The International Centre for Settlement of Investment Disputes (Ciadi) has ordered Colombia to pay Telefónica over 500 million euros immediately for a dispute over mobile networks dating back to 1994. The ruling confirms a 2024 award and lifts the suspension after the government failed to provide a bank guarantee. The payment covers principal, interest and legal costs.
The Ciadi ad hoc committee has dismissed Colombia's suspension request, requiring immediate payment of 379.8 million dollars principal plus 5% interest from 2018, totaling about 153 million euros, and legal costs. Process sources say the National Agency for Legal Defense of the State (ANDJE) failed to provide the required guarantee in the last 30 days due to 2026 budget commitments.
The dispute stems from 1994 mobile telephony contracts with an asset reversion clause, enforced by the Comptroller General in 2013 despite later laws. In 2017, a national arbitration ordered Coltel, Telefónica's subsidiary, to pay around 530 million dollars at the time. Telefónica appealed to Ciadi in 2018, claiming violation of the 2005 Colombia-Spain investment agreement requiring fair and equitable treatment.
The initial November 2024 award favored the company, and now President Gustavo Petro's government will exhaust appeals, with an annulment hearing in Paris on June 3 and 4. ANDJE stated: “it will continue firmly defending the nation's interests and exhaust all available legal resources to suspend the award's execution.” Telefónica, which sold its Coltel stake to Millicom in February, will receive the payment but declined to comment.
This case contrasts with Claro's in 2021, where Ciadi ruled for Colombia due to a less protective treaty with Mexico. Petro has proposed exiting Ciadi for harming sovereignty, amid risks of 52 trillion pesos in disputes.
