COLOMBIA Trends and Developments Contributed by: Juan Mendoza, Manuela Hernández Contreras, Andres Parra and Daniel Munera, DRET
DRET Legal Cra 11 # 94 A 03 – Ofc 701 Bogotá, Colombia Tel: +57 3102 133 683 Email: manuela.hernandez@dret.legal Web: dret.legal
Introduction After four years under a left-wing presidency, a new horizon is opening for Colombia – one built on the promise of stability, renewed growth and a fresh wave of investment. In August 2026, a pro-business govern - ment took office. Its incoming cabinet is built largely of industry professionals and executives. That shift did not wait for the inauguration to register. Since the election result was confirmed in June, the Colombian peso has strengthened close to 16% this year, one of the best performances of any emerging-market cur - rency in the world. Investors have grown noticeably more willing to hold Colombian debt too. Markets, in other words, are already pricing in the stability the country has been waiting for – and asking interna - tional investors to trust it too. Earlier in 2026, the outgoing government announced that Colombia intended to withdraw from the inter- national investment arbitration system, including the International Centre for Settlement of Investment Dis - putes (ICSID). The announcement followed a public letter from more than 200 economists who argued that investor-state arbitration lets multinational cor - porations challenge legitimate public policy in private tribunals, under protections no domestic company or citizen enjoys. Colombia’s business associations and much of its arbitration Bar saw things differently. With - drawing from ICSID, they argued, would not eliminate the country’s exposure to investor claims – 19 sepa - rate investment treaties would remain in force regard - less. It would, however, damage Colombia’s standing among the very capital-exporting nations it is com - peting to attract.Months after the announcement, no treaty had been formally denounced, and no further statement followed. What this episode produced
was not rupture but uncertainty – one we expect the incoming government to leave behind, using interna - tional investment arbitration as a strong incentive to attract investors. Such expectation, admittedly, is a supposition – though it would benefit not just our legal industry, but the country’s development. It is not, how - ever, the subject of this article. Our scope here is com - mercial arbitration – the mechanism Colombian busi - nesses and their foreign counterparties rely on most. Having set investment arbitration aside, we make a parallel case for commercial arbitration: a mechanism built on international standards and genuine judicial independence. To make that case, consider two interesting prec - edents. Case 1 A case in which a non - signatory parent could not escape its own conduct . In 2019, company A (“A”), a Colombian company, signed a supply agreement to buy commodities in Colombia. Its counterparty on paper was company B (“B”), the Colombian branch of a foreign company. That structure – a foreign group operating through a Colombian branch rather than a locally incorporated subsidiary – is common, and not by accident: it pre - serves a degree of separation between parent and local operations. The support provided by A allowed B to certify the commodities, secure financing and monetise from early supply – steps its own parent group relied on in its own disclosures to international markets. Then, months before a far more valuable period was due to begin, B terminated the contract unilaterally, invoking
272 CHAMBERS.COM
Powered by FlippingBook