Apr 2023


Law Over Borders Comparative Guide:



1 . Key considerations in deciding whether to arbitrate in this jurisdiction


1.1. Advantages

Colombia is an arbitration-friendly jurisdiction overall. Law 1563 of 2012 and most judicial decisions have followed the approach of the New York Convention for recognition and enforcement of awards. Local regulations also further limit the intervention of courts. There have been very few annulments of awards issued in international arbitration. 


1.2. Disadvantages and common pitfalls

Specific rules and judicial decisions have adversely affected international arbitration in Colombia. For instance, Presidential Directive 4 of 2018 imposes several limitations for arbitration with State agencies. 

As to judicial decisions, in a case decided in 2019, the Constitutional Court decided that a constitutional action (tutela) can be upheld against international awards, although only for “highly exceptional circumstances.” Additionally, in 2020 the State Council interpreted grounds for annulment based on deviations from the agreed procedure broadly. Lastly, in 2022 the Supreme Court rejected the enforcement of an investment award on the grounds of sovereign immunity. 


1.3. Other distinctive features

Colombia has separate arbitration regimes for domestic and international arbitration. See further Section 2.2, below.


2 . Principal laws and institutions relating to international arbitration in this jurisdiction


2.1. Legal framework

The principal domestic regulations relating to international arbitration are the Constitution and Law 1563 (the Colombian Arbitration Statute). Law 1563 regulates domestic and international arbitration separately (domestic arbitration (Articles 1-58) and international arbitration (Articles 62-116)).

Key international instruments include the New York Convention, the Panama Convention, the ICSID Convention, and different investment treaties. 

The courts that hear arbitration matters are the Colombian Supreme Court, the Council of State (when the dispute involves a State agency), and the Constitutional Court (which decides on constitutional injunctions).


2.2. What qualifies as international arbitration?

Article 62 of Law 1563 provides that arbitration will be considered international if:

  • at the time of the conclusion of the arbitration agreement, the parties have their place of business in different States;
  • a substantial portion of the primary obligations are fulfilled outside of the country; or 
  • the dispute affects the interests of international trade.

Under Colombian law, arbitration cannot be deemed international only by the parties’ agreement.


2.3. Main local international arbitration institutions

The largest arbitration centers for international matters are the Chambers of Commerce of Bogota, Cali, and Medellin.


3 . Arbitration agreements


3.1. Requirements as to content and form

Article 69 of Law 1563 states that the arbitration agreement can take the form of a contract clause or a separate agreement. It must be in writing, but it will also be valid if it is concluded orally and there is certainty about its content. 

As to the content, an arbitration agreement must:

  • express the parties’ consent to submit to arbitration; 
  • concern a matter that can be settled by arbitration under Colombian law; and 
  • refer to a current or future dispute. 

3.2. Validity of arbitration agreements

For an arbitration agreement to be valid:

  • parties must have the capacity to enter into the arbitration agreement (capacity is understood as legal capacity, including a person’s ability to enter into contracts or acquire rights and obligations); 
  • they must have consented to do so; and 
  • the object of the agreement must be specific and lawful. 

3.3. Special formalities

Under Presidential Directive 4, special conditions govern arbitration agreements with State agencies. Most notably, the Directive prohibits arbitration agreements under the ICSID Rules in contracts with the State.

Additionally, the decision to enter into an arbitration agreement must:

  • be justified in light of the parties, the object of the contract, and the amount of the contract; and
  • be approved by the General Director of the National Agency for the Legal Defense of the State (ANDJE) if the arbitration is international.

3.4. Governing law

Article 101 of Law 1563 allows the parties to choose the governing law. However, if the parties do not specify the governing law, arbitrators may apply the laws they consider adequate, including contract terms and trade usages.


4 . Arbitrability


4.1. Applicable restrictions

Under Colombian law, the following types of disputes cannot be resolved in arbitration: 

  • certain matters related to civil law, such as the marital status of persons, as well as several issues of tax, labor, and criminal law; and
  • the legality of administrative acts issued in the exercise of the State’s iure imperii (except for the economic effects arising therefrom).

5 . Enforcing arbitration agreements


5.1. Stay of proceedings

Law 1563 does not contain any specific rule on the stay of proceedings. However, a party to the arbitration agreement could stay proceedings brought before local courts, arguing as a preliminary objection the existence of a valid arbitration agreement, as set forth in Article 100.2 of the General Code of Procedure (which applies to domestic proceedings). As per Articles 101 and 369 of the same law, it would have to present this objection within 20 days since the other party files its Memorial.

A similar language is found in Article 70 of Law 1563, which states that judges must refer parties to arbitration if there is a valid agreement. This Article is applicable in an international arbitration.


5.2. Anti-suit injunctions

Law 1563 of 2012 does not regulate this matter specifically. Under Article 70, judges must refer parties to arbitration if there is a valid agreement in place. An anti-suit injunction issued by the tribunal could be considered a provisional measure ordered under Article 80.

As to antisuit injunctions before local courts to restrain a party from commencing or continuing legal proceedings abroad in breach of an arbitration agreement, there is no precedent of such a situation in Colombia. However, the language of Article 590 of the General Code of Procedure (which refers to provisional measures in general) is broad enough to make such an alternative available to the parties. 


6 . Arbitral Tribunal


6.1. Restrictions on the parties’ freedom to choose arbitrators

Apart from the rules detailed in this section, Law 1563 of 2012 does not restrict the parties’ freedom to choose arbitrators in international arbitration. Under Article 73, a person’s nationality will not be an obstacle to their appointment, and they do not have to be lawyers or be admitted to practice in the arbitral seat. 


6.2. Requirement of arbitrator independence and impartiality

Colombian laws on international arbitration do not specify grounds for challenging an arbitrator. However, Article 75 of Law 1563 says that challenges arise from circumstances potentially affecting the impartiality or independence of the arbitrator. 


6.3. Mandatory rules applicable to the appointment process

Article 73.4 of Law 1563 states that parties are free to determine the procedure for appointing arbitrators. Article 71 only requires an odd number of arbitrators. 

Presidential Directive 4 includes specific mandatory rules of procedure for appointing arbitrators in disputes with State agencies (except for investment arbitrations). These rules state that:

  • the chief legal officers or legal directors of the State entity involved in the arbitration must send the list of candidates to the ANDJE, which then determines their convenience (although the Directive does not provide further details on how to determine the convenience of candidates, in practice, this may refer to aspects such as their professional profile and experience, previous relationships with the State or State-owned agencies, prior public awards, outstanding proceedings against public entities, among others); and
  • the President’s Legal Secretary approves or rejects the candidates following consultation with the General Secretary of the Presidency.

Notably, State agencies cannot appoint as arbitrator a lawyer who acts against the State in other proceedings.


6.4. Appointment mechanism in the absence of party agreement or applicable institutional rules

Apart from the rules addressed above, Law 1563 provides that in the absence of an agreement:

  • The default number of arbitrators will be three, or one for small claims (small claims are those not exceeding a total of 40 Colombian minimum wages, i.e., equivalent of USD 10,000 in March 2023). If there is a single arbitrator and parties cannot agree on the appointment, a judge will decide on the appointment within 30 days.
  • If there are three arbitrators, each party will appoint one, and both arbitrators will choose the third. If the co-arbitrators fail to reach an agreement on the third arbitrator within 30 days after the communication confirming their appointment, the appointment can be made by a domestic court following the request by any of the parties.

6.5. Mandatory rules applicable to the replacement process

Under Article 78 of Law 1563, parties may mutually agree on the process to replace an arbitrator. Absent such an agreement, the replacement will follow the same procedure applied to appoint an arbitrator.


6.6. Mandatory disclosure obligations

Article 75 of Law 1563 dictates that, from their appointment onwards, the arbitrator must disclose all possible circumstances that could raise doubts about their independence and impartiality. This obligation subsists until the end of the proceedings. 


6.7. Grounds for challenge

Article 75 of Law 1563 sets forth the grounds for challenging an arbitrator and refers to circumstances that could affect their impartiality and independence. There are no further details in this regard. In one particular case [Decision No. SC9909-2017, dated 12 July 2017], the Supreme Court referred to the IBA Guidelines on Conflicts of Interest in International Arbitration. 


6.8. Mandatory rules governing the challenge of arbitrators

Article 76 of Law 1563 says that parties are free to determine these rules. However, absent such an agreement, the following rules will apply:

  • the challenge must be made as soon as the parties know of its causes (unlike the Model Law, Law 1563 does not provide a specific timeframe to present the challenge or a more detailed definition of the terms ‘as soon as possible’); 
  • challenged arbitrators, as well as the opposing party, can reply within 10 days of the request; 
  • if the parties disagree, or the arbitrator opposes the challenge or remains silent:    
    • in the case of a sole arbitrator, the challenge will be decided by the administering institution or the judiciary; 
    • in the case of three arbitrators, the other arbitrators will decide the challenge; if there is a tie, the president will decide unless he is the one being challenged, in which case the arbitral institution that appointed him or judicial authority shall decide; and
    • the procedure for a sole arbitrator will also apply if two or more arbitrators are challenged for the same reason; 
  • while the challenge is being decided, the tribunal may proceed with the arbitration; and
  • there is no appeal from a decision on a challenge. 

6.9. Removal

Colombian laws give preference to the parties’ agreement on removing arbitrators. 

In the absence of an agreement, Article 77 of Law 1563 says that if the parties agree on removing an arbitrator, they can file a request with the judiciary to do so.


6.10. Liability and immunity of arbitrators

Colombian laws do not contain a general rule on arbitrators’ immunity. High courts have stated that arbitrators’ liability equates to that of judges. Under that standard, as stated by the Council of State [Decision No. 39798, dated 11 October 2021], arbitrators are liable for any judicial mistake, which should be understood as a manifest error of appreciation of fact or law.


7 . Assistance by the State courts

Article 67 of Law 1563 says that the judiciary cannot intervene in international arbitrations except where the law expressly provides so. Courts’ intervention is thereby limited to: 

  • the appointment of arbitrators;
  • the enforcement of interim measures;
  • assistance in the taking of evidence;
  • challenges to arbitrators or their removal; and 
  • recognition and enforcement of awards. 

7.1. Interim measures

Under Article 88 of Law 1563, any interim measure adopted by a tribunal will be enforceable without the need for recognition. The only grounds for denying such enforcement are found in Article 89, which resembles the grounds for annulment.

The party that requests the enforcement of an interim measure must inform the judge of any repeal, suspension, or modification of the measure. 

Colombian courts may also deny the enforcement of an interim measure ex officio when the subject matter of the dispute cannot be decided by arbitration or if the enforcement would be contrary to “Colombia’s international public order.”

It is pertinent to note that in enforcing interim measures, awards judges cannot assess the merits of the interim measure.


7.2. Taking of evidence

Article 100 of Law 1563 states that the tribunal or any party can request the judiciary’s assistance to take evidence as long as they have permission from the tribunal. This refers to both witnesses and documents, and may cover pre-hearing evidence as well as getting evidence for presentation at a hearing. Law 1563 does not make a distinction on the type of evidence subject to this rule, while the General Code of Procedure – which would be the domestic law applicable in these circumstances – grants judges powers over all type of evidence.


7.3. Appointment or challenge of arbitrators

Colombian judges may intervene in the appointment of arbitrators, as explained above in Section 6.4, particularly when there is no agreement between the parties or the party-appointed arbitrators. Additionally, they may intervene to decide challenges when there are no other means to deal with such situations.


7.4. Other available assistance

Besides the circumstances reviewed before, Colombian regulations make no reference to other types of assistance by the State courts.


8 . General procedural (minimum) requirements

Article 92 of Law 1563 says that the parties are free to determine how the arbitration will be conducted. Absent such an agreement, the tribunal may conduct the proceeding as deemed appropriate and is not bound to refer to the procedural laws of the seat. 

The parties are, therefore, free to agree on most matters of procedure. For example, they can decide the seat of the arbitration (Article 93) and its language (Article 95). They can also determine whether hearings will be held to take evidence and oral arguments, or if the proceedings will be based only on documents (Article 97).

There are no mandatory rules on where the hearings will be conducted or whether they must take place in person.


9 . Confidentiality

Colombian laws remain silent regarding confidentiality in arbitral proceedings. These rules may be found in institutional arbitral rules.


10 . Awards


10.1. Requirements as to content and form

Article 104 of Law 1563 sets forth four requirements as to the content and form of awards, namely that: 

  • the award must be in writing and must be signed by the arbitrators (if there are two or more arbitrators, the signature of the majority or the president will suffice);
  • the tribunal must justify its decision unless:
    • parties have agreed otherwise and none of them has its place of business in Colombia; or
    • it is an award by consent;
  • the award must indicate the date of issuance and arbitral seat; and
  • the tribunal must notify the award to the parties. 

10.2. Time limit

Law 1563 does not impose any time limit for rendering an award. 


10.3. Remedies

Colombian laws do not limit the remedies that an arbitral tribunal can award. The tribunal is empowered to provide any remedy that is permissible under the applicable law, provided that it does not conflict with Colombian international public policy. Remedies available under Colombian law include compensation, restitution, nullification, declaratory relief, and specific performance.


11 . Post-award proceedings


11.1. Interpretation and correction of awards

Under Article 106 of Law 1563, within the month following the notice of the award:

  • any of the parties can request the tribunal to correct any mistake of calculation, transcription, or typographical error, or to clarify a specific matter of the award (a clarification may refer to any part of the award, for instance, a section of the decision that is unclear);
  • the tribunal can, ex officio, correct any of the errors mentioned above; and any party can request the tribunal to issue an additional award regarding claims raised during the arbitration and omitted in the award. 

11.2. Challenge of an award

The only possible challenge against an award is the annulment proceeding. According to Article 68 of Law 1563, the court with jurisdiction is the Civil Chamber of the Supreme Court of Justice or the Third Section of the State Council (when the dispute involves a State agency). 

An award can be annulled on the following grounds under Article 108.1: 

  • at the time of conclusion of the arbitration agreement, a party lacked legal capacity, or the said agreement was invalid;
  • the appointment of an arbitrator or the initiation of the arbitration was not properly notified to one of the parties, or it could not assert its rights for any other reason;
  • the award deals with a matter not provided for in the arbitration agreement or contains decisions that exceed its terms; or 
  • the tribunal’s composition or the arbitral procedure were not in accordance with the parties’ agreement.

Additionally, Article 108.2 also says that an award may be annulled ex officio when:

  • the subject matter of the dispute cannot be resolved by arbitration under Colombian law; or
  • the award is contrary to “Colombia’s international public policy.” 

The annulment procedure is set forth in Article 109 as follows:

  • the annulment shall be filed before the competent judge within the month following the notification of the award (or its correction);
  • if admitted, the request for annulment will be notified to the other party, who will have one month to reply;
  • the judge must decide within the following two months; and
  • there is no appeal against the annulment decision.

11.3. Recognition and enforcement proceedings

Article 115 of Law 1563 provides the procedure for requesting recognition of a foreign award:

  • the party requesting recognition must present the original award or a copy (if the award is not in Spanish, the judge may request a translation);
  • if the judicial authority finds that the documentation is complete, it will admit the application and notify the other parties, who will have ten days to answer; and
  • once this period is over, the judge will decide on the request for recognition within the following 20 days.

There is no time limit for bringing an action to recognize and enforce an award under Colombian law.

Recognition may only be denied on the grounds under Article 112, which resemble those for annulment.

According to Article 116, an award can be enforced once recognized. Article 111 provides that:

  • awards in international arbitrations seated in Colombia are considered domestic awards and thus granted automatic recognition, except if the parties waived their right to annulment; and 
  • awards issued in arbitrations with a seat different from Colombia must be recognized. 

11.4. Cost of enforcement

The enforcement costs before Colombian courts are not fixed and are determined on a case-by-case basis. The proceeding itself does not have a cost, as access to justice in the country is free. However, parties interested in these proceedings should consider cost elements such as lawyers' fees, applicable taxes, and administrative costs. 


11.5. Enforcement of orders of emergency arbitrators

This situation is unprecedented in the country and Law 1563 does not expressly contemplate emergency arbitrators. Therefore, emergency arbitrator relief is preliminarily unavailable. 

However, orders from emergency arbitrators could be treated as interim measures pursuant to Article 80 of Law 1563 (which has broad language and is based on the Model Law). In that scenario, general rules on provisional measures would be applicable to this matter (see above Section 7.1). 

There is currently a Bill before Congress to amend Law 1563, which includes an express reference to emergency arbitrator relief, except in cases with State agencies.


12 . Enforcement of foreign awards


12.1. Process for enforcing New York Convention awards

For the recognition and enforcement of foreign awards, Colombian courts consider the provisions set forth in Article IV of the New York Convention and Article 111 of Law 1563. Although domestic courts may indistinctly refer to one or the other, both rules are similar. 

Under Article 111 of Law 1563, the party requesting recognition or enforcement must present the following: 

  • the duly authenticated original award or a duly certified copy thereof; and 
  • if the award is not in Spanish, an official translation (if requested by the court).

12.2. Grounds for resisting enforcement of New York Convention awards

Colombian judges apply Article V of the New York Convention and Article 112 of Law 1563 as grounds for resisting enforcement. 

The grounds for annulment of the New York Convention were incorporated into Article 112 of Law 1563, although Colombian courts may indistinctly refer to one or the other. 

When interpreting public policy under the New York Convention, the Supreme Court has ruled that:

  • recognition on these grounds may only be refused if there is a violation of fundamental values and principles on which the legal institutions of the domestic legal system are based; and
  • this refers to fundamental guarantees that secure the right to defence and a fair trial, such as the parties’ right to receive adequate notice, present their case, equality, and impartiality.

12.3. Enforcing Non-Convention awards

Considerations on Article 111 of Law 1563 above apply to these cases (see above Sections 12.1 and 12.2).


13 . Professional and ethical rules


13.1. Applicable to counsel

Law 1123 of 2007 contains the disciplinary regime applicable to all practicing lawyers, including those excluded or suspended, or those who work with a provisional license. This Law incorporates a series of actions that constitute disciplinary breaches, such as violations of confidentiality.


13.2. Applicable to arbitrators

No specific body of law contains professional or ethical rules applicable to international arbitrators. Arbitrators in domestic arbitrations are subject to the same rules as judges.

However, the duties and obligations of international arbitrators arise from other regulations relevant to this type of arbitration. Examples of such duties and obligations include: 

  • being independent and impartial, and revealing any circumstances that could affect these qualities;
  • conducting the arbitration on equal terms and allowing each party to assert its rights; and
  • issuing an award deciding the dispute subject to arbitration applying the laws agreed by the parties and in a timely manner.

14 . Third-party funding

Third-party funding is not prohibited nor regulated under Law 1563 or other domestic regulations. 


14.1. Applicable regulatory requirements

There are no prohibitions on the use of litigation funding in Colombia. Under the principles of contractual freedom and party autonomy, funding agreements are valid and enforceable.


14.2. Overview of the third-party funding market in this jurisdiction

In Colombia, it is common to see cases where litigious rights are assigned to a third-party, a traditional figure in civil law jurisdictions. This may be done at a cost or for free. However, in such a scenario, the assignee replaces the assignor in its rights and obligations.

This differs from third-party funding, where the claim’s owner commonly remains as a party to the proceedings. Some companies have financed cases in the country based on assignment, though the specifics of such agreements remain confidential.

Although the market is limited to a few funders and consumers, most of them being experienced companies with an international presence and highly litigious clients, some startups in the country have started providing funding services.


15 . Trends and recent developments

In mid-2021, the Ministry of Justice filed before Congress a Bill to amend Law 1563, which intends to introduce substantial changes to national and international arbitration, for instance, promoting the use of new technologies, changing the criteria to define what constitutes an international arbitration, and adjusting the rules applicable to interim measures, among others. The Bill is still under review. 




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