INTERNATIONAL ARBITRATION 1/3LY
MARKET COMMENTARY 09
COLOMB I A : A THR I V ING EN V I RONMEN T FOR A RB I T R AT I ON
With fourteen Free Trade Agreements signed to date and more under negotiation, a booming oil and mining sector and USD100 billion budgeted for infrastructure projects over the next few years; Colombia is emerging as one of the strongest economies in the developing world and one of the most attractive destinations for investors in Latin-America. The Colombian legal system has for some time lagged behind its rapid commercial growth. Delays, a lack of specialisation and inconsistent decisions have created a need for alternative dispute resolution methods. Increasingly, that need is being met by effective arbitration. THE STORY SO FAR Colombia has, in fact, a long tradition of arbitration: a legislative framework was introduced in the 1970s and Colombia became a signatory to the New York Convention in 1979. The country has a solid legal infrastructure in place including capable local lawyers, good international connections and excellent facilities for hosting arbitrations. There is a sound and stable process governing arbitration between private parties, as well as between private parties and state entities. There is also a reasonable degree of expertise and specialisation in handling arbitration proceedings. Decisions are published and collated by professional bodies. Most of the arbitration handled in Colombia is domestic and institutional, that is to say that most of the arbitration is local and administered by one of themany arbitration centres which exist across the country. Colombia hasmore than one hundred arbitral institutions, although themajority of arbitrations are heard in the Chambers of Commerce of Bogotá, Medellín and Cali. The Chamber of Commerce of Bogotá (CCB) is the leading arbitration body in Colombia. With a current caseload of three hundred cases involving parties fromboth the private and the public sectors and claimvalues reaching into the hundreds of millions of dollars, the CCB has become one of the key institutions in the region. Arbitration costs are generally set by reference to the sum in dispute. The partiesmay agree to an ad hoc arbitration, which operates on a different costs scale and can bemore cost-effective. However, ad hoc arbitration is not available in disputes involving state entities. Moreover, the procedural rules of ad hoc arbitration are the same as those that apply to institutional arbitration. For those reasons, the vast majority of arbitrations are carried out on an institutional basis.
BY NEIL BERESFORD AND RAQUEL RUBIO, PARTNER AND A SSOCIATE AT CLYDE & CO
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