Quadrant Damages Expert Testifies in Colombia Cellular Telecommunications Arbitration.

Quadrant’s expert, Dr. Daniel Flores, was retained by the Republic of Colombia (“Respondent”) as a quantum expert in a telecommunications arbitration initiated by América Móvil SAB DE CV. (“Claimant”) under the 1994 Mexico-Colombia Free Trade Agreement (“FTA”) and the ICSID rules (ICSID Case No. ARB(AF)/16/5).  This dispute arose from the reversion of assets to Colombia at the expiration of a concession agreement held by América Móvil.  

During the 1990’s Colombia liberalized its domestic cellular telecommunications market and awarded a cellular telecommunications concession to COMCEL, a company jointly held by public and private entities.  Subsequently, in 2002, Claimant acquired COMCEL which held a concession agreement for the operation of certain telecommunications assets and services in Colombia.  In 2013, COMCEL sought to renew its concession agreement with the Ministry of Information Technologies and Communications (“MinTIC”).  As part of the concession renewal, MinTIC required a payment in lieu of the reversion of assets to Colombia that was to occur at the completion of the concession.  After a two-year negotiation, MinTIC initiated a domestic arbitration in Colombia.  The tribunal involved ordered COMCEL to pay MinTIC approximately US$ 1.1 billion plus interest, which COMCEL paid.  Subsequently, Claimant alleged in this ICSID arbitration that Colombia violated its rights under the FTA and claimed damages in relation to the payment COMCEL made to MinTIC, plus interest .

As part of his testimony, Dr. Flores analyzed the profitability of COMCEL with and without the payment of the domestic award, as well as the returns generated by the Claimant through its investment in COMCEL. Dr. Flores also provided an analysis of the appropriate rate of interest, should the Tribunal decide to award compensation.

The Tribunal, (President: Prof. Luca G. Radicati di Brozolo; Co-arbitrators: Mr. José A. Martínez de Hoz and Mr. Rodrigo Oreamuno), in a majority opinion ruled that Respondent did not breach the FTA, rejecting all claims.

Respondent was represented by counsel who were then at Dechert LLP and are now at Wordstone Dispute Resolution.  Dr. Flores was supported by a Quadrant team that included Ryan McCann, José Díaz Barriga and Tomás Arocha Silva.

Sources: ICSIDAward