11th. Edition The Baker McKenzie International Arbitration Yearbook. Colombia

Similar documents
10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Colombia

11th. Edition The Baker McKenzie International Arbitration Yearbook. Chile

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Myanmar

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Kazakhstan

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Argentina

BACKGROUND INFORMATION ON THE INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES (ICSID)

Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce

Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce

BACKGROUND INFORMATION ON THE INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES (ICSID)

11th. Edition The Baker McKenzie International Arbitration Yearbook. Peru

ARBITRATION RULES LJUBLJANA ARBITRATION RULES. Dispute Resolution Since 1928

Unauthorized Amiable Compositeur?

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Peru

1. Ad hoc and institutional arbitration in Italy

ICC INTERNATIONAL CHAMBER OF COMMERCE ARBITRATION RULES

2018 DIS ARBITRATION RULES. First Edition

AN ACT STATEMENT OF MOTIVES

TITLE VII RULES OF PROCEDURE FOR INTERNATIONAL COMMERCIAL ARBITRATION MODEL CLAUSE

11th. Edition The Baker McKenzie International Arbitration Yearbook. Ukraine

Arbitration in Latin America: The Experience of the Inter-American Commercial Arbitration Commission

Austrian Arbitration Law

THE DUTIES OF ARBITRATORS. Babatunde Fagbohunlu

Arbitration Provisions in M&A Transaction Documents

ARBITRATION RULES. of the Finland Chamber of Commerce

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Vietnam

Arbitration in Portugal

Organisation for Economic Co-operation and Development 3 April 1996 Organisation de Coopération et de Développement Economiques

LITHUANIA April Arbitration Guide IBA Arbitration Committee

Your Arbitration Agreement Matters: Tips for Drafting Effective Arbitration Clauses in the U.S. Andrew Behrman February 2017

Role of the State on Protecting the System of Arbitration

10th Anniversary Edition The Baker McKenzie International Arbitration Yearbook. Ukraine

Ukrainian Chamber of Commerce and Industry. Legal Acts. THE LAW OF UKRAINE ON INTERNATIONAL COMMERCIAL ARBITRATION

The New French Arbitration Law: One Step Forward, Two Steps Back?

The creditors that hold movable guarantees over the debtor s assets rank in the second class of credits (see Creditor Ranking below).

RULES OF ARBITRATION 2016

UNCITRAL ARBITRATION RULES

JUDICIAL CODE. Provisions Relating to Arbitration

1985 UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL ARBITRATION (WITH AMENDMENTS AS ADOPTED IN 2006)

UNIFORM ACT ON ARBITRATION

Belgian Judicial Code. Part Six: Arbitration (as amended on December 25, 2016)

PERMANENT COURT OF ARBITRATION ARBITRATION RULES 2012

Article 7 - Definition and form of arbitration agreement. Article 8 - Arbitration agreement and substantive claim before court

ASEAN Law Association

Annex Tabular presentation of framework for discussion

ARBITRATION RULES OF THE MAURITIUS INTERNATIONAL ARBITRATION CENTRE

UNOFFICIAL TRANSLATION OF THE SPANISH ORIGINAL

11th. Edition The Baker McKenzie International Arbitration Yearbook. Saudi Arabia

INTERNATIONAL ARBITRATION ACT 2008

Selection and Appointment of Arbitrators

NEWS. Mixed messages: developments in recognition of foreign arbitral awards in Russia

( 1 RN01-01 Regulamento de Arbitragem_eng_vd_psk

ARBITRATION IN ARGENTINA. By Marcelo Cippitelli and Sergio Villamayor Alemán, CMS

THE COMMERCIAL ARBITRATION LAW OF THE KINGDOM OF CAMBODIA

Finnish Arbitration Act (23 October 1992/967)

International Commercial Arbitration and the Arbitrator's Contract

International Commercial Arbitration - An Introduction. Steven Lim Managing Partner, Singapore, Nabarro LLP 12 October 2016

INTERNATIONAL ARBITRATION ACT

Arbitration and Forum Shopping in the Seat

Introduction to Commercial Arbitration in China

The Code of Ethics for Arbitrators in Commercial Disputes Effective March 1, 2004

4. Drafting arbitration clauses

The Government of the United Mexican States and the Government of the Republic of Belarus, hereinafter referred to as "the Contracting Parties,"

The Emergency and its Arbitrator Efficient or Illusion? Kiev Arbitration Days 3 November 2017 James Castello

Arbitration Act of Slovenia Republic of Slovenia (Slovénie - République de Slovénie)

SCC PRACTICE NOTE. SCC Board Decisions on Challenges to Arbitrators STOCKHOLM, 2016 ANJA HAVEDAL IPP

ARBITRATION RULES OF THE PDRCI (Effective as of 1 January 2015)

RESOLVING COMPLEX INTERNATIONAL DISPUTES USE OF THE ENGLISH JURISDICTION FOR EFFECTIVE DISPUTE RESOLUTION. Andrew Manning Cox

the Home of International Arbitration

Proposed Palestinian Law on International Commercial Arbitration

RULES OF ARBITRATION OF AMCHAM PERU (In force from September 1, 2008)

JONES DAY COMMENTARY

Introducing ICSID. International Centre for Settlement of Investment Disputes. The global leader in international investment dispute settlement

Comparison between SCC arbitration and CIETAC arbitration

Arbitration and Conciliation Act

A BILL FOR AN ACT TO REPEAL AND RE-ENACT THE. ARBITRATION AND CONCILIATION ACT 1988 (Cap. 19 LFN)

Euro-Arab Conference on Investor-State Dispute Settlement, October 2012

Arbitration procedures and practice in Japan: overview

12 September 2011: Release of the New ICC Rules of Arbitration.

Netherlands Arbitration Institute

JAPAN (Updated January 2018)

ARBITRATION ACT. May 29, 2016>

Review of The Principles and Practice of International Commercial Arbitration by Margaret L. Moses

Rules of ICC as Appointing Authority in UNCITRAL or Other Ad Hoc Arbitration Proceedings. in force as from 1 January 2004

FINLAND (Updated January 2018)

Arbitration Article An alternative, cheaper and quicker way of dispute resolution

Rules of Arbitration in force as from 1 January 1998

DESIRING to intensify the economic cooperation for the mutual benefit of the Contracting Parties;

International sale of goods and arbitration in Europe

Best Practices in Arbitration for Hospitality Cases

GUIDE TO MEMBERSHIP IN THE ICSID CONVENTION

Korean Commercial Arbitration Board

THE ASSOCIATION OF ARBITRATORS (SOUTHERN AFRICA)

In the matter of an arbitration under the UNCITRAL Arbitration Rules. between

Archived Content. Contenu archivé

California's Adoption of a Code for International Commercial Arbitration and Conciliation

Este documento foi adotado pelo Conselho Administrativo da Corte Permanente de Arbitragem, no Palácio da Paz, em Haia, Holanda, no dia 6 de dezembro

RULES OF INTERNATIONAL COMMERCIAL ARBITRATION

Commercial Arbitration

LUXEMBOURG (Updated January 2018)

የ}hhK < ¾ÓMÓM Å w The Revised Arbitration Rules

Transcription:

11th Edition 2017-2018 The Baker McKenzie International Arbitration Yearbook Colombia

2018 Arbitration Yearbook Colombia Colombia Claudia Benavides 1 and María Lucía Casas 2 A. Legislation and rules A.1 Legislation Domestic and international arbitration in Colombia continues to be governed by Law 1563 of 2012, which entered into force on October 2012. Law 1563 provides for a different set of rules depending on whether arbitration is domestic or international. Section 3 of Law 1563, which governs international arbitration, is mostly based on the UNCITRAL Model Law, albeit it does have certain provisions that differ from the Model Law. Law 1682 of 2013 includes specific provisions that regulate arbitration when state-owned companies or public entities are involved in disputes related to infrastructure projects in the transportation sector. A.2 Institutions, rules and infrastructure A.2.1 Center of Arbitration and Conciliation of the Chamber of Commerce of Bogota The Center of Arbitration and Conciliation of the Chamber of Commerce of Bogota (the most important arbitration center in Colombia), produced new sets of rules for domestic and international arbitration that entered into force on 1 July 2014 and apply to all requests for arbitration filed after that date. After the entry into force of Law 1563, and by applying the internationality criteria set forth by that law, the number of 1 Claudia Benavides is a partner in Baker McKenzie s Bogotá office. She heads the Dispute Resolution Practice Group of the Bogotá office and represents a variety of clients in domestic and international arbitrations. 2 María Lucía Casas is a junior associate within the Dispute Resolution Practice Group of the Bogotá office. Baker McKenzie 1

international arbitrations seated in Colombia has been continuously increasing. A.2.2 Applicable rules to transport infrastructure projects Law 1682 regulates contracts for infrastructure projects in the transportation sector. It provides that disputes arising from such contracts may be submitted to arbitration. However, parties may only resort to arbitration when the case is going to be decided under the rule of law and not ex aequo et bono. The arbitral agreement must contain suitability requirements that must be met by the arbitrators, but the contract or any document related to the contract may not contain the specific nomination of arbitrators that will compose the tribunal. State entities must establish in the arbitration agreement a cap on arbitrators fees, but contracts may contain a formula to readjust such fees. Due to the public nature of state entities, the arbitrators fees and the costs of arbitration must be included in the budget of the state-owned company. Law 1682 also echoes previous jurisprudence by establishing that the arbitral tribunal does not have jurisdiction to decide upon the legality of an administrative act of a state-owned company or public entity when exercising exceptional powers (eg, unilateral termination, interpretation or modification of the contract). This means that the arbitration tribunal may only decide upon the economic effects of such administrative acts. The Colombian National Agency of Infrastructure (Agencia Nacional de Infraestructura) has several model concession contracts that contain dispute resolution clauses. Although the model dispute resolution clause is not identical in every model concession contract, there are certain common features to highlight. It contains provisions to constitute an amiable compositeur panel, which shares some of the characteristics of a dispute board but is not the same. The amiable compositeur resolves the dispute through a binding decision that has the legal effects of a settlement agreement (contrato de transacción) 2 Baker McKenzie

2018 Arbitration Yearbook Colombia under Colombian law and thus the decision is res judicata. The decision delivered by the amiable compositeur may be subject to arbitration if a party questions its validity. The model clause also contains provisions for domestic and international arbitration. According to the model clause, the internationality of the arbitration is defined by the parameters established by Law 1563. International arbitration cases could be administered either by the ICDR or ICC. The arbitral tribunal will be seated in Bogotá and the merits of the case will be decided under Colombian law. A.2.3 Rules by the Superintendence of Corporations In August 2015, a new set of rules put forth by the Superintendence of Corporations (SoC) came into force (the SoC Rules ). The SoC Rules contain a General set of rules and a Specialized set of rules. The General Rules provide for a proceeding similar to domestic arbitration established under Law 1563 and aim to resolve any type of dispute. The Specialized Rules aim to regulate arbitration for corporate matters, resolving disputes faster and with fewer associated costs. These rules provide for shorter terms and a more expedited proceeding, and allow the tribunal and the parties to establish a procedural schedule for the gathering of evidence. The SoC handles the administrative costs of the tribunal and the costs of the secretary. B. Cases B.1 Independence and impartiality of an arbitrator The Colombian Supreme Court of Justice recently ruled on the recognition and enforcement of an arbitral award issued in an ICC case seated in Santiago de Chile. 3 This ruling made a distinction between the standards to be applied under domestic and international 3 Supreme Court of Justice. Decision of 12 July 2017. File No. 11001-02-03-000- 2014-01927-00. Judge Aroldo Wilson Quiroz Monsalvo. Baker McKenzie 3

arbitration when the independence and impartiality of an arbitrator is challenged. Tampico filed for recognition and enforcement of the ICC award in Colombia before the SCJ. Alqueria opposed the recognition of the award arguing a public policy violation given that Tampico s counsel and Tampico s appointed arbitrator in the ICC arbitration were also acting in an ICSID arbitration, where Tampico s counsel was acting as arbitrator and the firm of Tampico s appointed arbitrator was acting as counsel. The SCJ pointed out that although the situation alleged by Alqueria may be unacceptable from an ethical point of view, it did not prevent the recognition of a foreign arbitral award because it did not imply a violation of Colombia s international public policy. Furthermore, the SCJ ruled that for domestic arbitration, Article 16 of Law 1563 establishes the specific grounds to challenge an arbitrator. However, Article 75 of Law 1563, which governs international arbitration, dictates different criteria to establish whether an arbitrator will be impeded from participating in an arbitral proceeding. Therefore, one cannot infer the application of the same standards. The SCJ concluded that the existence of different provisions regulating domestic and international arbitration under Law 1563 is clear evidence that, under international arbitration, the standard of impartiality must be read according to international norms and not depending on dispositions of domestic law. The SCJ, by relying on the IBA Guidelines on Conflicts of Interest in International Arbitration, concluded that the independence and impartiality of the arbitrator was not compromised in this case. B.2 Recognition and enforcement of foreign awards In a recent ruling, the SCJ granted recognition of an international award rendered by an arbitration tribunal seated in Peru, in respect of the resolution of a construction contract. 4 The ruling established that 4 Supreme Court of Justice. Decision of 7 September 2016. File No. 11001-02-03-000-2014-02737-00. Judge Luis Armando Tolosa Villabona. 4 Baker McKenzie

2018 Arbitration Yearbook Colombia regarding recognition of foreign awards, Section 3 of Law 1563 is applicable without prejudice to any multilateral or bilateral treaties in force in Colombia. According to Law 1563, recognition of a foreign award could be denied if such award is contrary to Colombian international public order. The SCJ has repeatedly held that Colombian international public order is a means of protection, defense and preservation of the fundamental principles of the Colombian legal system and the country s essential interests within its economical, political, social and ethical structure. However, the SCJ said, such protection should not become a means to destroy regional integration or cooperation among different nations on the basis of false nationalisms. Therefore, an analysis of the Colombian international public order must be addressed from the criterion of dynamic, tolerant and constructive public order demanded by the international community in the contemporary world. The SCJ concluded that recognition of a foreign award essentially comprises the formal control of the award aimed to ensure that the most fundamental values and principles of the internal order are not violated. B.3 Annulment of awards issued by international arbitration tribunals The SCJ recently decided an action to annul an award issued in an international arbitration procedure seated in Colombia. 5 The party that filed for annulment alleged several different grounds established in Article 108 of Law 1563. The SCJ made several important determinations. First, the SCJ expressly ruled that the annulment grounds applicable for domestic arbitration are not applicable to international arbitration tribunals seated in Colombia. 5 Supreme Court of Justice. Decision of 18 April 2017. File No. 11001-0203-000-2016-01312-00. Judge Luis Alonso Rico Puerta. Baker McKenzie 5

Second, according to the SCJ, when the award rules on issues that were not requested or claimed in the lawsuit, such situation could give rise to a ground for annulment under domestic arbitration provisions but not under international arbitration provisions. The SCJ said that, under international arbitration provisions, the award could be annulled if the award rules on a controversy not covered by the arbitration agreement or has decisions that exceed the terms of the arbitration agreement. The point of reference under international arbitration provisions is the arbitration agreement rather than the lawsuit. Thus, an award issued by an international arbitration tribunal seated in Colombia could not be annulled on the basis of inconsistencies between the claims contained in the lawsuit and the issues decided in the award. The SCJ once again clearly differentiated the grounds to annul an award issued by an international arbitration tribunal seated in Colombia, from the grounds to annul a domestic award. Third, the SCJ ruled that inconsistencies between the claims contained in the lawsuit and the issues decided in the award cannot be considered a violation of Colombian international public order and, therefore, are not a ground for annulment under international arbitration provisions. C. Funding in international arbitration C.1 Third-party arbitration funding Third-party funding is understood as a financing method in which an entity that is not a party to a particular dispute funds another party s legal fees or pays an order, award or judgment rendered against that party, or both. 6 Several issues have been raised in the use of third-party funding in domestic and international arbitration. For instance, one of the most relevant issues is whether a funded party is required to disclose the 6 Chapter 1: Introduction to Third-Party Funding, in Lisa Bench Nieuwveld and Victoria Shannon Sahani, Third-Party Funding in International Arbitration (Second Edition), (Kluwer Law International 2017). 6 Baker McKenzie

2018 Arbitration Yearbook Colombia existence of a third-party funding agreement to the opponent and the arbitral tribunal. Since it is highly unlikely that voluntary disclosure will be adopted, different institutions and guidelines are now beginning to regulate the obligation to disclose this information. C.2 Third-party financing in Colombia In Colombia there is no specific regulation on third-party funding. Law 1563, which governs arbitration in Colombia, does not regulate this matter. However, the absence of regulation has not been seen as an impediment to its practical use. For instance, Chilean scholars have considered that third-party funding is a viable mechanism in continental legal systems under the principle of freedom of contract (libertad de pactos) and provisions that already exist to govern the parties right to assign their litigious rights (cesión de derechos litigiosos). 7 In principle, the same analysis would be applicable in Colombia. In Colombia, the assignment of litigious rights implies the assignment of the uncertain outcome of a dispute that is already in court. The assignor cannot assure the assignee of how the controversy will be resolved. The assignment of litigious rights was established to allow a third party to replace the original party in a court case. Third-party funding is, in principle, different to the assignment of litigious rights, given that under third-party funding the third-party funder does not necessarily become a party to the case. Rather, thanks to the agreement with the third-party funder, the party obtains the financing conditions that enable such party to exercise its rights and better access to justice. 7 Elina Mereminskaya (Arbitrator of the Santiago Chamber of Commerce), Financiamiento de litigios a través de terceros y su aterrizaje en Chile, available at: www.camsantiago.cl/informativo-online/2017/01/docs/articulo_elina.pdf. Baker McKenzie 7

C.3 How can the Colombian legal system solve the gray area of disclosure in third-party funding? The Colombian legal system does not expressly require the disclosure of a third-party funder in arbitral procedures. However, there are certain constitutional and procedural principles 8 that may imply the duty of the parties to disclose in the context of domestic arbitration. For instance, the principles of good faith and procedural loyalty may imply that all parties acting within the realm of Colombia s legal system should disclose information that may have an impact on the arbitration or affect the equality of the parties. Nonetheless, we are not aware of judicial decisions that have provided such an interpretation. In respect to international arbitration, Law 1563 does not regulate a duty of the parties to disclose. In this context, it is likely the parties would apply the non-binding IBA Guidelines on Conflicts of Interest in International Arbitration. The IBA Guidelines solve this problem by establishing the duty to disclose any relationship between the arbitrators and the parties with the third-party funders. The awareness and use of the IBA Guidelines in the context of international arbitration has been steadily growing in Colombia and even local courts have acknowledged in their rulings the use of soft law by international arbitration tribunals. 8 Article 29 and 83 of the Colombian Constitution; Article 4, 12 and 78 of the General Procedural Code. 8 Baker McKenzie