Colombia’s ICSID Threat: What Investors Need To Know

Executive Summary

President Petro has signaled his intent for Colombia to “withdraw from the international investment arbitration system because the courts end up resolving disputes in favor of private entities.” The statement is politically significant but has no legal effect.

The premise that ISDS tribunals favor private parties is not borne out by Colombia’s own recent record, which includes claimant defeats in Red Eagle v Colombia,¹ Seda & ors v Colombia,² and Eco Oro v Colombia.³

Mr. Petro’s stated intent is also vague: it may refer to denouncing the ICSID Convention—a path that other states have taken and later reversed—or to terminating the country’s investment treaties. Either way, the change would not be immediate: the ICSID Convention and virtually all investment treaties contain sunset clauses that preserve investor protections for a defined period after a state communicates its intent to withdraw.