Enter to open, tab to navigate, enter to select
New national and international arbitration statute of Colombia is in force
Practical Law UK Legal Update 0-522-1973 (Approx. 3 pages)
New national and international arbitration statute of Colombia is in force
by Eduardo Zuleta (Partner), Gómez-Pinzón Zuleta Abogados S.A.
| Published on 01 Nov 2012 • Colombia |
The National and International Arbitration Statute of Colombia (Law 1563/12) entered into force on 12 October 2012. The new statute, which is mainly based on the UNCITRAL Model Law, is intended to create a modern international arbitration legal regime for Colombia.
In the new National and International Arbitration Statute of Colombia (Law 1563/12), the section on international arbitration incorporates the UNCITRAL Model Law, including the amendments approved in 2006. However, variations were made to:
- Adapt the Model Law to the specific doctrine of the Constitutional Court regarding the internationality of arbitration.
- Include several successful non-Model Law provisions from other legislations.
Some of the key features of the new statute can be summarised as follows:
- The statute excludes Article 1(3)(b)(i) of the UNCITRAL Model Law, which states that an arbitration is "international" when the place of arbitration determined in or according to the arbitration agreement is located in a state different to that of the places of business of the parties.The reason underlying this approach is that this provision, as reproduced in the previous International Arbitration Statute (Law 316/96), was declared compatible with the Constitution on condition that it could only be applied where at least one the parties was foreign (Constitutional Court of Colombia, Decision C-347/97). Therefore, the Drafting Commission (designated by the Government to prepare the new Law) had two options. On the one hand, it could create a new internationality criterion establishing that arbitration is international when the seat is located in a jurisdiction other than that of the parties' places of business and at least one of the parties is not a Colombian national. Alternatively, it could exclude the provision in question as a whole.To avoid the introduction of an unusual internationality criterion, which would certainly be unfamiliar to foreign lawyers, the Drafting Commission preferred the second option.
- The statute incorporates the objective economic criterion of internationality, to the effect that an arbitration is international when international trade interests are at stake. It does so by using wording based on Article 1504 of the French New Code of Civil Procedure.
Where none of the parties to the arbitration agreement is domiciled or has residence in Colombia, the new statute allows them to exclude one or more grounds of annulment, or even annulment as a whole. Where annulment is excluded, however, the award can only be enforced in Colombia by exequatur proceedings. In this connection, it is worth noting that the Supreme Court of Justice recently issued two decisions applying the New York Convention as the only instrument listing the grounds on which recognition of foreign awards may be denied (to the exclusion of local rules on exequatur). The new statute seeks to maintain this approach by reproducing the text of Article V of the New York Convention and exhaustively regulating the exequatur of foreign awards.
To ensure that the new statute's provisions on annulment and exequatur are applied consistently, the Supreme Court of Justice is designated as the competent authority for both types of proceedings. However, where the award concerns a dispute involving a Colombian State entity, the Council of State would be the competent authority.
The new statute is the result of the efforts made by experts and public authorities for creating a modern international arbitration legal regime for Colombia. The statute is based not only on the Model Law, but also incorporates and adapts the best from other legislations. However, it is still too soon to claim Colombia as a promising Latin American arbitration venue. Only time will tell whether local courts will apply the new legal provisions correctly.