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Claudia Benavides and Jesus Villegas


A.1       Legislation

Domestic and international arbitration in Colombia continues to be governed by Law 1563 of 2012 (“Law 1563“), which entered into force in 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 UNCITRAL Model Law with certain amendments.

Law 1682 of 2013 (“Law 1682”), which governs contracts for transport-related infrastructure projects, contains arbitration rules when state-owned companies or public entities are involved in disputes arising out of such projects. Although Law 1682 allows arbitration to be agreed upon, it forbids awards in which the arbitrator makes an award based on what they believe to be fair and equitable, rather than on the law (ex aequo et bono). The arbitration agreement must contain suitability requirements to be met by prospective arbitrators, but neither the contract nor any document related to the contract may predefine who the arbitrators will be in a potential arbitration nor include a list of potential arbitrators. State entities must establish in the arbitration agreement a cap on arbitrators’ fees, but contracts may contain a formula to re-adjust 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 or public entity.

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 (e.g. unilateral termination, interpretation, or amendment of the contract, caducidad[1]). This means that the arbitration tribunal may only decide upon the economic effects of such administrative acts.

Congress is currently considering an important arbitration reform bill submitted in 2019 (“Bill“)[2]. The Bill amends various provisions of Law 1563, including some provisions of section 3 dealing with international arbitration, such as the concept of “Appointing Authority”, the clarification of some circumstances when the arbitration will be deemed international, or the requirements for granting precautionary measures at the parties’ request when it is submitted before Colombian courts.

Under Law 1563, Colombian courts act as a “last resort” appointing authority. The Bill proposes to name The Hague Permanent Court of Arbitration as appointing authority of last resort. It will intervene in the arbitration proceeding to appoint the arbitrator(s) when parties fail to reach an agreement over the method of appointing arbitrators or do not appoint their arbitrators. It will also decide any challenge to an arbitrator in ad hoc arbitrations and declare the termination of an arbitrator’s role in cases of absence or legal impediment to act as such.

Regarding the so-called internationality criteria, that is, circumstances when as a matter of law the arbitration will be deemed international, the Bill amends three relevant provisions of section 3 of Law 1563. First, the Bill clarifies that the legal nature of arbitration (whether national or international) is defined by law and is not subject to the parties’ agreement, following recent rulings of the Civil Chamber of the Supreme Court of Justice[3]. Second, the Bill states that arbitration will be deemed international also when the contract (and not only the dispute) discussed in the arbitration affects international commerce’s interests and clarifies that a contract affects international commerce’s interests when it refers to a contractual relationship or an economic operation that implies cross border transfer of goods, services or funds. Third, under article 62 of Law 1563, an arbitration is international when the parties to the arbitration agreement are, at the time of the conclusion of that agreement, domiciled[4] in different States. However, there was some discussion on whether an arbitration involving domestic branches of foreign companies is international or not, because under Colombian law, branches are not separate legal entities from their parent company, but they do have their domicile. The Bill puts an end to this discussion by clarifying that the parent company’s domicile will be the domicile to be considered for this purpose so that arbitration involving the branch of foreign companies will be deemed international.[5]

Finally, since article 17(j) of the UNCITRAL Model Law does not provide any guidance to domestic courts on how to address requests for precautionary measures in support of international arbitration, the Bill adds some specific rules to be followed in these cases. We highlight that, unlike domestic rules applicable to precautionary measures, these rules require that the defendant be served of the request submitted by its counter-party before a decision is made.

A.2       Institutions, rules and infrastructure

Center of Arbitration and Conciliation of the Chamber of Commerce of Bogotá

The Center of Arbitration and Conciliation of the Chamber of Commerce of Bogota (“Center”), which is the most important arbitration center in Colombia, has a separate set 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.

The national health emergency declared by the national government of Colombia derived from the Covid-19 pandemic did not suspend arbitration proceedings on a general basis. The Center issued several circulars[6] to address key issues arising out of the situation generated by the pandemic.

Through these communications, the Center informed of measures taken to conduct most of the steps of the arbitration proceeding using digital tools. These measures include: (i) the possibility of filing arbitration complaints through digital channels made available by the Center, (ii) public draws for the appointment of arbitrators done remotely and completely virtual, (iii) meetings to appoint arbitrators by parties’ mutual consent through digital channels, (iv) availability of the record of the case in digital version for review by the arbitral tribunal and the parties at any time, (v) virtual hearings for most arbitration proceedings, although parties may request the tribunal to conduct the evidentiary hearings in person. These measures shall be valid unless otherwise informed by the Center to the public.

These measures follow the national Government of Colombia’s order, established under article 10 of Legislative Decree N° 491 of 28 March 2020, to conduct any ADR proceeding using the communication and information technologies available, to preserve both the continuity of the services and the health of the users of the services. Such provision also extended the maximum term for the issuance of the arbitral award in domestic arbitrations, from six to eight months from the date of the first procedural hearing.

In addition to these measures, Decree 806 of 4 June 2020 adopted measures to implement information and communication technologies into judicial and arbitral proceedings to ensure the delivery of justice services to the public.

Rules by the Superintendence of Corporations

In August 2015, a set of rules put forth by the Superintendence of Corporations (SoC) came into force. These rules contain a general set of rules and a specialized set of rules. The general rules provide for proceedings 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 less associated costs. These rules provide for shorter terms and more expedited proceedings and allow the tribunal and the parties to establish a procedural schedule for the gathering of evidence. The rules establish a schedule of fees per arbitrator according to the amount in dispute as well as the administrative costs of the Arbitration Centre of the SoC.

The Presidential Directive and other Directives

On 18 May 2018 the President issued Directive number four on the Subscription of Arbitration Agreements and the Selection of Arbitrators (“Presidential Directive“). It includes specific regulations for international arbitration against public entities.

According to the Presidential Directive, the director of the Colombian National Agency for the Judicial Defense of the State (ANDJE) shall approve the subscription of international arbitration agreements applicable to state contracts. The Presidential Directive also indicates that arbitration agreements in state contracts cannot establish that ICSID Rules will govern the arbitration.

Concerning the selection of arbitrators, the Presidential Directive provides that at least 10 business days before the date established by the parties for the constitution of the tribunal, the head of the legal office or legal director of the public entity shall send to ANDJE a list of at least 10 eligible candidates for domestic arbitration or five eligible candidates for international arbitration, with specific experience in the topics that will be discussed within the proceedings.

The list must include each candidate’s CV and a summary of the dispute. The public entity is not permitted to send identical lists if it has multiple arbitral proceedings, since these lists must be constituted on a case-by-case basis. The director of ANDJE shall evaluate the appropriateness and convenience of the proposed candidates and shall present its recommendations to the Legal Secretary of the Presidency of Colombia within the following three business days.

The secretary shall approve or dismiss the candidates evaluated by ANDJE, subject to prior consultation with the Secretary-General of the Presidency of the Republic of Colombia. This period of consultation may be exceptionally reduced if the public entity does not have timely knowledge of the call for the selection of arbitrators and the claimant does not agree to extend the period to select the arbitral tribunal. If the parties cannot reach an agreement on at least one of the candidates proposed by ANDJE, the public entity can participate in a draw to appoint the arbitrators from the pre-existing lists of the designated arbitration center. However, under no circumstance may a national entity or agency of the executive branch propose or select as an arbitrator a lawyer who acts as a counterparty in another proceeding involving a national public entity.

The above procedure for the appointment of arbitrators does not apply to investment arbitration proceedings.

Concerning arbitration proceedings against public entities, the Presidential Directive also establishes that ANDJE shall be informed of procedural developments related to international arbitral proceedings.

In addition to the Presidential Directive, Colombia’s capital city Bogotá also issued a very similar Directive applicable only to public entities based in Bogotá, which includes some guidelines for public officials when entering into an international arbitration agreement with a private party in state contracts.[7]

The Procuraduría General de la Nación recently issued Directive No. 20 of 25 November 2019, applicable to all Colombian public entities or private parties who exercise public functions. Under this directive, public entities that have initiated or have been served with a notice of international arbitration by a counterparty shall inform the Procuraduría General de la Nación within five business days following the receipt of the notice of arbitration. The directive also provides that the state entity shall request the arbitral tribunal to include in the list of recipients for notifications and communications related to the case, the public officials of the Procuraduría General de la Nación that had been designated for each case.

Dispute Resolution clauses in concession contracts

The Colombian National Agency of Infrastructure 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 “amigable componedor”  panel, which shares some of the characteristics of the dispute boards but are not the same. The amigable componedor settles the dispute through a binding decision that has the legal effects of a settlement agreement (contrato de transacción) under Colombian law and thus the decisions have the legal effects of res judicata. The decision delivered by the amigable componedor 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 the ICC. The arbitral tribunal will be seated in Bogotá and the merits of the case will be decided under Colombian law.


B.1       Council of State’s ruling on annulment of international awards

On 27 February 2020 the Third Section of the Colombian Council of State decided a motion to annul an international arbitration award rendered on 4 December 2017 (“Award“) by an international arbitration tribunal seated in Colombia[8], under the international arbitration rules of the Chamber of Commerce of Bogotá[9].

On 11 January 2018 the state-owned company filed before the Third Section of the Council of State a motion to set aside the Award under article 108 of Law 1563, arguing, among other things, that the arbitral procedure did not follow the agreement of the parties and that the Award conflicted with Colombia’s international public order.

The Council of State decided to annul the Award on the grounds of article 108(1)(d) of Law 1563 of 2012 which reproduces article 34(2)(a)(iv) of the UNCITRAL Model Law on International Commercial Arbitration and article V(1)(d) of the New York Convention. This ground states that an arbitral award may be set aside if the party making the application furnishes proof that the arbitral procedure did not follow the agreement of the parties.

The Council of State considered that the parties’ agreement on the procedural rules applicable to the arbitration, and specifically those regarding the submission of rebuttal expert reports did not condition nor limit such opportunity just for cases where new arguments were raised by the other party in the expert opinion submitted with its rejoinder. Therefore, the Council of State considered that the arbitral tribunal should have granted the respondent’s request and that by not doing so it deviated from the rules agreed by the parties.

The Council of State acknowledged that in a recent ruling[10] the Civil Chamber of the Supreme Court of Justice had adopted a much more narrowed approach to the annulment of international awards on the grounds of article 108(1)(d) of Law 1563 of 2012. The Supreme Court stated that only unjustified violations that impact either the entire proceeding or the parties’ right to due process are legitimate grounds for annulment.

Nonetheless, the Council of State departed from such an approach. The Council of State argued that Law 1563 of 2012 does not require the annulment judge to review whether a purported violation of the parties’ agreement on the procedural rules was material or irrelevant to the outcome of the case. The undesired consequence of the reasoning of the Council of State is that any kind of potential procedural deviation, no matter how irrelevant it is, may constitute a legitimate ground for annulment under article 108(1)(d).

Pursuant to rule 3.21 of the International Arbitration Rules of the Chamber of Commerce of Bogotá, applicable to the case, the tribunal had the authority to interpret and apply the procedural rules agreed as it deemed appropriate to decide upon specific issues of the proceeding not expressly regulated on those rules. However, the Council of State did not recognize any deference to such authority and competence of the arbitral tribunal, and instead, it entered into an analysis of the reasonableness of the tribunal’s interpretation of the parties’ agreement over the procedural rules of the case, precisely to overrule such interpretation, acting like a typical judge of instance, which is not its role.

As some scholars have pointed out[11], various measures adopted by arbitration tribunals to navigate the COVID-19 pandemic arise out of the tribunal’s authority and discretion to conduct the arbitration proceeding, which should not be subject to further judicial scrutiny. However, this decision contradicts such an approach and creates uncertainty over the limits of judicial intervention in international arbitration.

B.2       Recognition of international awards

On a decision dated 17 April 2020 the Third Section of the Council of State of Colombia decided a motion for recognition of an international award issued on 10 June 2016, and its addendum dated 28 October 2016 (“Award“). Through the Award an international arbitration tribunal seated in Houston, Texas and governed by the ICC Rules of International Arbitration[12], settled a dispute between the state-owned company Bioenergy Zona Franca S.A.S. (the claimant) and the Spanish company Isolux Ingeniería S.A. (respondent and counter-claimant), related to the turnkey agreement to construct a fuel alcohol production facility in Colombia’s countryside[13]. The Award ruled in favor of both parties and ordered Bioenergy to pay approximately USD 1.5 million.

Isolux Ingeniería S.A. filed for recognition of the Award before the Council of State and Bioenergy opposed to the recognition arguing that (i) it was under some incapacity according to the law applicable to it, and (ii) that the arbitration agreement was not valid under the applicable law, pursuant to article 112(a)(i) of Law 1563 of 2012 and the New York Convention. However, Bioenergy did not give further explanations about why it was under some incapacity or why the agreement was not valid. Bioenergy simply stated that Isolux had been engaged disregarding the public procurement regime to which Bioenergy was subject under Colombian law and that such failure entailed the invalidity of the construction contract.

The Council of State explained that the second paragraph of article 79 of Law 1563 of 2012 states that the arbitration agreement is independent of other clauses of the contract and that the existence, validity, or effectiveness of the contract containing the arbitration agreement shall not affect or have any kind of impact on the validity of the arbitration agreement, nor on the jurisdiction of the arbitral tribunal constituted under such agreement to rule the case. The Council of State also held that under article 62 of Law 1563 of 2012 state-owned entities that are parties to an arbitration agreement shall not invoke their national legal regime to dispute their capacity to be a party to the arbitration or the arbitrability of the subject matter of the dispute.

The Court also examined ex officio the following grounds to verify whether the Award could be denied recognition based on one of them: (i) arbitrability of the dispute according to Colombian law, and (ii) whether recognition could entail a violation of Colombian public international policy. Neither of them succeeded. It is worth noting that regarding the second ground, the Court made a slight differentiation between “procedural” and “substantive” international public policy. The Council of State ruled there was no evidence of a violation of procedural rights of the respondent during the proceedings, such as the right to a reasonable opportunity to present its case, to be served of decisions and to be treated according to the arm’s length principle. The Council of State also said that the Award did not impact other values or interests than those of the parties to the dispute.


[1] Caducidad under Colombian law means unilateral termination by the public entity due to gross breach of contract.

[2] Bill No. 006/Senate of July 20, 2019.

[3] Supreme Court of Justice, Decision of January 15, 2019. File No. 11001-02-03-000-2016-03020-00. Judge Aroldo Wilson Quiroz.

[4] UNCITRAL Model Law uses the term “places of business”.

[5] This clarification was introduced by the First Commission of the Senate in the first debate to approve the Bill, held on September 24, 2019.

[6] Circular No. 001 dated March 16, 2020; Circular No. 002 dated March 20, 2020; and Circular No. 005 dated September 2, 2020.

[7] Directive of the Legal Secretariat of the municipality of Bogotá No. 22 of October 31, 2018.

[8] The award decided a dispute between Consorcio China United Engineering Corporation and Donfang Turbine Co. Ltda. “Consorcio CUC-DTC” (claimant) and the state-owned companies Generadora y Comercializadora de Energía del Caribe-GECELCA S.A. E.S.P. and GECELCA 3 S.A.S. E.S.P (original respondents in the arbitration and party seeking to annul the award).

[9] Council of State. Third Division. Judgment of February 27, 2020. Judge Maria Adriana Marín. Court docket No. 60714.

[10] Supreme Court of Justice. Civil Chamber. Judgment of July 11, 2018. File 2017-03480. Decision No. SC5677-2018. Judge Margarita Cabello Blanco.

[11] Madero-Rincón, A., Sossa, M. “Colombia’s Council of State Defines the Contours of Arbitral Tribunal’s Procedural Discretion in a recent annulment decision”. Kluwer Arbitration Blog. July 27, 2020.

[12] ICC Case 202018/ASM. Arbitrators: Jose Emilio Nunes Pinto, Bernardo Cremades and Emilio González de Castilla del Valle.

[13] Council of State. Third Division. Judgment 2019/00015/63266 of April 17, 2020. Judge Maria Adriana Marín. Court docket No. 63266.


Claudia Benavides is a partner in Baker McKenzie's Bogotá office. She has been the global chair of the Dispute Resolution Practice Group since 2019. Claudia is a highly regarded expert in transnational litigation and international arbitration. She has over 25 years of extensive experience handling complex litigations and arbitrations related to construction and infrastructure projects, post-acquisition disputes, disputes in the energy sector, distribution and supply agreements, insolvency, and general breach of contract. Claudia often advises investors on treaty planning and leveraging international protections in the context of government interference. She has been recognized by many of the most renowned international rankings and publications.


Jesús Villegas is an associate at the Dispute Resolution practice group of Baker McKenzie's Bogota office.