COLOMBIA Law and Practice Contributed by: Juan Mendoza, Manuela Hernández Contreras, Andres Parra and Daniel Munera, DRET
That objection must be raised as soon as the issue said to fall outside the agreement actually comes up during the proceedings, not necessarily at the very start. The same timing logic applies before courts. A party wanting to invoke an arbitration clause to stop a law - suit must do so no later than its response to that claim – otherwise, it is treated as having given up the arbitra - tion agreement for that specific dispute. Timing carries consequences beyond the arbitration itself: silence on a potential annulment ground can both bar that ground later and weaken any attempt to resist recognition under the New York Convention. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility The standard of judicial review is markedly deferen - tial, not de novo. A court reviewing an award annul - ment does not rule on the merits of the underlying dispute, and cannot revisit the tribunal’s evaluation of evidence, its reasoning or its legal interpretations. Judicial review is confined to verifying whether one of the specific, exhaustive grounds set out in Article 108 of Law 1563 is actually made out – grounds that are, by design, procedural in nature. Two substantive grounds – non-arbitrability and violation of interna - tional public policy – can be raised by the court on its own initiative, but even they do not open the door to a review of the award’s merits. 5.5 Breach of Arbitration Agreement Colombian courts consistently uphold arbitration agreements. If a party sues in the ordinary courts despite a valid arbitration clause, the judge must refer the parties to arbitration and decline jurisdic - tion, once the other party raises the clause in good time. That protection, however, has to be invoked – a court cannot decline jurisdiction on its own initia - tive simply because an arbitration agreement exists somewhere in the relationship. Arbitration rests on a private agreement between the parties, and if neither side raises it, a Colombian court cannot refuse to hear the case; it has no authority to shut the door to ordinary justice unprompted. This deference towards court-versus-arbitration questions is not in doubt. The
recurring gap, as noted repeatedly above, sits else - where: between domestic and international arbitration running in parallel over the same dispute. 5.6 Jurisdiction Over Third Parties Law 1563 does not include a general mechanism for extending an arbitration agreement to non-signato - ries. Voluntariness is the constitutional foundation of arbitration in Colombia, so the default rule is that an arbitration agreement only binds those who signed it. The clearest exception comes from the Constitutional Court: a third party joined under a guarantee is bound by the arbitration clause in the guaranteed contract, because signing the guaranteed agreement is treated as implied acceptance of that arbitration jurisdiction. Outside that specific scenario, Colombian courts have generally been restrictive about extending arbitral jurisdiction to third parties. In domestic arbitration, the Supreme Court has upheld awards that declined to extend an arbitration clause to autonomous trust funds and related development trusts managed by the same signatory trustee, finding no express or implied consent to arbitrate on their part. That restrictive line, however, belongs to the domestic regime specifically – it has no equivalent precedent in international arbi - tration. Where the Doctrine is Moving Arbitral Practice Ahead of the Courts The above said, the frontier of this doctrine sits in arbi - tral practice, not yet in judicial precedent. In a recent international arbitration over a Colombian gas supply contract, a sole arbitrator held a foreign, non-signa - tory parent company to the arbitration agreement its Colombian branch had signed, applying the “group of companyies” doctrine and implied consent – evi - dence that shared management, active involvement in negotiating the arbitration clause, and control over the underlying relationship, can suffice even without a signature. Other arbitration-friendly jurisdictions have applied this reasoning for some time; what is notable is that Colombia had not, until now. If this arbitral trend continues, it would bring Colombian international arbi - tration further in line with established international practice – a welcome development for parties struc - turing cross-border transactions through the country.
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