América Móvil ordered to pay $2.2 million in costs to Colombia
América Móvil has been ordered to pay US$2.2 million following arbitration of its dispute with Colombia.
The World Bank's International Centre for Settlement of Investor Disputes (ICSID) ruled that measures taken by Colombia's government in 2013 "did not represent an expropriation" of America Movil's investments in its subsidiary, Comcel.
A market statement from América Móvil (AMX) read: "The ICSID Tribunal held that certain measures adopted by Colombia in relation with the concessions terminated in 2013 by Comcel subsidiary of AMX, did not represent an expropriation of AMX’s investments in Comcel in violation of the FTA, and ordered AMX to pay approximately U$2.2 million corresponding to costs of the arbitration proceeding."
Further, ICSID said the measures did not contravene the free trade agreement between Mexico and Colombia.
America Movil said it is currently analysing the available legal actions against the award, "including the potential request of its annulment before the U.S. District Court of the District of Columbia (seat of the arbitration)."
Events of 2013
The case concerns Comcel (Claro), the Colombian unit of América Móvil.
In 2013, the city of Bogota, Colombia, ordered that Claro pay city-owned telco Empresa de Telecomunicaciones de Bogota (ETB) around 185 billion pesos ($97.8 million) to settle a 10-year-old lawsuit over interconnection fees.
Claro's failure to pay would give Bogota the right to seize Claro’s assets to recover the amounts owed.
Wading into the debate at the time, then Mayor of Bogota, Gustavo Petro, said: "We are going to act. We are going to seize Comcel [Claro]’s networks, its assets, its buildings… and give them back to Bogota… They are going to say ‘there goes Chavez the expropriator'… No sir, give us the money back. It belongs to the people of Bogota.”
The telco has maintained that Comcel was "illegally expropriated" by Colombia, however ICSID has not backed these claims.
Arbitration was initiated in 2016 with America Movil claiming Comcel was prevented from freely using or selling its wireless telecommunications assets after the termination of its concession contracts. The following year, America Movil paid $1.1 billion to Colombia in relation to concession agreements.
This challenged the Colombian Constitutional Court’s decision of 2013 ordering the reversal of certain telecommunication assets to state control on a concession’s expiry or termination and "the subsequent refusal of the government to recognise Comcel’s property rights over those assets following the contract termination".