A Canadian energy company has won an award in a Bogotá arbitration against a local gas distributor over the expansion of a pipeline on Colombia‘s Caribbean coast.

As reported by Colombian media, a tribunal at the Arbitration and Conciliation Centre of the Chamber of Commerce of Bogotá (CCA-CCB) issued an award on 21 August ordering local gas transporter Promigas to pay US$14 million to a subsidiary of Toronto-listed Canacol Energy.

The tribunal ordered Promigas to reimburse 36.7 billion Colombian pesos (US$8.9 million) in additional fees that Canacol had paid under the contract. It also granted 21.7 billion pesos (US$5.3 million) in interest. The award is available here.

The all-Colombian tribunal was chaired by academic Roberto Aguilar Díaz and included practitioners Carlos Darío Barrera Tapia and Santiago Talero Rueda.

Canacol was represented by Philippi Prietocarrizosa Ferrero DU & Uría in Bogotá while Promigas used Colombian firms Vall de Rutén & Jubiz and X100Legal.

In 2015, a Colombian subsidiary of Canacol signed a “ship or pay” gas transportation contract, which included provisions for investment in the expansion of the Promigas pipeline to be paid for with an additional premium.

Canacol says on its website it currently provides more than 50% of the gas supply on the country’s northern coastline, which includes the cities of Cartagena and Barranquilla.

Canacol’s subsidiary filed the CCA-CCB claim, seeking the return of additional fees paid to Promigas for expansion investments. It said the fees were improperly charged because they were not related to the contract. Promigas argued that the fees were part of the transport services agreed under the contract.

Promigas is reportedly evaluating possible legal action in response to the award.

In 2020, Canada’s Frontera Energy settled a pair of arbitrations with Colombian state-owned oil company Ecopetrol over terminated contracts for two the country’s key oil pipelines.

An Ecopetrol subsidiary also filed for arbitration against Canacol over termination of its contract as co-carrier on one of the pipelines. That dispute settled in 2021.

Counsel to Canacol Energy

Philippi Prietocarrizosa Ferrero DU & Uría (Colombia)

Partners Héctor Hernández, Sandra Manrique and Juan Sebastián Arias, and associates Santiago Romero and Alejandro Zapata in Bogotá