Grupo Energía Bogotá S.A. E.S.P. and Transportadora de Energía de Centroamérica S.A. v. Republic of Guatemala

At a glance

Parties

Grupo Energía Bogotá S.A. E.S.P. (Colombia) and Transportadora de Energía de Centroamérica S.A. (TRECSA, Guatemala) v. Republic of Guatemala

Case no.

ICSID Case No. ARB/20/48 (consolidated with ICSID Case No. ARB/21/59)

Forum and rules

ICSID Convention; ICSID Arbitration Rules 2006; place of proceeding Washington D.C.

Treaty

Free Trade Agreement between Colombia and El Salvador, Guatemala and Honduras (in force between Colombia and Guatemala on 12 November 2009), Chapter 12

Tribunal

Eduardo Siqueiros (President), Alexis Mourre, Ricardo Ramírez

Sector

Electricity transmission (PET-01-2009 transmission project)

Outcome

Decision on Preliminary Objections (24 November 2023): the umbrella-clause objection was upheld; the fork-in-the-road and exhaustion objections were rejected; the objections on contract claims, Constitutional Court conduct and time-bar were joined to the merits.

Amount

Guatemala said the claimants sought USD 403 million (without interest). Costs claimed for this phase: Guatemala USD 1,621,606.12; the claimants USD 1,150,232.17, COP 25,000,831 and Q 11,168.77. The costs decision was deferred.

The dispute

TRECSA, a Guatemalan company, and its Colombian investor Grupo Energía Bogotá (GEB) built the PET-01-2009 electricity transmission project. They did so under a contract that TRECSA signed with the Ministry of Energy and Mines (MEM) on 22 February 2010, after a 2009 public tender. The claimants alleged that the project was destroyed by many State measures. They cited permit refusals and revocations by 36 municipalities. They cited the Constitutional Court's ruling of 19 December 2018 that struck down Acuerdo Gubernativo No. 145-2013, which had declared the project a matter of national urgency. They also cited MEM and CNEE administrative acts: new terms imposed by Resolution 2017-1515, a breach finding in Resolution 770-2018, refusals to adjust the Annual Canon, late payment, failure to hold indigenous consultations, and the cancellation of compensation for excluded works by Resolution 214-2021. Their claims rested on fair and equitable treatment, full protection and security, non-discrimination, expropriation, and umbrella clauses imported through the MFN clause. Guatemala raised preliminary objections under Articles 12.23.5 and 12.23.6 of the Treaty. It argued that the claims were purely contractual, that umbrella clauses could not be imported, that court conduct other than denial of justice was outside the Treaty, that many claims were time-barred, that the fork-in-the-road clause applied, and that administrative remedies had not been exhausted.

Key holdings

1. Article 12.23.5 obliges the Tribunal to decide preliminary objections quickly before the merits, but not to resolve them finally. The Tribunal may uphold them, reject them, or join them to the merits where they are bound up with disputed facts or law. ¶¶ 265–269
2. The objection that the claims against MEM conduct are purely contractual, and the objection to claims against the Constitutional Court other than denial of justice, are joined to the merits. Jurisdiction exists over conduct of State entities not bound by the contract, and GEB is not bound by the contract's forum clause. Whether MEM acted as a sovereign rather than as a contracting party requires evidence. ¶¶ 293–310
3. Umbrella-clause objection upheld. Article 12.12.2 and Guatemala's Annex III reservation exclude MFN treatment granted under treaties in force or signed before the Treaty took effect. The ten BITs relied on all predate 12 November 2009, so no umbrella clause can be imported through Article 12.6, and the Tribunal lacks jurisdiction over those claims. ¶¶ 314–318
4. The three-year limitation rule in Article 12.22.1 goes to admissibility, not jurisdiction. The critical dates are 9 October 2017 for Request No. 1 and 12 October 2018 for Request No. 2. When the claimants knew of each breach and loss cannot be decided without fuller evidence, so the objection is joined to the merits. ¶¶ 321–338
5. Fork-in-the-road objection rejected. Read with Article 12.18.7, Article 12.22.2 covers only local proceedings that allege breaches of Section A of Chapter 12. TRECSA's local administrative challenges to the Santa Lucía Milpas Altas and Antigua Guatemala municipal acts therefore do not bar the Treaty claims. ¶¶ 344–351
6. Exhaustion objection rejected. Article 12.18.1 requires exhaustion of administrative remedies only where Guatemalan law mandatorily demands it. The provisions Guatemala cited merely make remedies available. ¶¶ 355–360
7. The decision on costs under Article 12.23.7 is deferred to the merits phase, because three objections were joined to the merits. ¶ 367; ¶ 368(6)

Procedural history

1. 9 October 2020Request for Arbitration No. 1 filed; ICSID registers it as ARB/20/48 on 3 November 2020.
2. 12 October 2021Request for Arbitration No. 2 filed; ICSID registers it as ARB/21/59 on 9 December 2021.
3. 10 December 2021The claimants request consolidation under Article 12.28(2) of the Treaty; Guatemala opposes.
4. 13 July 2022The consolidation tribunal is constituted.
5. 27 September 2022Procedural Order No. 1 – Consolidation Order: by agreement of the parties, all claims are consolidated under ARB/20/48 and ARB/21/59 is discontinued.
6. 25 February 2023The claimants file their Memorial.
7. 10 April 2023Guatemala files its Preliminary Objections; on 12 April 2023 the merits are suspended.
8. 26 September 2023Hearing on the preliminary objections at ICSID in Washington D.C.
9. 24 November 2023Decision on Preliminary Objections: one objection upheld, two rejected, three joined to the merits.

Tribunal, counsel and experts

Decided by

• Eduardo Siqueiros T. President — appointed by the parties jointly
• Alexis Mourre Co-arbitrator — appointed by the claimant
• Ricardo Ramírez Co-arbitrator — appointed by the respondent

For the claimant

White & Case LLP

For the respondent

Dechert LLP · Ministerio de Economía, Dirección de Administración del Comercio Exterior · Procuraduría General de la Nación

Experts

Rodolfo Alegría Toruño (claimant)

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Keywords

• Colombia–Central America FTA
• electricity transmission
• TRECSA
• PET-01-2009
• umbrella clause
• most-favoured-nation clause
• MFN reservation
• contract claims vs treaty claims
• puissance publique
• fork-in-the-road
• triple identity test
• exhaustion of administrative remedies
• limitation period
• joinder to merits
• expedited preliminary objections
• denial of justice
• consolidation
• Constitutional Court

Summary generated with AI from the published documents — refer to the award for the authoritative text.