COLOMBIA Law and Practice Contributed by: Juan Mendoza, Manuela Hernández Contreras, Andres Parra and Daniel Munera, DRET
The International Regime: Developing Through Case Law, not Legislation As for the international regime itself, no recent legisla - tive reform or pending bill would amend Law 1563’s Third Section. Development here has instead come through case law. Over the past year, the Supreme Court and the Council of State have sharpened sev - eral procedural questions that Law 1563 leaves open, including: • Whether annulment actions can suspend enforce - ment of international awards. • The admissibility of partial awards. • The standards governing recognition of foreign awards. 3. The Arbitration Agreement 3.1 Enforceability Formal Requirements: a “Written Agreement” Under Colombian law, an arbitration agreement is the parties’ mutually binding decision to submit present or future disputes to arbitration – whether through a clause in a larger contract or a standalone submis - sion agreement. The only formal requirement is that it be recorded in writing, and Colombian courts inter - pret “writing” broadly. Electronic communications, an exchange of pleadings in which one party asserts the agreement’s existence without denial from the other, or even a contract that simply references a separate document containing the clause, are all sufficient in principle. Arbitral tribunals, however, tend to apply this standard more conservatively, generally recognising only a clearly written arbitration agreement. Parties relying on anything short of an explicit written clause should be aware of that gap between the formal standard and how tribunals apply it. Referral to Arbitration and Parallel Proceedings If either party requests it, no later than when it responds to the claim, Colombian courts will refer the dispute to arbitration rather than hear it themselves. A paral - lel court proceeding does not, in principle, prevent an arbitration from starting or continuing in the meantime. That rule, however, is not applied with full consist - ency. Some judges – including, on occasion, courts in Bogotá – have disregarded a valid arbitration agree -
whether the parties were domiciled in different states when they signed the arbitration agreement – regardless of what the parties themselves might prefer to call their dispute. A Structural Risk Worth Watching Colombia’s domestic and international regimes thus rest on different rules, courts and thresholds for a stay. As a result, parties to a dispute with a contested international element could, in principle, see related proceedings advance under both regimes at once. In our view, this dualism is a structural risk that mer - its closer attention as arbitration activity in Colombia continues to grow. 2.2 Changes to National Law Domestic Reform: Law 2540 of 2025 The most significant legislative change of the past year is Law 2540 of 2025, which introduced arbitration for enforcement proceedings in Colombia. The reform creates a new arbitral track, governed by the domestic section of Law 1563, for enforcing instruments such as mortgage-backed credit and securities. It relies on specialised “enforcement arbitrators”, and interim relief is administered through arbitration rather than the ordinary courts. An enforcement arbitration clause can arise in two ways: through a standalone arbitration agreement attached to the underlying instrument, or automatical - ly, where the instrument itself already contains a gen - eral arbitration clause. In the latter case, the enforce - ment track applies without any separate document. That reform does not touch the international arbitra - tion regime in Law 1563’s Third Section directly – Law 2540 operates entirely within the domestic section. But confining the new mechanism to the domestic sphere leaves a gap: a single underlying transaction with an international element could, in principle, face enforcement arbitration, domestic arbitration and international arbitration proceeding at once, with no statutory mechanism to co-ordinate between them. It does, however, strengthen Colombia’s broader arbitral ecosystem and institutional infrastructure.
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