Originially from: World Arbitration and Mediation Review (WAMR)

Latin American Commercial Arbitration: The Colombian Approach
by Erika P. Schultz
Introduction
In the last several years, Latin American governments have recognized
that the adoption of arbitration rules to resolve disputes that arise between
Latin American parties and foreign investors is critical to a nation's ability
to attract foreign investment. The promulgation of modern legislation
supporting arbitration offers domestic and international investors a sense
of juridical security in the event of a business or transnational conflict. In
addition, the ratification of treaties on international commercial arbitration
by Latin American governments confirms their movement away from an
exclusive reliance on domestic rules, which usually did not offer the
foreign investor a level playing field.

I. The Development of International
Commercial Arbitration in Latin America

International contracts frequently provide for the resolution of disputes
by binding arbitration. In Latin American nations, international arbitration
has been slow to gain acceptance. Many countries in the region continue
to adhere to the Calvo Doctrine, which is generally hostile to international
arbitration. The Calvo Doctrine received its name from the work of the
Nineteenth Century Argentine diplomat and legal scholar, Carlos Calvo.
Two basic principles (nonintervention and the absolute equality of
foreigners and nationals) constitute the core of the doctrine: "First, that
sovereign states, being free and independent, enjoy the right, on the basis
of equality, to freedom from interference of any sort by other states,
whether it be by force or diplomacy. Second, aliens are not entitled to
rights and privileges not accorded to nationals, and therefore they may
seek redress for grievances only before local authorities."

The majority of states in the international community, however, did
not recognize the Calvo Doctrine. This rejection of the Calvo Doctrine