mediating corporate governance disputes? paris- february 12, 2007
TRANSCRIPT
CAC
• Created by the Chamber of Commerce in Bogota, in 1983, which was the first arbitration and conciliation centre in Colombia.
• Oriented to provide services concerning dispute resolution and management to the common and educational business community, by the effective application of Alternative Methods for Dispute Resolution.
FUNCTIONS
CAC functions are consist in:
– Dispute resolution
– Formation and training in dispute management
SERVICES
According to its functions, CAC supplies the following procedures:
• Dispute resolution:
ArbitrationConciliationMediationAmicable Compoundement Specialist's report
SERVICES
• Formation and training in dispute management:
Formation and training programs
Alternative Methods for Dispute Resolution in relation to an educational field
Community programs
Consulting and investigation
CAC LISTS
• List of Arbitrators :
CAC has two lists of arbitrators ( A y B), composed by a total of 353 arbitrators, each with one or two occupational specialties in various fields for example (among others):
Administrative law Civil Law Mercantile Law Electronic commerce
CAC LISTS
Energy law Public finance law Labor relations law Environment law Intellectual property Insurance and Reinsurance Telecommunications
CAC LISTS
• List of conciliators:
CAC has a list of conciliators composed by 71 conciliators with the following occupational specialties:
Mercantile law Civil law Family law
1999 2000 2001 2002 2003 2004 2005 2006
172
203
217 201 191
196
225 219
0
50
100
150
200
250
CAC arbitation 1999 - 2006
1999
2000
2001
2002
2003
2004
2005
2006
172 203 217 201 191 196 225 219
1999 2000 2001 2002 2003 2004 2005 2006
CAC ARBITRATION ISSUES 1999 - 2006
Administrative 32%
Civil 21%
Mercantile 46%
Labor-related 1%
Administrative Civil Mercantile Labor-related
2001 2002 2003 2004 2005 2006675
1194
1360
1638
3197
5732
0
1000
2000
3000
4000
5000
6000
CAC CONCILIATIONS IN LAW 2001 - 2006
2001
2002
2003
2004
2005
2006
675 1194 1360 1638 3197 5732
2001 2002 2003 2004 2005 2006
2001 2002 2003 2004 2005 2006279
575
1417
3884
6669
7664
0
1000
2000
3000
4000
5000
6000
7000
8000
CONCILIATIONS IN EQUITY 2001 - 2006
2001
2002
2003
2004
2005
2006
279 575 1417 3884 6669 7664
2001 2002 2003 2004 2005 2006
2002 2003 2004 2005 2006526
1490
589
3161
4189
0
500
1000
1500
2000
2500
3000
3500
4000
4500
CONCILIATIONS IN EDUCATIONAL MATTERS 2002 - 2006
2002
2003
2004
2005
2006
526 1490 589 3161 4189
2002 2003 2004 2005 2006
2002 2003 2004 2005 20062295
4267
6111
13027
17585
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
CAC CONCILIATIONS 2002 - 2006
2002
2003
2004
2005
2006
2295 4267 6111 13027 17585
2002 2003 2004 2005 2006
COMPANIES AND USE OF ALTERNATIVE METHODS FOR
DISPUTE RESOLUTION
In Corporate Governance Disputes
And its impact on investments
COMPANIES
• Colombian businessmen have not ignored the use and application of Good Governance methods within their companies.
• With each day, more and more companies have adopted Good Governance Codes. According to data provided by the Colombian Financial Superintendence, 105 companies have adopted these codes up until the current date.
• Now a days there is a real and effective awareness regarding the importance of a Good Governance within the companies.
ALTERNATIVE METHODS FOR DISPUTE RESOLUTION AND GOOD GOVERNANCE
CONFLICTS
• Colombian businessmen use Alternative Methods for Dispute Resolutions for associative dispute resolution purposes.
• Little by little, the incorporation of arbitration clauses has increased in order to resolve disputes caused by Corporate Governance Codes. Even some of these clauses use figures such as a conciliation or an amicable compoundment.
ARBITRATION CLAUSES STUDIES WITHIN CORPORATE GOVERNANCE CODES
• 97 companies that have adopted a Good Governance Code have been analyzed.
• 52 of the 97 have a dispute resolution clause using Alternative Methods for Dispute Resolution , and 45 do not.
• Arbitration is currently the most used mechanism, followed by amicable compoundment and conciliation.
USED MECANISMS
Arbitration 77%
Amicable Compoundment/
Arbitration 8%
Amicable Compoundment/
Conciliation / Arbitration 15%
Arbitration Amicable compoundment Amicable Compoundment/ Arbitration
LINKED PEOPLE TO THE CONFLICT RESOLUTION CLAUSES
associates / associations 68%
high employees 6%
third parties 2% administrators 12%
Investors 12%
associates / associations Investors administrators high employees third parties
IMPACT ON INVESTMENTS
• Colombian Businessmen are more and more aware of the importance and significance for investors of the adoption of Good Governance Codes that incorporate Alternative Methods in Dispute Resolution in order to resolve disputes that arise from these codes.
• In order to invest, investors always analyze the way in which companies resolve their disputes.
• It is a positive impact, for investors, to be able to make use of such mechanisms in order to resolve Good Governance disputes, efficiently, effectively and in a specialized matter.
OUTLOOK
• Traditionally, in the Colombian system, Corporate Governance dispute resolution has had court rulings or administrative resolutions.
Code of Commerce Art. 194 : Establishes that challenge acts against decisions made by an assembly or by a board of directors must be carried out before a judge, even when a arbitration clause has been agreed upon.
Control entity intervention. Finance and Corporate Superintendence. Which has not only administrative matters Ex. Art. 82 del Code of Commerce. Numerals: 6, 22 a, d, 27; but also judicial matters. Ex. Art. 137 Statute 446, 1998.
OUTLOOK
• Nevertheless, the use of alternative methods in dispute resolution has increased significantly not only by judges but also by the superintendence.
Judge's conciliation function.
Superintendence's conciliation function Art. 229 of Statute 222, 1995.
OUTLOOK
• Practically every association in Colombia has incorporated in its by-laws, arbitration clauses in order to resolve any arising disputes between associates, or even between the associates and the association.
• GLINSKI Vs. BANCOLOMBIA CASE. Typical case of Corporate Governance. Rare in the world.
OUTLOOK
• GLINSKI Vs. BANCOLOMBIA CASE. Typical case of Corporate Governance.
The existence of an arbitration clause in the by-laws of an association, has allowed minority associates to make use of an arbitration board against majority associates and fellow administrator associates, using a class act.
The class act has had a jurisprudential support: Supreme Court of Justice judgment May 11, 2001 of the civil law division of an appellate court, with final judge Carlos Ignacio Jaramillo.
CAC OUTLOOK
• During the year of 2006, CAC carried out two Corporate Governance arbitrations.
• Between December 2005 and December 2006, 18 arbitrations concerning Corporate dispute have been dealt with. (Disputes between associates/ between administrators and associates).
OUTLOOK
• According to the previous statements and graphics, Colombia has shown a significant increase in the use of direct conciliation for corporate matters. Even Colombian law states the obligation to carry out a conciliation in the initial phase of arbitral procedures.
OUTLOOK
• According to the previous outlook, it is possible to state the incipient but increasing Colombian growth and development in Alternative Methods for Dispute Resolution in Corporate Governance issues.
• This has imposed the necessity to have conciliators and arbiters specialized in Corporate Governance.
• In the biannual revision of the Arbitral Board's lists, we shall accomplish this effort.