The Tampico Case and the Recognition and Enforcement of Foreign Awards in Colombia

The Colombian Supreme Court of Justice (hereinafter the SCJ) has made incredible progress in the enforcement and recognition of foreign awards issued in the context of an international arbitration procedure. It is worth noting that there is still an important decision pending at the SCJ stage: the Tampico case.

The Colombian Supreme Court of Justice (hereinafter the SCJ) has made incredible progress in the enforcement and recognition of foreign awards issued in the context of an international arbitration procedure. It is worth noting that there is still an important decision pending at the SCJ stage: the Tampico[1] case.

Tampico Beverages, Inc, an American company, initiated an arbitration under the ICC Rules on International Arbitration in February 1, 2009. A final award was rendered on June 25, 2012 by an arbitral tribunal, whose seat was Santiago de Chile. That award was subject to an annulment procedure, but the Chilean Court did not set it aside. After this latest procedure, on August 27, 2014, Tampico commenced before the SCJ a procedure of recognition under the Hinestrosa Law and, of course, the New York Convention (hereinafter the NYC).

On June 3, 2015, following the Poligráca[2] ruling on the joint implementation of the NYC and the CCP, because the Tampico award was rendered before the entry in force of Law 1563, the SCJ declared the application inadmissible, granting 5 days to the Applicant to rectify the defaults, namely (i) the award must be enforceable according to article 694 (3) of the CCP and (ii) there must be an original or certified copy of the arbitral agreement in light of article IV of the NYC.

Instead of fulfilling the missing conditions as requested by the Court, the Applicant decided to seek a remedy (recurso de reposición) against such decision based on two grounds as follows: (i) the applicable law to the recognition procedure is the Hinestrosa law since the application for recognition was initiated after its entry into force and (ii) that the NYC must be interpreted in a favourable way, that is to say, it allows for the application of the most favourable legislation, even if such interpretation leads to the non-implementation of the NYC leaving room for the application of the most favourable domestic or international law. A decision on such remedy was made on August 18, 2016.

In such decision, the SCJ revoked the June 3, 2015 ruling. By in large, one can proudly applaud the following rulings, which one hopes will definitively mark the path to be followed by the SCJ in its future decisions on recognition of foreign awards:

• The applicable law to the recognition of foreign award applications submitted after the entry into force of the Hinestrosa Law (October 12, 2012) is such law, regardless of the date on which the award was rendered. In other words, the exequatur procedure as set forth in the CCP is no longer applicable to applications of recognition of foreign awards after the entry into force of Law 1563, even though the award was rendered before such date. This justifies one’s criticism of the Poligráca ruling, which one hopes will be definitively overruled now thanks to this latest decision. The SCJ distinguishes very clearly between the arbitral proceeding ending in an award and the so-called “exequatur” procedure (the SCJ uses the word exequatur but it must be read it as “recognition”), by saying that it is impossible to consider the “exequatur” proceeding as a continuation of the arbitration proceeding. This separation allowed the Court to apply the rule contained in article 119 of Law 1563 solely to arbitration procedures and not to the recognition of foreign awards, which are very different procedures.
• The NYC is also applicable along with Law 1563, even though, accordingly to article VII (1) of the NYC, this convention must be set-aside in order to only apply the most favourable legislation, which may be either a treaty or domestic law.

Now, the SCJ has to decide, under the latest ruling, the end of the recognition procedure in the Tampico case. Fortunately, good and favourable legal basis has been set up towards international arbitration.

 

 

 

 

 

 

[1] Tampico Beverages, INC. V. Productos Naturales de la Sabana S.A. Alquería, SCJ, Civil Chamber, August 18, 2016. Displonible AQUÍ

[2] Poligráca CA v. Columbia Tecnología Ltda, SCJ, Civil Chamber, December 19, 2013. Displonible AQUÍ