COLOMBIA Trends and Developments Contributed by: Juan Mendoza, Manuela Hernández Contreras, Andres Parra and Daniel Munera, DRET
only general provisions of Colombian commercial law and ignoring, in A’s view, both the parties’ own agree - ment and the specific regulatory framework governing the supply in Colombia. Once A invoked the contract’s arbitration clause, a threshold question needed an answer first: should that arbitration be domestic or international? A branch with no domicile of its own Colombia’s Arbitration Statute, Law 1563 of 2012, governs both domestic and international arbitration, and Article 62 sets out when a case qualifies as the latter. Among other criteria, it provides that arbitra - tion is international “when the parties to an arbitration agreement have, at the time that agreement was con - cluded, their domiciles in different States”. The matter was analysed along two dimensions: (i) the branch’s own legal capacity in Colombia, and (ii) headquarters’ actual involvement in signing and performing the con - tract. Answering both would determine whether headquar - ters itself could be pursued through international arbi - tration. The two inquiries are not the same, and con - flating them is a common misstep. Satisfying Article 62 confirms only that the dispute is international – it says nothing about who, beyond the named signa - tory, can be made to answer for it. That distinction cuts both ways. For counsel who are structuring an investment, it calls for a preventive approach: where a group wants the branch, and only the branch, to bear the risk, that separation has to be built deliberately into how the relationship is documented and run, not assumed from the corporate chart alone. That second question is taken up further below; the question of the branch’s own status had to be settled first. Proving the first element meant testing, under Colombian law itself, whether B had legal capacity of its own in Colombia. Colombian corporate law does not treat a branch office as a company. Colom - bia’s Superintendency of Companies – the regulator responsible for interpreting these questions – has said so consistently over the years: a branch is an exten - sion of its parent, carrying out only the activities the parent assigns to it, without a legal personality or a domicile separate from the company that created it. Where the parent is the entity directing the relation -
ship, it is treated as a party to that relationship – and answers as one, not as a bystander shielded by the branch. Applied to this case, that principle carried the greatest weight. B’s own certificate of incorporation – the document every company operating in Colombia is required to keep on file – recorded its domicile not in Colombia, but abroad. The branch’s own paperwork confirmed what the regulator’s guidance already made clear: when a branch has no domicile of its own, it takes on its parent’s. That finding settled the first element on its own – A and B’s foreign parents were domiciled in different States at the time the contract was signed, satisfy - ing Article 62 in its most straightforward sense. Yet it also opened the door to the second, and more con - sequential, question: if a foreign parent stands behind a Colombian branch on paper, does it stand behind it in the arbitration too? The answer from statute hinges on control, not on the corporate chart: where a branch lacks independ - ent legal capacity and the parent has directed the relationship in substance, it is the parent – not the branch – that must answer for the arbitration, both financially and as the party genuinely in control. That is the test tribunals apply once the question moves beyond internationality: not whose name appears on the signature page, but who exercised the authority that signature was supposed to represent. One word, one jurisdiction The doctrine at work here rests on a simple premise, well established in comparative arbitration practice even where domestic law has not codified it: consent to arbitrate does not have to be written to be real. International arbitration treats the arbitration clause as separable from the rest of the contract – a legal fiction that lets a tribunal ask, discretely, whether a non-signatory accepted that specific clause, rather than whether it was merely involved in the deal. Where a group of companies operates through more than one entity, that inquiry looks past the signature page entirely: a parent that negotiates, performs or termi - nates a contract as though bound by it can be found to have consented to arbitrate under it, regardless of who signed.
273 CHAMBERS.COM
Powered by FlippingBook