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Colombia: A new ground for setting aside awards?
Practical Law UK Legal Update Case Report 5-524-4316 (Approx. 3 pages)
Colombia: A new ground for setting aside awards?
by Eduardo Zuleta (Partner), Gómez-Pinzón Zuleta Abogados S.A.
| Published on 28 Feb 2013 • Colombia |
In order to comply with a ruling of a supranational body, the Colombian Council of State rendered a decision in which it declared that an omission to seek a preliminary judicial interpretation from the Andean Community Tribunal of Justice regarding certain communitarian provisions, should be added to the grounds for setting aside arbitral awards.
After being defeated in arbitral proceedings in Bogotá, the Empresa de Telecomunicaciones de Bogota – E.T.B S.A., E.S.P. (ETB) filed an application before the Third Section of the Administrative Litigation Chamber of the Council of State (COE) to set aside the award. In addition, ETB requested the COE to seek a preliminary judicial interpretation from the Andean Community Tribunal of Justice (Andean Tribunal) regarding certain communitarian provisions (Interpretation Request).
In a decision rendered on 27 March 2008, the COE denied the Interpretation Request and declared that there were no grounds for setting aside the award.
ETB filed a Compliance Action (Acción de Cumplimiento) with the Andean Tribunal against the decision of the COE. ETB claimed that the Interpretation Request had been rejected, even though communitarian provisions governed the subject matter of the dispute. In a decision rendered on 26 August 2011, the Andean Tribunal found that the Communitarian Regulation was applicable to the merits of the dispute and that both the arbitral tribunal and the COE were under an obligation to grant the Interpretation Request.
Accordingly, the Andean Tribunal declared that the Republic of Colombia, through the COE, had breached the Communitarian regulation. The Andean Tribunal ordered the COE to:
- Invalidate the decision that refused annulment of the award.
- Adopt the necessary actions to comply with the decision of 26 August 2011.
In a decision rendered on 9 August 2012, the COE:
- Overturned its ruling rendered on 27 March 2008, in which it declared that there were no grounds to set aside the award.
- Declared that the award was annulled in order to comply with the Andean Tribunal's ruling.
In its decision, although the COE recognised that the grounds to set aside an award are exhaustively listed in the law, it also indicated that the refusal to grant the Interpretation Request, constituted a procedural error, which would entail the nullity of the award. Accordingly, the COE added:
"to [the] grounds ... for filing the extraordinary recourse to set aside arbitral awards, should be added the one consisting in the omission of the duty to seek the [Interpretation Request]".
Finally, the COE stressed that the limitations found in the domestic law should be overcome in order to comply with the Andean Communitarian system, which prevailed over the Colombian legal system, in matters dealt with directly by the Andean Supranational Bodies in charge of strengthening the Andean regional integration.