10 MARKET COMMENTARY
INTERNATIONAL ARBITRATION 1/3LY
ONE OF THE MOS T CONTROVERS I AL I SSUES IN COLOMBI AN ARBI TRAT IONS , PART I CUL ARLY IN THOSE INVOLV ING S TAT E ENT I T IES , I S THAT CHALLENGES TO AWARDS AND ARBI TRAT ION DECI S IONS ARE OF T EN MADE BY ME ANS OF A CONS T I TUT IONAL PET I T ION KNOWN A S ACCI ÓN DE TUT EL A .
The state contract regime does not exclude arbitration; on the contrary, it encourages arbitration and other methods of dispute resolution. The average time for a case to be resolved in the public courts is five to ten years. Arbitral disputes are usually resolvedwithin two years. Furthermore, the annulment of awards is treated the same under private and state contracts: the grounds for annulment of the award are limited and based on procedural due process considerations; and the rules have been applied accurately by the courts when hearing annulment requests. Recent statistics published by the CCB show that less than 7% of its arbitration awards are overturned by public courts on appeal. More recently, Colombia hasmodernised its Arbitration Law (Law1563 of 2012) to incorporate an international arbitration regime whichmirrors the UNCITRALModel Lawand enhances the already well established domestic arbitration practice. ROOM FOR IMPROVEMENT One of themost controversial issues in Colombian arbitrations, particularly in those involving state entities, is that challenges to awards and arbitration decisions are oftenmade bymeans of a constitutional petition known as acción de tutela . These proceedingsmay be entered by any of the parties involved in the arbitration. The basis for seeking tutela is that arbitration awards, having the same legal status of judicial decisions, may be subject to constitutional control if they reflect amanifest disregard of the law ( vía de hecho ) and there has been a breach of a fundamental right, such as due process. As a result, the legal certainty of arbitration awards can overall be compromised. Whether this shortcoming will affect the practice of international arbitration under the newModel Lawprovisions has yet to be seen.
THE FUTURE: THE RISE OF INTERNATIONAL ARBITRATION IN COLOMBIA By enacting the UNCITRALModel Law the Colombian legislator has provided a complete set of modern arbitral provisions whichwill improve the security and predictability of Colombia as a seat of international arbitration. Among other improvements, the international chapter: • Bars state entities from relying on their domestic laws to contest the arbitration on the basis of an alleged incapacity to arbitrate or the inarbitrability of the dispute • Allows the parties to agree to eliminate or limit the grounds for setting aside the arbitral award and expressly instructs that judgesmay not review themerits of the underlying dispute, the weight given by the evidentiary ruling of the arbitral tribunal or the reasoning and interpretation of the award • Stipulates that an international arbitral award granted by a tribunal sitting in Colombia shall be treated as a national awardwith no requirement of recognition for enforcement • For international awards from tribunals sitting outside Colombia it replaces the exequatur with a recognition procedure. In this case the only grounds to oppose recognition are limited to those found in the New York Convention Ultimately, the success of the reformwill depend on how the judicial branch interprets and applies the law. However, inferring from the experiences of the international laws onwhich it is based, the optimismabout the future application and impact of Law1563 is not unjustified. Before the enactment of Law1563 of 2012, Colombia lacked amodern international arbitration regime, which resulted in the referral of international arbitrations to centres such as the ICC and the ICDR outside Colombia. With the adoption of the UNCITRAL rules, that trend is set to change. The new international arbitration rules have already been adopted by the CCB. The CCB runs one of themost recognised schools of International Arbitration in the region. It is also the official ICC representative in Colombia and the only Latin American institution authorised to conduct ICSID hearings.
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