Colombia / 27 July 2011 / Colombia, Corte Suprema de Justicia (Supreme Court of Justice) / Petrotesting Colombia SA & Southeast Investment Corporation v Ross Energy S.A. / 11001-0203-000-2007-01956-00
|Colombia, Corte Suprema de Justicia (Supreme Court of Justice)
|27 July 2011
|Petrotesting Colombia SA & Southeast Investment Corporation v Ross Energy S.A.
|Applicable NYC Provisions
|II | IV | V | V(1) | V(1)(a) | V(1)(b) | V(1)(e) | V(2) | V(2)(b)
http://www.cortesuprema.gov.co (website of the Corte Suprema de Justicia)
|On 28 June 2001, the parties entered into a Consortium agreement containing an arbitration agreement providing for the American Association Arbitration (AAA) in New York. A dispute arose and on 19 June 2006, an award was rendered in favor of Petrotesting against Ross Energy. Petrotesting sought to enforce the arbitral award in Colombia pursuant to Law No. 315 of 1996, Decree No. 1818 of 1998, and the NYC. Ross Energy opposed enforcement on various grounds based on Article V NYC. It argued that the award was not properly translated, that a proceeding on the same subject matter was pending before a US Court, that the dispute was not arbitrable as it referred to rights over property located in Colombia, that the award contains decisions on matters beyond the scope of the arbitration agreement, that the award violated Colombian public policy, and that it was not properly served notice of the proceeding. The Corte Suprema de Justicia (Supreme Court) granted enforcement to the award. It first considered that the reciprocity requirement was fulfiled as both Colombia and the United States are parties to the NYC. Regarding Ross Energy's argument on translation mistakes, the Corte Suprema de Justicia, after taking into account several testimonies, considered that there was no alteration in the meaning of the award and rejected this argument. With respect to other grounds contained in Article V, the Corte Suprema de Justicia held that it was for the party opposing enforcement to prove that the grounds in Article V(1) NYC are met while the grounds of Article V(2) can be raised sua ponte by the Court. On Ross Energy's argument that a proceeding on the same subject matter as the arbitration proceeding was pending before a US Court, the Corte Suprema de Justicia considered that it was not a ground under Article V NYC. It added that the US proceeding had been dismissed by the US Court because of the existence of an arbitration agreement. The Corte Suprema de Justicia dismissed the argument. On Ross Energy's argument regarding the arbitrability of the dispute (because it concerned rights over property located in Colombia), the Corte Suprema de Justicia held that (i) it was not a ground for non enforcement under Article V NYC and (ii) the award dealt with personal rights. Regarding Ross Energy's argument that the arbitration agreement was not valid (Article V(1)(a) NYC) because Colombian law does not allow the conclusion of arbitration agreements in public contracts, the Corte Suprema de Justicia considered that the arbitration agreement was not in the public contract for oil exploitation but in the Consortium agreement and as such had been validly entered into. On Ross Energy's argument that the award violated public policy (Article V(2)(b) NYC), the Corte Suprema de Justicia noted that in private international law, public policy does not refer to the same concept as in the internal law, and the applicable concept here is international public policy, which refers to fundamental principles of the State. The Corte Suprema de Justicia considered that the agreement at stake did not involve any national interests and dismissed the argument. Regarding Ross Energy's argument that it was not properly served notice (Article V(1)(b) NYC), the Corte Suprema de Justicia noted that while it did not participate to the arbitration proceedings and was not present at the hearing, no formal requirement existed with regard to service of process and that the absence of the respondent does not in itself invalidate the proceeding. It considered that it was a ground contained in Article V(2)(b) NYC as it relates to due process. As such, the Corte Suprema de Justicia noted that the parties had been given an equal opportunity to present their defense: Ross Energy had been aware of the proceeding, it claimed it was not able to present its defense because the proceeding was in English and its financial situation did not allow it for translation but the Corte Suprema de Justicia noted that the arbitration agreement provided for English as the language of arbitration. It dismissed the argument. Regarding Ross Energy's argument that the award was rendered beyond the scope of the arbitration agreement because while the arbitration agreement was contained in the Consortium Agreement, the arbitral tribunal ruled over a dispute related to an Operation Agreement, the Corte Suprema de Justicia analyzed the abitration agreement and held that it provided for arbitration for all disputes arising out of the Consortium Agreement and operations taking place under this Consortium agreement. The Corte Suprema de Justicia dismissed the argument.
|affirmed by :
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