COLOMBIA Trends and Developments Contributed by: Juan Mendoza, Manuela Hernández Contreras, Andres Parra and Daniel Munera, DRET
At first glance, one may consider that proving that point rested on two pieces of evidence: • Witness testimony that established, by name, that the people who had been negotiated with – ie, the ones who accepted the original offer, discussed contract terms and later proposed amendments – held positions at headquarters, not at the branch. • Any communication that reveals who is making the decisions – however small. A simple “OK” may, as it was in this case, be enough. A one-word reply from a headquarters representative, approving the switch from courts to arbitration, became the clear - est evidence of all. A parent’s hand in a relationship like this can show up in two very different ways. Sometimes it is unmistak - able – the parent negotiates openly, signs the cor - respondence, sits at the table – and the real question is why it would ever try to hide behind the branch. At other times, it leaves almost nothing behind: no letter - head, no meeting minutes… just a single word buried in an email chain, uncovered only because someone went looking for it. Both point to the same conclusion. Only one takes real work to find. Together with the shared executives and headquar - ters’ own letterhead on the termination notice, this evidence fit a doctrine well established in international arbitration, even though Colombian law does not cod - ify it expressly: the “group of companies” doctrine. Under it, a non-signatory that actively participates in negotiating, performing or ending a contract can be found to have implicitly consented to arbitration. The sole arbitrator agreed, drawing on the same reason - ing that courts in France and India have applied in comparable cases, and confirmed jurisdiction over B’s headquarters in the same partial award that settled the internationality question. A foreign investor structuring its presence through a local branch does not get to hide behind that struc - ture when things go wrong – and, just as importantly, cannot be forced to answer a dispute it genuinely had nothing to do with. The test is not the vehicle; it is who controlled the relationship. For any foreign com - pany weighing how to structure its next investment in Colombia, that is the right kind of certainty to have: a
system that looks past form and holds the real party to account, consistently and based on the evidence, rather than on convenience. Case 2 A case in which the principles of competence - competence and minimal intervention proved to be two sides of the same coin . A second dispute, in the energy sector, tested the same principle from a different angle. Two counter - parties, bound by a series of supply agreements, disa - greed sharply over how a disruption in performance should be treated – one side invoking relief the con - tracts themselves provided for, the other rejecting such relief outright. Unable to agree even on where the disagreement should be heard, each pursued a different forum: one initiated an international arbitra - tion; the other opened a parallel domestic proceeding. This kind of forum contest is not, in itself, unusual – sophisticated parties routinely disagree about where a dispute belongs, and each side has every incentive to press for the venue it believes serves its interests best. What made this case worth watching was not the disagreement, but how Colombian courts responded to it once it reached them. Rather than settling the question itself, the Supreme Court applied a stand - ard of minimal intervention with real discipline: once a tribunal has ruled on its own jurisdiction, that ruling stands, and the Supreme Court’s role is to police the boundary of that decision, not to revisit it. Two forums, two incentives One side’s interest in pursuing the case in an inter - national forum was clear enough: one of the entities involved was, in substance, a foreign-owned opera - tion. International arbitration meant a broader panel, procedural rules aligned with global standards, and a narrower, more predictable channel for judicial review. The other side’s interest ran the other way, favour - ing a forum closer to home. What decided the ques - tion, however, was neither party’s preference; it was Article 62 of Colombia’s Arbitration Statute, applied by the tribunal under the principle of competence- competence. That is precisely the point: a system where convenience could decide jurisdiction would be no system at all. One where an objective legal test
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