MADRID/BOGOTA – On Wednesday, Telefonica (NYSE: TEF), the Spanish telecoms company, said that the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) had ordered the Colombian government to pay it $380 million as part of an arbitration process.
Colombia was also ordered to pay Telefonica’s legal fees for the dispute that started in February 2018 and compound interest at a rate of 5% as compensation of the damages caused, Telefonica said.
Telefonica said it opposed a series of measures passed by the Colombian government that resulted in Telefonica paying the amount in 2017. The measures violated a bilateral treaty protecting foreign investments signed by Spain and Colombia, Telefonica said.
The ICSID did not respond to a request for comment, though its website said the case was closed on October 2 in accordance with its arbitration rules.
A spokesperson at the Colombian finance ministry confirmed the arbitration.
In a statement, the Colombian state’s legal defense agency said it examined the possibility of appealing the decision with assistance from international law firm Wordstone Dispute Resolution.
The agency will examine whether the arbitral tribunal “exceeded its powers by ignoring the authority of (Colombia’s) Constitutional Court on matters of its jurisdiction,” among other things, the statement said.
In July, Telefonica (NYSE: TEF), which has already divested from many markets in Latin America, said it had started talks with New York-listed Millicom (NASDAQ: TIGO) to sell its stake in its Colombian unit for $400 million.
