Executive Summary

President Petro has signaled his intent for Colombia to “withdraw from the international investment arbitration system because the courts end up resolving disputes in favor of private entities.” The statement is politically significant but has no legal effect.

The premise that ISDS tribunals favor private parties is not borne out by Colombia’s own recent record, which includes claimant defeats in Red Eagle v Colombia,¹ Seda & ors v Colombia,² and Eco Oro v Colombia.³

Mr. Petro’s stated intent is also vague: it may refer to denouncing the ICSID Convention—a path that other states have taken and later reversed—or to terminating the country’s investment treaties. Either way, the change would not be immediate: the ICSID Convention and virtually all investment treaties contain sunset clauses that preserve investor protections for a defined period after a state communicates its intent to withdraw.

Against this backdrop of uncertainty, foreign investors in Colombia should assess their existing treaty protections and the timing of any claims they may have against the State. This alert addresses both.

I. Background: Colombia’s Investment Treaty Framework

Investment treaties typically provide a core set of substantive protections, including fair and equitable treatment, full protection and security, most-favored nation and national treatment, and protection against unlawful expropriation without compensation. The exact scope of each protection is language-dependent and can vary significantly between treaties, even where the phrasing appears similar.

These substantive protections are given practical force by a procedural one: access to international arbitration, independent of the host State’s domestic courts, to enforce treaty rights directly.

Colombia has been a Contracting State to the ICSID Convention since 1997. Beginning in 2005, it significantly expanded its network of investment agreements providing for investor–State dispute settlement (“ISDS”), concluding 13 bilateral investment treaties (“BITs”) and 8 free trade agreements (“FTAs)”.⁴ Notable examples include:

• the Colombia - Spain BIT (2005), which came into force in 2007;⁵
• the Colombia - United States Trade Promotion Agreement (2006), which came into force in 2012;⁶
• the Canada - Colombia FTA (2008), which came into force in 2011;⁷ and
• the Colombia - UK BIT (2010), which came into force in 2014.⁸

Investment protections are most consequential in capital-intensive sectors where licensing, expropriation, and regulatory risks are acute—precisely the conditions that characterize extractive industries.⁹ That is directly relevant to Colombia, which remains substantially dependent on mining and the production of hydrocarbons.¹⁰

The point is reinforced by recent regional developments. Bolivia is reportedly considering constitutional reforms to allow investor-State arbitration in the hydrocarbon sector.¹¹ Venezuela has moved further still. Its Organic Law on Hydrocarbons, enacted in January 2026, permits alternative dispute resolution—including arbitration—reversing a framework that had mandated exclusive resolution before Venezuelan courts. Its new Organic Mining Law, now on acting President Rodríguez's desk for enactment, does the same for the mining sector. Both reflect a recognition that access to neutral dispute resolution is itself an investment-enabling feature.

II. The Impact of Treaty Denunciation

A. ICSID Convention mechanics

Under Article 71 of the ICSID Convention, a Contracting State may denounce the Convention by written notice to the depositary. Denunciation takes effect six months after receipt.

Article 72 then provides that denunciation “shall not affect” rights and obligations arising out of consent to ICSID jurisdiction given before the notice was received. The interpretative question that remains unsettled is what “consent” means in this context.

Two competing readings have emerged from the Venezuela denunciation cases. The narrower view, adopted in Fábrica de Vidrios Los Andes v Venezuela,¹² requires perfected consent—accepted by both the State and the investor—before the denunciation notice is received. A claimant whose request postdates the notice cannot rely on Article 72. The broader view, adopted in, among others, Venoklim,¹³ Rusoro Mining,¹⁴ and Blue Bank¹⁵ holds that consent can be perfected at any point within the six-month window. Those tribunals reasoned that cutting off claims upon receipt of the notice—rather than at the end of the six-month period—would deprive Article 71 of its purpose.

The practical implication is clear: if Colombia deposits a denunciation notice, the six-month window should be treated as a hard deadline. Waiting on the theory that the broader reading will prevail is a risk without upside.

B. BITs and FTAs survive ICSID denunciation

Denouncing the ICSID Convention would not terminate Colombia’s BITs or FTAs. Those treaties remain in force on their own terms.

ICSID is unlikely to retain jurisdiction beyond the notice period, but most investment treaties provide for alternatives—e.g., UNCITRAL or the ICSID Additional Facility—whose availability will depend on treaty language and, for the Additional Facility, on whether Colombia retains the relevant status.

To eliminate treaty-based ISDS access altogether, Colombia would need to terminate or renegotiate each treaty separately, triggering notification and waiting periods and, in most cases, sunset clauses that preserve protections for existing investments for a further period—often a decade or more.

The regional precedent is instructive. Bolivia, Ecuador, and Venezuela each denounced the ICSID Convention between 2007 and 2012.¹⁶ None stopped the flow of investor claims. From their respective withdrawal dates until the end of 2023, Bolivia faced 16 publicly known claims, Ecuador 15, and Venezuela 24. Withdrawal from ICSID changes the forum, not the exposure.

C. Near-term assessment

No formal denunciation has occurred. The March 2026 statement is a political declaration, not a legal event.

That said, the prospect of withdrawal—and its associated uncertainty—will register with prospective investors. The statement signals a potential recalibration of Colombia’s approach to investor-State arbitration, with attendant effects on perceptions of risk and predictability.

Nor is the formal exit the only mechanism for narrowing investor protections. In January 2025, the U.S. and Colombia issued a binding Free Trade Commission decision interpreting and narrowing the investment chapter of the U.S.–Colombia FTA across core protections—treatment standards, expropriation, and claims submission.¹⁷

One countervailing data point: at the beginning of March this year, Honduras reversed its 2024 denunciation and rejoined the ICSID Convention, a reminder that exit decisions are reversible where economic and diplomatic incentives shift.

III. Practical guidance for investors

Investors with existing or planned exposure in Colombia should treat the March 2026 announcement as a risk-management prompt, not a trigger for immediate panic.

It would be advisable to consider the following steps:

1. Audit your treaty position

Map the investment to the relevant treaty (or treaties) and confirm:

• investor and investment definitions;
• available arbitration fora (e.g., ICSID, ICSID Additional Facility, UNCITRAL); and
• procedural preconditions (notice requirements, cooling-off periods, forks-in-the-road, waiver provisions).

Because treaty drafting varies materially, two investors in the same sector can face vastly different jurisdictional routes and leverage depending on nationality, structuring and the investment vehicle used.

2. Manage local proceedings with treaty timing in mind

Many treaties impose mandatory cooling-off periods and may include conditions that interact with domestic proceedings. Investors should therefore track Colombian administrative or judicial steps against treaty timelines to avoid inadvertently undermining jurisdiction or admissibility.

3. If denunciation occurs, move early

There is no formal deadline today because no notice has been deposited. However, if Colombia were to submit a formal notice of denunciation, investors with crystallized or rapidly crystallizing disputes should seek counsel immediately. Given the unresolved debate around Articles 71 and 72, the prudent course in many scenarios is to perfect consent before the denunciation notice date, where treaty structure permits.

4. Monitor closely: politics and law move on different clocks

Latin American experience shows the gap between political signaling and formal legal action can be meaningful and protracted. Investors should watch for:

• an ICSID denunciation notice;
• announcements of treaty termination or renegotiation; and
• further interpretive instruments limiting substantive standards or ISDS pathways, as illustrated by the U.S.–Colombia FTC decision.

IV. Conclusion

Mr. Petro’s March 2026 statement is part of a broader re-examination of ISDS. But the legal architecture of investment protection is more resilient than headline rhetoric suggests: even if denunciation occurs, treaty-based dispute mechanisms frequently remain available via non‑ICSID routes, and treaty protections often persist through sunset and preservation clauses.

Treaty analysis belongs in core governance. Investment structuring, record-keeping, and dispute management should all be undertaken with a close eye on treaty conditions, available fora, and timing risk.

^{1 Red Eagle Exploration Limited v. Republic of Colombia, ICSID Case No. ARB/18/1}

^{2 Angel Samuel Seda and others v. Republic of Colombia, ICSID Case No. ARB/19/6}

^{3 Eco Oro Minerals Corp. v. Republic of Colombia, ICSID Case No. ARB/16/41}

^{4 Details of these agreements can be found at https://investmentpolicy.unctad.org/international-investment-agreements/countries/45/colombia}

^{5 Details available at: https://investmentpolicy.unctad.org/international-investment-agreements/treaties/bilateral-investment-treaties/1007/colombia---spain-bit-2005-. This has formed the basis for multiple high-profile investor claims, including in the infrastructure and energy space.}

^{6 Details available at https://investmentpolicy.unctad.org/international-investment-agreements/treaties/treaties-with-investment-provisions/3388/colombia---united-states-tpa-2006-. This treaty included Chapter Ten investment protections and ISDS mechanism.}

^{7 Details available at: https://investmentpolicy.unctad.org/international-investment-agreements/treaties/treaties-with-investment-provisions/3246/canada---colombia-fta-2008-.}

^{8 https://investmentpolicy.unctad.org/international-investment-agreements/treaties/bilateral-investment-treaties/1010/colombia---united-kingdom-bit-2010-. Often referenced in discussions of UK-origin capital and treaty protections.}

^{9 See for example: Ahmad, Liebman & Wickramarachi Disentangling the Effects of Investor-State Dispute Settlement Provisions on Foreign Direct Investment (November 2022). Accessible here.}

^{10 Although recent efforts have encouraged diversification of foreign investment, 2024 figures still show that at least 25% of foreign direct investment in Colombia related to mining and energy. See: Ministerio de Comercio, Industria y Turismo “Noticia de Comercio: Inversión extranjera hacia sectores no mineros creció 3,4 % en 2024” (26 March 2025).}

^{11 Reuters “Bolivia pledges to honor energy, lithium deals to reassure investors” (19 January 2026). Accessible at: https://www.reuters.com/sustainability/boards-policy-regulation/bolivia-pledges-honor-energy-lithium-deals-reassure-investors-2026-01-19/}

^{12 Fábrica de Vidrios Los Andes, C.A. and Owens-Illinois de Venezuela, C.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/21}

^{13 Venoklim Holding B.V. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/22}

^{14 Rusoro Mining Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/12/5}

^{15 Blue Bank International & Trust Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/20}

^{16 Bolivia’s withdrawal from ICSID took effect in 2007, Ecuador’s in 2010, and Venezuela’s in 2012.}

^{17 Available at: https://ustr.gov/sites/default/files/files/Free%20Trade%20Commission%20Decision%20No9%20final.pdf}