America Móvil to Seek Annulment of ICSID Arbitration Award

By Diego Luis Alonso Massa, 11 May 2021

In an official statement issued on 7 May 2021, América Móvil (AMX), owned by Mexican billionaire Carlos Slim, announced it was considering all remedies available to it following an ICSID Tribunal award ordering it to pay Colombia US$2.2 million in arbitration costs. This could involve seeking the award’s annulment before the federal court of the District of Columbia (the seat of the arbitration), local news reports. 

In its award, the ICSID Tribunal ruled against AMX that measures taken by Colombia, regarding concessions terminated by its subsidiary Comunicación Celular, S.A. ("COMCEL") in 2013, amounted to an expropriation in violation of the Colombia – Mexico Free Trade Agreement

In this regard, the majority of the Tribunal – composed of Prof. Radicati di Brozolo and Dr. Rodrigo Oreamuno – held that even though the non-reversion of the assets could qualify as an unlawful expropriation under international law (even if it did not affect the investment in its entirety), two Colombian judicial decisions had unquestionably established that such right of non-reversion did not exist under Colombian law. Therefore, Columbia’s measures could not amount to expropriation.

This majority consequently ordered AMX to pay 50% of Colombia's fees and costs and 50% of the arbitration costs paid by Colombia together with its own fees and costs.

Before ruling against AMX on the merits, however, the ICSID Tribunal also rejected several procedural objections raised by Columbia. These objections, related to the tribunal’s jurisdiction under the Colombia – Mexico FTA as well as the nature of AMX’s claim. 

In this regard, Colombia unsuccessfully asserted:

  • that AMX’s claim was for breach of legitimate expectations rather than for expropriation, something not permitted under the TLC. 
  • that AMX’s claim was not a matter of international law but rather required the Tribunal to sit as an appellate court over issues on which the Colombian courts had already ruled. 
  • that AMX’s claim actually concerned the application of Colombian law and the enforcement of contractual obligations of the Colombian State arising out of the Concession Contracts. 
  • that AMX’s claim failed to meet the Treaty’s dispute notice requirements because it did not indicate the amount of damages allegedly sustained such that Colombia’s consent to arbitration was never perfected.

The Tribunal, however, determined that AMX’s claim was undoubtedly an international law claim, focused on the expropriatory nature of Colombia's sovereign acts, and therefore within its ratione materiae. The Tribunal also found that AMX’s failure to comply with the Treaty’s dispute notice requirements was irrelevant to the Tribunal’s jurisdiction as it was not required to perfect Colombia's consent.

According to Reuters, AMX satisfied a Colombian arbitration award that ordered it to pay US$1.08 billion for its investment in COMCEL in 2017.

The full ICSID Tribunal comprised  José A. Martinez de Hoz (Arbitrator), Dr. Rodrigo Oreamuno (Arbitrator) and Prof. Luca G. Radicati di Brozolo (President).