BOGOTA – Colombia’s trade, industry and tourism minister said Wednesday that her country was prepared for an arbitration battle with Spanish multinational Gas Natural Fenosa, which has filed a complaint with a United Nations legal body over the liquidation of its Electricaribe unit.
“We’ve been preparing for this legal claim for eight months. We have the support of attorneys from an international firm that has handled international disputes,” Maria Claudia Lacouture told Blu Radio.
She was referring to the complaint Gas Natural has filed with the United Nations Commission on International Trade Law (Uncitral) demanding more than $1 billion in compensation from Colombia for its March 14 decision to liquidate Electricaribe.
The minister said the move by the Superintendency of Residential Public Services (SSP), which temporarily took control of the electricity distribution and commercialization company’s assets and subsequently liquidated it due to deficient service in seven Caribbean provinces, did not amount to expropriation, as the Spanish company has argued in its complaint.
The government’s action was aimed at guaranteeing electricity service to inhabitants of that region, Lacouture said.
Gas Natural, a Barcelona-based utility company, took an 85 percent stake in Electricaribe in 2009, with the Colombian government owning the remaining interest in the company.
In November, Electricaribe and the government failed to agree on a capitalization plan for the utility, which has cash-flow problems due to the high number of customers who are past due on their accounts and people illegally tapping into power lines.
After four months of fruitless negotiations following the temporary seizure of the company’s assets on Nov. 15, the SSP ordered the liquidation of Electricaribe on March 14 to repay creditors.
As of Sept. 30, 2016, Electricaribe’s past-due accounts totaled 4.05 trillion pesos (about $1.37 billion).
That company serves 2.5 million customers in the provinces of Atlantico, Bolivar, Cesar, Cordoba, La Guajira, Magdalena and Sucre.