Originally from World Arbitration and Mediation Review, (WAMR)

On July 12, 2012, the Colombian Congress enacted Law 1563 of 2012, better known as Statute of National and International Arbitration (“Statute”).   Article 40 of the Statute created a special means for challenging the enforcement of an arbitral award.   Article 40, known as Extraordinary Motion of Annulment (“Motion”), provides a cause of action that allows a party to an arbitral proceeding to ask the judicial branch to annul an arbitral award based on the specific grounds the Statute provides.    Article 41 of the Statute establishes an exhaustive list of grounds for challenging an award, among which is “[t]he expiration of the cause of action,  lacking of jurisdiction or competence.”   The judicial authority shall decide the motion challenging the award within three months from the filing date.   The filing of the motion does not suspend the enforcement of the award, except when the losing party is a public entity, and the entity requests the court to suspend the enforcement of the award while the appeal is pending.   The case reported in this commentary is a decision where the Colombian Council of State (“Council of State”), exercised its authority under the Statute to annul an arbitral award against a public entity because the statute of limitations to initiate arbitration had expired.  The Council of State is the highest court in the Contentious Administrative Jurisdiction. The Council of State hears cases involving the activities and regulations of the public administration through the State and public entities.

II. DIGEST

A.   Relevant Facts and Procedural History

The Consorcio Doble Calzada Buenaventura  (“Consorcio”) and the Instituto Nacional de Vias Invias  (“Invias”) (collectively “Parties”) performed the Contract No 3396 (“Contract”) on December 29, 2006.

 The Consorcio, a private entity, contracted with the Colombian government through Invias for the “adjustment and complementation to the studies and designs (including environmental studies and obtaining environmental license) and construction of the double road of the highway Buenaventura – Loboguerrero, Sector Altos de Zaragosa (PR29 + 00) – Triana (PR39 + 700) according to The Bidding Terms and Conditions of the Bid SRN 325 of 2006, the CONTRACTOR’s proposal, and under the conditions stipulated in the present contract.”