Colombia

Under Colombian law arbitrators are entitled to issue dissenting opinions.

Answer contributed by Diana Correa

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Colombia

As per article 104 of Law 1563 of 2012, arbitral awards shall: (i) be in writing and signed; (ii) include the tribunal’s reasoning, unless the parties agree otherwise; and (iii) state the issuance date of the award and the seat of the arbitration.

Answer contributed by Diana Correa

38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Colombia

Pursuant to article 106 of Law 1563 of 2012, the parties will have a month as of the date of the service of the award to request its correction, interpretation, or addition. Likewise, according to article 109 of Law 1563, the parties will also have a month from the service of the award, or from the decision on the request of correction, interpretation or addition, to file a request to set aside the award.  

Answer contributed by Diana Correa

Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Colombia

Law 1563 of 2012 does not provide anything in respect of the allocation of the arbitration costs, and therefore it will depend on the applicable rules and the tribunal. Under the rules for international arbitration of the CCB (article 3.37), for instance, the losing party shall pay for the costs unless the tribunal decides to apportion them between the parties. The rules for international arbitration of the CCM (article 213) and the CCC (article 6.37) provide the same in relation to the arbitration costs.

Answer contributed by Diana Correa

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Colombia

Applicable interest is not regulated under Law 1563 of 2012 and it will depend on the law applicable to the dispute. In Colombia, for example, as established in article 884 of the Code of Commerce, the interest rate cannot exceed the equivalent to 1.5 times the current banking interest. If the parties do not agree on a specific rate, such will be the one applicable.

Answer contributed by Diana Correa

Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Colombia

Technically, an award cannot be appealed before Colombian courts, in terms of being subject to a revision on its merits. Nevertheless, according to article 108 of Law 1563 of 2012, local courts may set aside the award, either directly or upon a party's request, only for formal grounds.

Upon a party’s request, the award may be challenged in either of the following events: (i) the party was under some incapacity by the time of the arbitral agreement, or the agreement is invalid under its governing law; (b) the party was not properly informed of the appointment of an arbitrator or the beginning of the arbitral proceeding, or because it could not defend its rights; (iii) the award is related to a dispute that is not covered by the arbitral agreement, or includes decisions that go beyond it; (iv) either the composition of the arbitral tribunal or the arbitral proceedings are not in accordance with the parties' agreement or, in lack of such an agreement, with applicable legal provisions. Although any party can also rely on the following grounds, ex officio, the award may be challenged because (i) according to Colombian law, the dispute cannot be settle through arbitration, and (ii) the award is contrary to the Colombian international public order.

Answer contributed by Diana Correa

42. Are there any other bases on which an award may be challenged, and if so what?

Colombia

No. As per article 107 of Law 1563 of 2012, grounds to set aside an award are exhaustive.

Answer contributed by Diana Correa

43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Colombia

According to article 107 of Law 1563 of 2012, parties can agree to exclude or limit the right to request an annulment when they do not have their domicile or residence in Colombia. Such an agreement can be included in the arbitration agreement itself or in any subsequent and written agreement. If the recourse is waived, article 111 of Law 1563 requires a recognition proceeding of the award before it can be enforced.  

Answer contributed by Diana Correa

Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Colombia

As established in article 112 of Law 1563 of 2012, the enforcement of an award may be refused when, among others, the losing party demonstrates that a court from the seat of the arbitration has set aside the award.

Answer contributed by Diana Correa

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Colombia

The adoption of Law 1563 of 2012 itself marked a great shift in the process of recognition and enforcement of foreign arbitral awards in Colombia. By abrogating paragraph 2 of article 693 of the Civil Procedure Code, it excluded foreign arbitral awards from the application of the domestic exequatur procedure, allowing in practice the exclusive implementation of the New York Convention. Decisions from the Supreme Court of Justice have since progressively clarified the application of these norms making Colombia a more favourable state to international arbitration. 

In recent decisions, for instance, the Supreme Court of Justice has relied on a narrow notion of what it is to be understood as Colombian international public policy attaching its contents to the international standards while leaving out the domestic ones. The Court has explained that recognition of a foreign award will only be denied in the event it stands against the basic principles subjacent to the legal institutions. The Court mentioned, among others, the principle of good faith, the prohibition of abuse of rights, respect of due process and the impartiality of the arbitral tribunal. It thus explained that breach of a local mandatory rule would not necessarily mean a breach of Colombian international public policy. The Court recently ratified its position in a decision issued on 15 January 2019.

Answer contributed by Diana Correa

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Colombia

There are no legal or treaty provisions enabling a State or State Entity to raise a defence of sovereign immunity in Colombia.  

Answer contributed by Diana Correa

Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Colombia

Law 1563 of 2012 does not contain any provision in this regard but the Parties may agree to make the proceedings confidential.

Answer contributed by Diana Correa

48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Colombia

Colombian law does not provide anything in respect of the confidentiality of the evidence and the pleadings in the arbitration. Nor does it in respect of the possibility of relying in other proceedings to produce either of them. This will exclusively depend on the parties’ direct agreement or on the applicable rules.

Answer contributed by Diana Correa

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Colombia

There are no specific ethical codes or professional standards applicable to counsel and arbitrators conducting international arbitrations in Colombia. It should be born in mind, however, that the parties might agree to apply the IBA Guidelines on Conflicts of Interest and the IBA Guidelines on Party Representation to assist them in the conduction of the proceeding and regulate the conduct of counsel and arbitrators.

Nevertheless, arbitration practitioners may also take into account the Disciplinary Lawyer Code, as it sets forth the basic rules of proper conduct and litigation.

Answer contributed by Diana Correa

50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Colombia

There is one recent procedural expectation or assumption to be aware of in the field of international arbitration, which was taken from domestic arbitration. In fact, under domestic arbitration, when a public entity is involved in an arbitration, two major public institutions have to be notified of the existence of such proceedings and it is up to them whether to participate or not. The Attorney General’s Office is one of them and normally participates in defence of the public order, the public treasury and the fundamental rights. The National Agency for the Legal Defence of the State (ANDJE) is the other institution that is notified to keep a record of the arbitrations in which a public entity is involved. Both can submit memorials and be heard in hearings, but they are not considered as parties in the arbitration. Since Directive No. 020 dated 25 November 2019, the Attorney General has decided that from then on, the public entity in its capacity of claimant or respondent also has to notify the Attorney General’s Office of new commercial international arbitrations, and, if necessary, it will participate in such proceedings.

Answer contributed by Diana Correa

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Colombia

Law 1563 of 2012 does not regulate third-party funding but it does not limit the possibility of reaching out to it.

Answer contributed by Diana Correa

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