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National arbitration laws
What legislation applies to arbitration in your jurisdiction?
Law 1563/2012 governs domestic and international arbitration in Colombia. The law is dualist and therefore enshrines different regimes for domestic and international arbitration. The international section draws largely on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, including its 2006 amendments.
Are there any mandatory laws?
Law 1563/2012 contains mandatory provisions for disputing parties. The international section is somewhat deferential to the parties’ agreement, whereas the domestic section contains more limitations. For example, parties to an arbitration cannot submit to a foreign court to decide a challenge to the award if the seat of arbitration is Colombia.
New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?
Yes – Colombia signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on September 25 1979. The convention entered into force on December 24 1979, under its own terms. However, the convention was incorporated into Colombian legislation through Law 39/1990 after the original law was declared unconstitutional on procedural grounds.
Are there any reservations to the general obligations of the convention?
Colombia made no reservations to the New York Convention.
Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?
Colombia is also a party to:
- the Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (the Montevideo Convention), approved by Law 16/1981;
- the Treaty on International Procedural Law of Montevideo 1889;
- the Inter-American Convention on International Commercial Arbitration 1975 (the Panama Convention), approved by Law 44/1986; and
- the Convention on the Settlement of Investment Disputes between States and Nationals of other States (the Washington Convention), approved by Law 267/1996.
Has your jurisdiction adopted the UNCITRAL Model Law?
Yes – the international arbitration section of Law 1563/2012 follows the UNCITRAL Model Law, with certain modifications.
Are there any impending plans to reform the arbitration laws in your jurisdiction?
What are the validity requirements for an arbitration agreement?
Under Articles 4 and 69 of Law 1563/2012, which governs domestic and international arbitration in Colombia, an arbitration agreement is valid if:
- it was agreed in writing;
- it expressly and unequivocally reflects the parties’ intention to submit the dispute to arbitration; and
- the dispute submitted to arbitration is waivable.
If the arbitration agreement is contained in a separate document, it must state the names of the parties and precisely indicate the contract to which it relates.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
Article 116 of the Constitution recognises arbitration as a method of dispute resolution. The courts usually enforce arbitration agreements, unless the dispute’s subject matter is non-arbitrable.
Further, Law 1563/2012 requires the courts to refer disputing parties to arbitration where the agreement to arbitrate is international, regardless of whether Colombia is the seat of arbitration. In the case of domestic arbitration, Article 100 of the General Code of Procedure allows the respondent to file, as a preliminary defence, a request for the court to refer the parties to arbitration under a domestic arbitration agreement.
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
Consolidation will be governed by the parties' arbitration agreement or the applicable arbitration rules. Law 1563/2012 is silent on this matter. It is likely that a tribunal will consolidate the proceedings if:
- they involve the same parties;
- the subject matter is related; and
- the arbitration agreements are compatible.
Where different parties are involved, the consent of each may be required, absent express authority in the arbitration agreement or the applicable rules to consolidate the proceedings.
Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
For international arbitral proceedings, the arbitral tribunal must decide the dispute based on the substantive law agreed by the parties (Article 101 of Law 1563/2012). If the parties failed to agree on the applicable law, the tribunal may apply the law that it considers appropriate. Domestic arbitrations will, as a general rule, be decided under Colombian law.
Are there any provisions on the separability of arbitration agreements?
Under Articles 5 and 79 of Law 1563/2012, an arbitration agreement is independent of the contract in which it is included. A decision declaring the contract invalid, non-existent or unenforceable does not invalidate the arbitration agreement.
Are multiparty agreements recognised?
Yes. Absent the agreement of the parties or a different provision in the applicable arbitration rules, multiple plaintiffs or defendants must act as a single plaintiff or defendant in the appointment of arbitrators (Article 74 of Law 1563/2012).
Criteria for arbitrators
Are there any restrictions?
There are no restrictions or special criteria that arbitrators in international arbitral proceedings must meet (Article 73 of Law 1563/2012, the legislation governing domestic and international arbitration in Colombia).
For domestic arbitrations, arbitrators must be Colombian citizens with no criminal record (except for political or negligent crimes) and cannot have been disqualified or removed from public office.
In addition, if arbitrators must decide pursuant to Colombian law, they must be lawyers admitted to practise in Colombia and have more than eight years’ professional experience, without prejudice to the additional requirements under the applicable arbitration rules or those imposed by the parties to the arbitration agreement.
What can be stipulated about the tribunal in the agreement?
The parties can determine the composition of an international arbitral tribunal (Articles 73 and 76 of Law 1563/2012).
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?
In domestic arbitration, parties cannot agree to have an odd number of arbitrators. If the parties cannot agree on the number of arbitrators – either directly or with reference to a set of arbitration rules – the number of arbitrators will be three, unless the amount in dispute is less than 150 minimum monthly wages, which is approximately $36,800 (Article 7 of Law 1563/2012). If the parties cannot agree on the arbitrators or the method for appointing them, either party may request a civil circuit court to appoint the arbitrators. If a state or state-owned entity is involved, the administrative court is competent to appoint arbitrators.
The appointment of international arbitrators follows Article 11 of the United Nations Commission on International Trade Law Model Law. Absent an agreement on a nominating authority, either disputing party may request the civil circuit court to appoint arbitrators.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?
Yes – arbitrators may be challenged and disqualified.
In domestic arbitration, arbitrators may be challenged on the same grounds as judges. The General Code of Procedure establishes the grounds for recusal, including:
- reasonable concern regarding independence or impartiality based on:
- a personal relationship between the arbitrator or judge and one of the parties; or
- personal knowledge of the dispute by the arbitrator or judge; and
- a breach of disclosure obligations.
Notably, if only one of three arbitrators is challenged, the remaining two will decide the challenge. In the case of a sole arbitrator, or when two or more arbitrators are challenged, the question will be settled by a civil circuit court.
In international arbitration, parties may challenge an arbitrator where there are "circumstances that give rise to justified doubts as to the impartiality or independence of an arbitrator, or if the arbitrator does not meet the requirements agreed to by the parties" (Article 75 of Law 1563/2012). The parties may agree the procedure to decide a challenge. Absent such agreement, the default procedure is as follows:
- A challenge should be made promptly after the challenging party becomes aware of the grounds to challenge the arbitrator.
- The challenged arbitrator and the other parties to the arbitration will have 10 days to file a reply.
- If the challenged arbitrator resigns or the other parties to the arbitration agree on the challenge, a substitute will be appointed in the same manner as was used to appoint the disqualified arbitrator.
- If the other parties do not agree with the challenge and the sole arbitrator does not resign, the challenge will be decided by the arbitration centre that appointed the arbitrator or, absent such an appointment, a civil circuit court.
- Where there is more than one arbitrator, the remaining arbitrators will decide on the challenge. If there is a tie, the arbitration chair will decide. If the chair is challenged, the arbitration centre that appointed the chair will decide and, absent such an appointment, a civil circuit court will do so.
- If more than one arbitrator is challenged on the same grounds, the arbitration centre that participated in their appointment or whose rules govern the arbitration, will decide the challenge. Absent such a centre, the civil circuit court will decide the challenge.
How should an objection to jurisdiction be raised?
There is no special procedure for raising an objection to jurisdiction. An objection to jurisdiction must be raised before the tribunal to preserve the right to challenge the award on jurisdictional grounds.
In domestic arbitration, the challenge must be made both in the respondent's response and as a reconsideration petition against the tribunal's decision assuming jurisdiction.
In international arbitration, the parties are free to agree on the procedure to file and decide a challenge to jurisdiction. The arbitration may be bifurcated so that the tribunal decides on its own jurisdiction first. If there is no agreement of the parties and the applicable arbitration rules are silent, it is advisable to raise the challenge in the response.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
As a general rule, arbitrators are replaced in the same way in which they were appointed – for instance, when they:
- are disqualified; or
- can no longer perform their functions due to disability or death.
In addition, an arbitrator who resigns or recuses him or herself will immediately cease to perform his or her functions and must notify the party or nominating authority that appointed him or her (Article 17 of Law 1563/2012 for domestic arbitration and Articles 76 to 78 for international arbitration).
Powers and obligations
What powers and obligations do arbitrators have?
Domestic arbitrators have the same powers, obligations and duties as judges. As regards international arbitration, there are no obligations or duties apart from conducting the arbitration in accordance with the agreement of the parties and, absent such an agreement, the default provisions of the law. Arbitrators must:
- maintain their impartiality and independence from the parties; and
- treat parties equally and afford them the opportunity to present their case under the equality of arms principle.
Liability of arbitrators
Are arbitrators immune from liability?
In domestic arbitration, arbitrators are subject to the same rights, duties and responsibilities as judges. Therefore, arbitrators are immune from liability except for gross negligence or wilful misconduct. Law 1563/2012 is silent regarding the liability of arbitrators in international arbitration. Consequently, this matter will be governed by the arbitration agreement or the applicable arbitration rules. If the arbitration agreement is governed by Colombian law, arbitrators will be liable for gross negligence and wilful misconduct.
Communicating with the tribunal
How do the parties communicate with the tribunal?
The parties may communicate with the tribunal through hard-copy and electronic communications. As a general rule, there should be no ex parte communications with the tribunal.
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?
Under Article 38 of Law 1563/2012, a domestic tribunal decides by majority. A dissenting arbitrator must issue a separate opinion providing the rationale for his or her dissent.
Under Article 102 of Law 1563/2012, an international arbitral tribunal must also decide by majority. Absent a majority, the chair must decide.
Are there any disputes incapable of being referred to arbitration?
Yes – only disputes concerning rights that the parties are free to waive may be referred to arbitration. Non-waivable rights include:
- fundamental and collective constitutional rights;
- certain labour rights;
- antitrust laws and certain IP rights;
- civil status and, in general, family law rights; and
- the legality of administrative acts issued in exercise of so-called ‘exceptional’ sovereign powers, among others.
Can the arbitrability of a dispute be challenged?
Yes – the arbitral panel must decide on any challenge to the arbitrability of the dispute. Further, parties may challenge an award on the grounds that the subject matter of the dispute was non-arbitrable, except where the parties waived the right to challenge the award. The right to challenge the award may be waived in international arbitration only where none of the parties are domiciled or resident in Colombia (Articles 40 and 41 of Law 1563/2012 for domestic arbitration and Articles 107 and 108 for international arbitration).
Jurisdiction and competence-competence
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 tribunal’s jurisdiction and competence?
Yes – the principle of competence-competence is recognised in Colombia. Under Article 79 of Law 1563/2012, Colombia’s international arbitration regime provides that only the arbitral tribunal can decide on the matter of its own jurisdiction. The parties must object to the jurisdiction at the time of filing the response to the claim, at the latest. The arbitral tribunal may decide on the objections to its jurisdiction before or in the final award. In addition, either party may challenge the tribunal’s jurisdiction in its motion to vacate the award.
Starting an arbitration proceeding
What is needed to commence arbitration?
Domestic arbitral proceedings initiate with a complaint that must satisfy all of the requirements set out in the relevant rules regarding civil judicial complaints. In general, such requirements include:
- identification of the parties to the process;
- a clear description of the facts of the dispute;
- an expression of the claims;
- identification of the rules applicable to the dispute;
- an estimate of the claims’ monetary value; and
- an indication of the evidence to be produced and the submission of any documents that are intended to be used as evidence and are in the party’s power.
The complaint must be signed by the claimant’s attorney and filed along with all of the documentary evidence available and a copy for the defendant, tribunal and arbitration institution, if applicable.
The commencement of an international arbitration will vary according to the rules chosen. Absent applicable rules or an agreement of the parties, Article 94 of Law 1563/2012 – the legislation governing domestic and international arbitration in Colombia – states that the arbitration commences with a request for arbitration.
Are there any limitation periods for the commencement of arbitration?
No. However, each claim will have a statute of limitations under the applicable law. As a general rule, statutes of limitations under Colombian law are between two and 10 years.
Are there any procedural rules that arbitrators must follow?
In domestic arbitration, awards must be written and reasoned on the evidence and applicable law.
Awards rendered by an international tribunal must:
- be written and signed by the arbitrators;
- state the tribunal’s reasoning, unless otherwise agreed by the parties; and
- state the date and seat of arbitration.
Are dissenting opinions permitted under the law of your jurisdiction?
Yes. In domestic arbitration, the dissenting arbitrator must issue a separate opinion providing the rationale for his or her dissent (Article 38 of Law 1563/2012). In international arbitration, dissents are permitted, but there is no requirement to provide reasons therefor (Articles 102 and 104 of Law 1563/2012). The parties may agree to require a reasoned dissent or the arbitration rules may contain such a requirement.
Can local courts intervene in proceedings?
As regards domestic arbitration, the courts may intervene in arbitral proceedings:
- to collect pre-arbitration evidence;
- to designate the arbitrators;
- to decide the challenge against the sole arbitrator or the majority of the arbitral tribunal;
- to assist the tribunal in the practice and enforcement of interim measures; and
- through a constitutional action aimed at protecting fundamental constitutional rights.
In international arbitration, the courts may intervene in arbitral proceedings:
- to decide on interim measures and enforce interim measures ordered by a tribunal;
- to appoint arbitrators;
- to decide a challenge to an arbitrator;
- to assist in the gathering of evidence;
- to decide a challenge to the award; and
- to recognise and enforce foreign arbitration awards.
Pursuant to Article 67 of Law 1563/2012, the courts may intervene in international arbitrations only where expressly allowed by said law.
Can the local courts assist in choosing arbitrators?
Yes – where the parties cannot agree on the appointment of arbitrators or the method to do so, the courts may assist by appointing arbitrators (Article 14 of Law 1563/2012 for domestic arbitration and Article 73 for international arbitration).
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
Where a respondent fails to participate in an arbitration after being properly served of the request for arbitration, the arbitral tribunal may continue the proceedings and issue its award (Article 98 of Law 1563/2012). However, the tribunal has no authority to issue a default award, so it must decide on the merits (Article 98 of Law 1563/2012). The courts may refer parties to arbitration, but cannot compel them to arbitrate under penalty of contempt of court. Domestic arbitral tribunals have the power to subpoena witnesses or documents from third parties (Article 31 of Law 1563/2012). International arbitral tribunals may seek the assistance of domestic courts to obtain evidence from third parties (Article 100 of Law 1563/2012).
In what instances can third parties be bound by an arbitration agreement or award?
Only where those third parties have consented to arbitration. No third party may be bound by an arbitration agreement or award without its consent. To be bound by an award, the third party must also have been granted the opportunity to present its case in the arbitration.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
Regarding domestic arbitration, failing prior agreement, the proceedings will be conducted in the manner specified by the arbitration rules of the concerned arbitral institution. In the absence of such an institution, the arbitration will take place at an arbitral institution in the defendant’s domicile or, if there are multiple defendants, the domicile of one them (Article 12 of Law 1563/2012).
In international arbitration, parties may agree to the seat and language of the arbitration without limitation (Article 95 of Law 1563/2012).
How is evidence obtained by the tribunal?
In domestic arbitration, the taking of evidence is generally governed by the General Code of Procedure (Article 31, Law 1563/2012).
In international arbitration, the parties – and, failing their agreement, the tribunal – are free to establish the rules for taking evidence. The parties or the tribunal may decide to apply the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration.
In international arbitration, the parties or the tribunal can request the assistance of local courts in the taking of evidence within their jurisdiction (Article 100 of Law 1563/2012).
What kinds of evidence are acceptable?
The taking of evidence in domestic arbitration is subject to the same rules as in judicial proceedings. Under Article 100 of Law 1563/2012 and Article 165 of the General Procedure Code, the following is considered admissible evidence in Colombia:
- declarations of contending parties;
- arbitral tribunal-appointed expert reports;
- party-appointed expert reports; and
- inspections of goods or other property.
In respect of international arbitration, Article 92 of Law 1563/2012 follows Article 19 of the United Nations Commission on International Trade Law Model Law, under which tribunals are free to establish the rules for the taking of evidence in the absence of an agreement of the parties.
Is confidentiality ensured?
Law 1563/2012 is silent in this respect. Further, there is no presumption of confidentiality. Parties to an international arbitration may agree to confidential proceedings, but even in such a scenario, the annulment application will be decided by a Colombian court and the decision will be public.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
Yes – the parties to an arbitration may disclose information or documents provided within the arbitration in subsequent proceedings, unless otherwise agreed in international arbitration.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
In Colombia, Law 1123/2007 governs the conduct of counsel in any proceeding, including arbitration. However, this law is applicable only to lawyers admitted to practise in Colombia. Arbitrators are bound by the duties of impartiality and independence.
Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?
Regarding domestic arbitration, Articles 25 and 26 of Law 1563/2012, which governs the domestic and international arbitration in Colombia, provide that the arbitrators will determine the costs and expenses that must be paid by the parties. Advances of costs and fees must be made by parties in equal proportions.
In the award, the tribunal must decide on the final allocation of costs and expenses and will order the losing party to pay them. This will include the expenses arising from the proceedings (eg, arbitration fees, expert opinion fees and the prevailing party’s attorneys’ fees).
As regards international arbitration, costs will be allocated as determined by the applicable arbitration rules and, absent that, as decided by the tribunal.
Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?
Law 1563/2012 is silent regarding security for costs.
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 of Law 1563/2012, 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.
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.
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 steps can be taken to enforce the award if there is a failure to comply?
Since arbitral awards in Colombia have the same value as all other judicial decisions, all of the mechanisms available for enforcing judicial rulings are available.
Can awards be enforced in local courts?
Article 68 of Law 1563/2012 recognises 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 March 26 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.
Rules and restrictions
Are there rules or restrictions on third-party funders?
Law 1563/2012, which governs domestic and international arbitration in Colombia, does not regulate or prohibit third-party funding for international or domestic arbitration.
Class-action or group arbitration
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?
Law 1563/2012, which governs domestic and international arbitration in Colombia, does not provide any regulation for class action or group arbitration. However, national jurisprudence has developed this topic. For instance, the Supreme Court, in a May 11 2001 decision (Exp 1100122030002001-0183-01), held that arbitral tribunals are competent to decide class actions in cases where the parties to the class action are also parties to the arbitration agreement.
Are there any hot topics or trends emerging in arbitration in your jurisdiction?
The rules for what qualifies as Colombia's ‘international public policy’ are under development. The Colombian courts may refuse recognition of foreign awards where they find that the award is contrary to such international public policy. A key concern for the international business community is whether a choice of law paired with an international arbitration clause, where the applicable law in the absence of such choice of law would be Colombian law, risks running afoul of Colombia's international public policy by avoiding the application of mandatory rules of Colombian law. In 2016 the Supreme Court rendered a decision regarding commercial agency, in which it allowed the choice of a foreign law to prevail over a mandatory provision of Colombian law. This is certainly a step in the right direction and paves the way for more decisions expanding on this interpretation. However, the case concerned a provision of the Code of Commerce, so it is unclear whether unfair competition, data privacy or other mandatory rules, as applied among disputing parties in an arbitration, may also be excluded through a choice-of-law clause. Parties to a contract should carefully review whether the choice-of-law clause risks excluding mandatory provisions and, if so, determine the public policy interests behind those mandatory rules which will make it more likely that the Supreme Court will enforce an award made under an incompatible law. In addition, specific carve-outs to the governing law may be warranted in certain cases.