National Arbitration in Colombia

February 19, 2023

Arbitration is an alternative dispute resolution (ADR) mechanism whereby the parties submit to arbitrators the resolution of their disputes concerning matters of free disposition or those authorized by law. By choosing arbitration, the parties decide in a private dispute resolution procedure instead of going to court.

Arbitrators are impartial and specialized third parties, who act as judges by temporarily having the public function of administering justice, through the execution of an arbitration agreement agreed upon by the parties. At the end of the arbitration process, a decision called an arbitration award is issued, which has the same legal effects as a court judgment.

Arbitration is governed by the principles and rules of impartiality, suitability, promptness, equality, orality, publicity, and contradiction.

At AGT Attorneys, we have a comprehensive legal team with experience in more than 20 areas of law that will be able to advise you legally in your arbitration process. If you have doubts or require legal advice to carry out a national arbitration in Colombia, do not hesitate to contact us.

Write to our Contact Form to schedule an appointment with our team or contact us at +57 310 5706331.

What is national arbitration in Colombia?

Arbitration is a procedure whereby a dispute is submitted, at the will of the parties, to an arbitrator or a tribunal of several arbitrators, for the purpose of rendering a decision to resolve the dispute.

In Colombia, national and international arbitration are established in Law 1563 of 2012 or Arbitration Statute. Article 1 of the aforementioned law stipulates that national arbitration:

"It is governed by the principles and rules of impartiality, suitability, celerity, equality, orality, publicity, and contradiction."

Consequently, domestic arbitration will be ad hoc if it is conducted directly by the arbitrators. On the other hand, it will be institutional arbitration if an arbitration center conducts it.

Taking into account the basis of the decision made by the arbitrators, the national arbitration may be in law, equity, or technical.

How does arbitration work in Colombia?

As mentioned above, arbitration is regulated by Law 1563 of 2012, therefore, in principle, it will be developed in accordance with the provisions of this law. Now, according to Article 58 of this law, arbitration in which the parties are different from the State or any of its entities, the parties may agree on the rules applicable to the process. In this regard, they may refer to the rules of an arbitration center if they so wish.

In any case, in Colombia, arbitration proceedings are legally required to be guided by and respect constitutional principles such as due process, the right of defense and the equality of the parties.

In other words, individuals who decide to resort to arbitration to settle their disputes may agree to procedural rules other than those set forth in Law 1563 of 2012 or in the General Code of Procedure, provided that they respect the aforementioned constitutional principles.

Additionally, Law 1563 mandates the application of the Code of Administrative Procedure and Contentious-Administrative Matters in relation to the grounds for impediment and recusal when the State or any of its entities is a party to the arbitration. The provisions of this code shall also apply to the issues of precautionary measures and when there is no arbitration agreement and the process must be submitted to the contentious-administrative jurisdiction.

Our lawyers have the experience and specialized knowledge to handle your national arbitration process in Colombia. If you have any questions about the arbitration process or arbitration clauses, do not hesitate to consult one of our specialists. Write to our Contact Form to schedule an appointment with our team or contact us at +57 310 5706331.

What are the benefits of arbitration?

Arbitration is an alternative dispute resolution mechanism to ordinary justice. It offers several benefits or advantages, which is why companies and private parties resort to this mechanism to solve disputes arising from their contracts. Some of these advantages include:

Expedition:

the processes carried out by arbitration are primarily more agile in their duration than those carried out before the ordinary justice system.

Confidentiality:

unlike the publicity in the proceedings before the jurisdiction, confidentiality may be agreed on the issues and matters dealt with.

Impartiality:

arbitrators are impartial professionals. This is a very valuable characteristic in proceedings against the State or one of its entities.

Plurality:

the case is not decided by only one (1) person, but by usually three (3) who may be chosen directly by the parties or by the arbitration center when this faculty is delegated.

Specialty:

arbitration tribunals are made up of specialists with extensive proven experience in the subject of the dispute to be settled. This is important, since the parties will be able to decide the professional with the ideal knowledge to resolve the case in the best possible way.

Legal certainty:

at the end of the arbitration, an arbitration award is issued, which definitively resolves the dispute. The award is a decision that is enforceable.

Who are the arbitrators?

Arbitrators are those persons (odd number) who are in charge of resolving the dispute by means of the arbitration award. Thus, the parties jointly determine the number of arbitrators, which must always be an odd number because a majority vote makes all decisions. In the event that it is not determined how many arbitrators compose the arbitration tribunal, they shall be three (3).

In relation to the above, the integration of the tribunal corresponds to the parties initially, so they will agree on the names of the arbitrators. However, they have the possibility of delegating to a third party the total or partial appointment of the arbitrators.

Consequently, the parties may delegate the appointment of arbitrators to an arbitration center and thus may result in following the rules of the center. For these cases, the law determines that such designation is made by drawing lots within the specialty in the law of the dispute, seeking to ensure an equitable distribution among the arbitrators.

In short, it is important to bear in mind that the possibility for the parties to choose the arbitrators is based on the principle of will. This empowers the parties to freely determine formulas regarding the choice of the arbitration tribunal.

What is the arbitration agreement and arbitration clause?

Article 3 of Law 1563 of 2012 defines the arbitration agreement as follows:

"The arbitration agreement is a legal transaction whereby the parties submit or undertake to submit to arbitration any disputes that have arisen or may arise between them...
The arbitration agreement may constitute a compromise or an arbitration clause."

Therefore, Colombian law recognizes two (2) types of arbitration agreements: the arbitration clause and the compromise.

National arbitration in Colombia is a judicial relief measure to which many businessmen and private people resort to in order to reduce the time that a process takes in comparison with the ordinary jurisdiction.

In our firm, we have consulting lawyers who will advise you in your national arbitration process when you decide to use this mechanism to solve your controversies. Write to our Contact Form or contact us at +57 310 5706331 to schedule an appointment with our team.

What is an arbitration award?

According to the definitions established in Law 1563 of 2012 on national arbitration, the arbitral award is the sentence issued by the arbitration tribunal.

The New York Convention of 1958, determines that the awards are those decisions issued by an arbitral tribunal, which, having analyzed the arguments of the parties, definitively resolve one or more disputes that have been submitted to it. The arbitration award gives an end to the arbitration proceedings.

Hence, the award may be decided in law, in equity or technical. In other words, an award in law is made when the decision is based on the rules in force; in equity, when the arbitrators rely on common sense and fairness; and finally, a technical award, when the decision takes into account knowledge of an art, science, or trade.

The arbitral award and the decisions made by the tribunal are adopted by majority vote, unless otherwise agreed by the parties. Thus, the same law requires that the award be reasoned, be in writing, indicate the date and place of arbitration and be signed by the arbitrators or arbitrators who formed the tribunal.

What appeals can be filed against the arbitration award?

Appeals are means of challenging judicial decisions that have been taken in connection with a proceeding. Likewise, arbitral awards, being decisions issued during a proceeding, are also subject to the possibility of appeals.

According to Law 1563 of 2012, in its article 39 and following, it is determined that against the arbitration award, the extraordinary appeals of annulment and review shall proceed.

In the first place, during the five (5) days following the notification of the award, it may be clarified, corrected and supplemented ex officio. Additionally, this action within the arbitration process may be at the request of a party, who requests it within the same five (5) days.

Secondly, the extraordinary appeal for annulment must be filed before the arbitral tribunal with an indication of the grounds invoked. This appeal must be filed within thirty (30) days following the notification of the award or the ruling on the clarification, correction, or addendum.

Finally, the appeal for annulment of the arbitral award seeks to invalidate such judicial proceeding. It is pertinent to note that the purpose of this appeal is not to enable a new trial on the issue already resolved in arbitration. In any case, the judge hearing the annulment cannot amend the arbitral decision.

Do you need legal advice in your arbitration process in Colombia?

Law 1563 of 2012 regulates national and international arbitration in Colombia. This law establishes the general framework of how to manage an arbitration process, general definitions, arbitrators, the composition of the arbitration tribunal, the effects of the arbitral award, among others.

Arbitration, therefore, is a dispute resolution mechanism that is often used by companies and individuals seeking to have shorter processes and greater specialization in the knowledge of those who resolve conflicts.

In this blog, we explain the general issues of arbitration as a concept and national arbitration in Colombia. You can also read our blog on international arbitration, where we explain its benefits and how it operates.

Are you looking for a team of expert lawyers to provide you with comprehensive and personalized legal advice to handle your arbitration in Colombia?

In our firm, AGT Attorneys, we have professional experts in national and international arbitration who will advise you throughout the arbitration process, from the incorporation of arbitration clauses in your contracts. Arbitration is a tool stipulated in the Colombian and international regulatory system that brings many benefits when contractual conflicts arise.

Write to us on our Contact Form, schedule your legal appointment with our lawyers through the following link or contact us at +57 310 5706331.

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