Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions.
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
As regards domestic arbitration, the award must be made in writing and must contain:
- the tribunal’s legal and evidentiary reasoning;
- a dispositive part deciding on the dispute; and
- the arbitrators’ signatures.
In international arbitration, the form and content requirements for arbitration awards are similar to those contained in Article 31 of the United Nations Commission on International Trade Law Model Law. The award must:
- be written and signed by the arbitrators;
- provide the reasoning of the arbitral tribunal, unless otherwise agreed by the parties; and
- state the date and seat of arbitration.
Timeframe for delivery
Are there any time limits on delivery of the award?
For domestic arbitration, Article 10 of Law 1563/2012 – the legislation governing domestic and international arbitration in Colombia – states that the award must be rendered within six months from the first hearing, unless otherwise agreed by the parties. This time limit can be extended by agreement of the parties multiple times, but it cannot exceed six months.
There are no time limits for international tribunals to render an award.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
Arbitral tribunals may award any remedy provided in the applicable law. Specific performance, except for the signing of documents, is not enforceable by the Colombian courts.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
In respect to interim measures in domestic arbitration, Article 32 of Law 1563/2012 refers to the rules contained in the General Code of Procedure and the Code of Administrative proceedings. It establishes that at the request of any of the parties, the court may order any measure available in a proceeding before an ordinary court.
Further, it allows the tribunal to order any other interim measure that is deemed reasonable to:
- protect the right subject to controversy;
- prevent its violation;
- avoid damages;
- cease ongoing harm; or
- guarantee the claims’ effectiveness.
In any case, the arbitration tribunal can order a measure that is different and less burdensome than the one requested by the claimant, if it deems appropriate.
In addition, as a condition for the order of interim measures, the claimant must grant security of 20% of the estimated claims in order to guarantee the payment of the damages that may be caused by the performance of the measures.
Finally, Colombian judges cannot order interim measures without an ongoing judicial proceeding, except in the case of anticipated evidence in the area of competition or intellectual property. In that vein, no interim measures can be requested pending constitution of the tribunal.
Conversely, Article 71 of Law 1563/2012 provides that before or during international arbitral proceedings, the parties may request from a judicial authority the adoption of interim measures. Further, it provides that such a request will not constitute a waiver of the arbitration agreement.
No such provision exists for domestic arbitrations.
According to Article 80, in the case of international arbitrations, the arbitral tribunal can order an interim measure to:
- maintain or restore the status quo while the dispute is resolved;
- take action that would prevent or refrain from taking action that is likely to cause existing or imminent harm or prejudice to the arbitral process;
- provide a means of preserving assets out of which a subsequent award may be satisfied; or
- preserve evidence that may be relevant and material to the dispute’s resolution.
Can interest be awarded?
Interest will be governed by the applicable law. If Colombian law is applicable, interest may be awarded in accordance with the maximum interest rate established by the Superintendence of Finance.
At what rate?
Default interest in Colombia may be charged at a maximum of one-and-a-half times the existing banking interest (ie, the average interest charged by banks for unsecured credit), provided that it does not exceed the maximum interest rate set by the Superintendence of Finance.
Is the award final and binding?
Yes – according to Article 59 (domestic arbitration) and Articles 105.1 and 107 of Law 1563/2012 (international arbitration), the award is final and binding.
What if there are any mistakes?
Articles 39 and 106 of Law 1563/2012 provide the possibility to correct and clarify the award within the month following its issuance, under the following rules:
- Either party may, with notice to the other party, request the arbitral tribunal to:
- correct any miscalculation, transcription or typographical error; or
- clarify a point of the award.
If the arbitral tribunal receives the petition, it will make the correction or clarification within one month from receipt of the request in a decision which will form part of the award.
- The arbitral tribunal may, of its own motion, correct any errors regarding calculation, transcription, typography or grammar.
- Unless otherwise agreed by the parties, either party, giving notice to the other party, may request the arbitral tribunal to make an additional award of claims made in the course of the arbitral proceedings, but omitted in the award. If the tribunal accepts the request, it will issue the corresponding additional award within the 60-day term.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
Article 107 of Law 1563/2012 allows the parties to waive any challenge to the award or limit the grounds for annulment in the arbitration agreement or a subsequent express written agreement. This waiver is valid only in respect of international arbitration where all parties to the arbitration are domiciled and reside outside Colombia.
In all other cases, including in domestic arbitration, the challenge to the award cannot be waived.
On what grounds can parties appeal an award?
In Colombia, arbitration awards are not subject to appeal; however, they can be challenged through annulment recourse, revision, and, in some instances, a constitutional action for the protection of fundamental rights.
What is the procedure for challenging awards?
In domestic arbitration, according to Article 41 of Law 1563/2012, the annulment request will be duly substantiated within 30 days of its notification or the ruling on its clarification, correction or addition. The other party will have 15 days to file its reply. After that, within the next five days, the secretary of the tribunal will send the file and memorials to the competent judicial authority.
The award can be set aside if:
- the arbitration agreement is non-existent, null or unenforceable;
- the action is time barred or there is lack of competence or jurisdiction;
- the tribunal was not duly integrated;
- one of the parties was not duly represented in court or was not duly notified (this applies only if the defect was not amended during the proceedings);
- a piece of evidence duly requested was not ordered or when ordered was not collected, as long as the defect was mentioned in the corresponding legal remedy filed against the tribunal’s decision and was relevant to the ruling;
- the arbitration award or any addition, correction or clarification thereof was issued after the expiration of the period fixed for the arbitration process;
- the award was issued in equity when it should have been issued in law, on the condition that this circumstance appears evident in the award;
- the award contains contradictory statements or mathematical or other errors in the part of the judgment or with an influence thereon, provided that these errors were previously pointed out to the tribunal; or
- the award was rendered on issues that were not subject to the arbitrators’ decision, awarded in excess of that which was claimed or failed to decide on issues that were subject to the arbitration.
The first three grounds may be invoked only if the appellant alleged these defects at the moment of filing a motion to reconsider the award during the arbitral proceeding. The sixth ground cannot be alleged by the party that failed to present it to the tribunal before the established term expired.
As regards international arbitration, Article 108 of Law 1563/2012 provides that the judicial authority may annul the arbitral award, at the request of a party, where the appellant proves that:
- it was somehow incapacitated when the arbitration agreement was affected;
- the agreement is not valid under the law under which the parties have submitted it or, if nothing has been indicated in this regard, under Colombian law;
- it was not duly notified of the appointment of an arbitrator or the initiation of the arbitral proceedings or could not, for any other reason, assert its rights;
- the award concerns a dispute not provided for in the arbitration agreement or contains decisions that exceed the terms of the arbitration agreement. However, if the provisions of the award relating to the matters submitted to arbitration may be separated from those which are not, only the latter may be annulled; or
- the composition of the arbitral tribunal or procedure contravened the agreement between the parties, unless such agreement conflicted with a provision of this section which the parties could not depart from or, in the absence of such an agreement, which did not conform to the rules contained in this section of the law.
The judicial authority may annul the award ex officio when:
- according to Colombian law, the subject matter of the dispute is not subject to arbitration; or
- the award is contrary to Colombia’s international public policy.
What steps can be taken to enforce the award if there is a failure to comply?
Since arbitral awards in Colombia have the same status as all other judicial decisions, all of the mechanisms available for enforcing judicial rulings are available.
Can awards be enforced in local courts?
Articles 42 and 43 (domestic arbitration) and Article 111 (international arbitration) of Law 1563/2012 recognise that in domestic and international arbitrations seated in Colombia, awards can be enforced immediately, except in international arbitration where the parties have waived the annulment recourse. In the latter case, the award must be recognised, as it will be treated as a foreign award.
How enforceable is the award internationally?
Awards made under Colombian arbitration law may be enforced under:
- the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards;
- the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (the Montevideo Convention); and
- the Inter-American Convention on International Commercial Arbitration of 1975 (the Panama Convention).
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
In a 26 March 2009 judgment, the Council of State noted obiter dicta (ie, in passing) that a state's waiver of immunity from jurisdiction did not necessarily imply that it had waived immunity from enforcement. It further acknowledged that a state could waive its right regarding enforcement, whether expressly or implicitly. Notably, Colombia has no immunity from execution before its own courts. Thus, an award may be enforced against any Colombian state entity before the Colombian courts.
Are there any other bases on which an award may be challenged, and if so, by what?
Article 112 of Law 1563/2012 governs the recognition of foreign arbitral awards, stating that the Colombian courts may deny recognition:
- at the request of the party against which it is invoked, where such party proves before the competent judicial authority of the country in which recognition or enforcement is sought that:
- it was somehow incapacitated when the arbitration agreement was affected;
- the agreement is invalid under the law under which the parties have submitted it or, if nothing has been indicated in this respect, under the law of the country in which the award was rendered;
- the party against which the award is invoked was not duly notified of the appointment of an arbitrator or the initiation of the arbitral proceedings or could not, for any other reason, assert its rights;
- the award concerns a dispute not provided for in the arbitral agreement or contains decisions that exceed the terms of the arbitration agreement. However, if the provisions of the award that refer to the matters submitted to arbitration can be separated from those that are not, the former may be recognised and executed;
- the composition of the arbitral tribunal or procedure was not in accordance with the agreement between the parties or, in the absence of such an agreement, the law of the country in which the arbitration was conducted or processed; or
- the award is not yet binding on the parties or was annulled or suspended by a judicial authority of the host country of the arbitration; or
- where the competent judicial authority finds that:
- according to Colombian law, the subject matter of the dispute was not subject to arbitration; or
- the recognition or execution of the award would be contrary to the international public order of Colombia.
How enforceable are foreign arbitral awards in your jurisdiction?
Article 111 of Law 1563/2012 establishes that awards rendered in international arbitrations whose seat is Colombia will be considered national awards for enforcement purposes and, therefore, will not be subject to the recognition procedure and may be enforced directly as a domestic court judgment. Conversely, foreign awards (issued by an arbitral tribunal seated outside Colombia) must be recognised before enforcement.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
Article V of the New York Convention states that:
“Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.”
Article 112(a)(v) of Law 1563/2012 provides specific grounds for refusing recognition. It states that the Colombian courts may deny recognition of an arbitral award where the award is not yet binding on the parties or has been annulled or suspended by a judicial authority of the host country of the arbitration.
Because this article follows the New York Convention, which uses the word ‘may’, the Colombian courts can, in principle, grant recognition to an annulled award. However, it is unlikely that a court will grant enforcement to an annulled award. If they do, it will likely be only in exceptional circumstances, such as where corruption of the court that set aside the award is demonstrated.
Click here to view the full article.