[et_pb_section fb_built=”1″ theme_builder_area=”post_content” _builder_version=”4.27.3″ _module_preset=”default” custom_padding=”0px||0px||true|false” hover_enabled=”0″ sticky_enabled=”0″][et_pb_row _builder_version=”4.27.3″ _module_preset=”default” theme_builder_area=”post_content” width=”100%” hover_enabled=”0″ sticky_enabled=”0″][et_pb_column _builder_version=”4.27.3″ _module_preset=”default” type=”4_4″ theme_builder_area=”post_content”][et_pb_text _builder_version=”4.27.3″ _module_preset=”default” theme_builder_area=”post_content” text_font_size=”1.2em” text_line_height=”1.5em” text_orientation=”justified” hover_enabled=”0″ sticky_enabled=”0″]In a high-stakes investment arbitration involving telecommunications giant Telef\u00f3nica S.A., a tribunal recently examined Colombia\u2019s handling of reversion clauses in concession contracts. These clauses require contractors to transfer certain assets back to the state at the end of their agreements. While Colombia introduced reforms limiting reversion to radio spectrum to attract investors, the State argued that Telef\u00f3nica was excluded from these benefits because its contract predated the regulatory changes. As a result of such measures, Telef\u00f3nica was forced to pay the State the amount of US$379,804,275.55 in 2017. <\/p>\n
Telef\u00f3nica challenged this under the Colombia-Spain investment treaty, which guarantees fair and equitable treatment for investors. The tribunal found that Colombia violated this standard by treating Telef\u00f3nica differently from other operators in similar situations. It held that Colombia breached the treaty by rescinding the application of legal provisions that limited reversion to radio spectrum. By creating two investor categories\u2014one benefiting from the reforms and another excluded\u2014Colombia unfairly disadvantaged Telef\u00f3nica, despite the company\u2019s significant participation in the nation\u2019s telecommunications market.<\/p>\n
The tribunal stated that Colombia failed to comply with its obligation to grant fair and equitable treatment to Telef\u00f3nica’s investments and ordered the State to pay the amount of US$379,804,275.55, plus compound interest at a rate of 5% as compensation for the damages caused. This decision, however, is not final. Colombia has already announced it will seek to annul the award. [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"
The tribunal stated that Colombia failed to comply with its obligation to grant fair and equitable treatment to Telef\u00f3nica’s investments and ordered the State to pay.<\/p>\n","protected":false},"author":5,"featured_media":4412236,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[59,116],"tags":[],"class_list":["post-4412233","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-newsletter-en","category-litigation-and-adr"],"yoast_head":"\n