Reproduced from www.worldbank.org/icsid with permission of ICSID.
ANGEL SAMUEL SEDA, JTE INTERNATIONAL INVESTMENTS, LLC, JONATHAN MICHAEL FOLEY, STEPHEN JOHN BOBECK, BRIAN HASS, MONTE GLENN ADCOCK, JUSTIN TIMOTHY ENBODY, JUSTIN TATE CARUSO, AND THE BOSTON ENTERPRISES TRUST
NOTICE OF INTENT TO SUBMIT CLAIMS UNDER CHAPTER TEN OF THE UNITED STATES-COLOMBIA TRADE PROMOTION AGREEMENT
1. Pursuant to Article 10.16.2 of the United States - Colombia Trade Promotion Agreement ("TPA"), the persons and entities identified in the caption above ("Claimants") hereby submit to the Government of the Republic of Colombia ("Government" or "Colombia") this Notice of Intent to Submit Claims under Chapter Ten of the TPA ("Notice").
II. PROVISIONS OF THE TPA THAT HAVE BEEN BREACHED
6. By its conduct as explained in more detail below, the Government is responsible, through a series of on-going, separate and cumulative actions, for depriving Claimants' investments in Colombia of fair and equitable treatment in breach of Article 10.5 (Minimum Standard of Treatment) of the TPA.
7. By its conduct as explained in more detail below, the Government is responsible, through a series of on-going, separate and cumulative actions, for the illegal expropriation of Claimants' investments in Colombia in breach of Article 10.7 (Expropriation and Compensation) of the TPA.
8. Claimants' claims arise out of the destruction, by the Government of Colombia, of the investments made by Claimants in Colombia by virtue of its unlawful and abusive misapplication of Colombian law to the Claimants. These actions clearly violated Articles 10.5 and 10.7 of the TPA. The specific target of the government was a high-end, mixed-use (residential and commercial) real estate project (the "Meritage") in the area of Medellín, Colombia, under development by Mr. Seda through companies he founded and controlled.
9. The legal backdrop to the investors' claims under the TPA is the arbitrary, discriminatory and confiscatory application of Colombia's Asset Forfeiture Law ("extinction of ownership" law, Código de Extinción de Dominio or hereinafter, extinción de dominio law), the applicable version of which is Law No. 1708 of 2014. This law permits Colombian authorities to extinguish, in certain situations, ownership rights to assets where the assets are connected (as defined in the law) with illegal activity.
10. Because a misapplication of this law results in the unlawful confiscation of property, the law necessarily sets forth important safeguards to avoid causing irreparable harm to innocent investors, as was caused here. The first 14 articles of Law No. 1708 set forth the rights to be protected, and the procedures to be followed, in applying this law and in implementing relevant international law standards. The protections in Law No. 1708 include protection of "affected persons" (afectado) under the law, defined in Article 1.1 as a "person who claims to be the holder of any right over the property that is the subject of the extinction of ownership procedure, with standing to resort to the process." The law guarantees an affected person protection of fundamental rights. The law also protects property obtained in good faith (Article 3) and the right to due process (Article 5). It requires a presumption of good faith for purchasers who proceed in a diligent and prudent manner (Article 7), and the right to adversarial proceedings (Article 8). The umbrella protection is contained in Article 2 entitled "Dignity," which guarantees "the respect for human dignity" as a "limitation and basis to the extinction of ownership." In other words, the law requires a compelling basis for overcoming these presumptions and protections before the right of property ownership can be extinguished. Importantly, the presumption of good faith protects against the confiscation of assets absent clear evidence of wrongdoing.
11. All of these rights, protections and guarantees were flouted by the Colombian authorities. By its flagrant disregard of this law, the Government of Colombia illegally confiscated the Meritage property, in clear violation of its extinción de dominio law, denying Claimants their due process rights, their right to a presumption of good faith, their right to an adversarial proceeding, and ignoring their status as good faith purchasers of this property. Moreover, Colombia ignored Law No. 1708 and the international legal protections incorporated therein. These actions doomed Claimants' other valuable projects already underway in Colombia, resulting in irreparable harm to the projects and to the reputation of everyone involved in those projects, particularly, Mr. Seda, who was the project developer.
12. As discussed in below, Colombian courts have criticized the Government's actions in this process for failing to provide reasons for the confiscation and failing to adhere to a minimum standard of care in carrying out the confiscation, including never clearly identifying the scope of the property under confiscation. Notwithstanding many opportunities, no Colombian authority, in any branch of government, has provided any relief to the Claimants in this case. Colombian courts have failed to arrest, let alone reverse, this process. Moreover, instead of seeking to cure its blatant shortcomings, the Government of Colombia, in an effort to circumvent the procedures articulated under Law No. 1708, has resorted to taking improper steps designed to harass and intimidate those involved in the projects. The Government's increasing aggression makes filing of this Notice necessary not just to permit Claimants to obtain compensation for their losses, but to protect their business reputations, their ability to pursue this claim under the TPA, and, in some cases, to protect their personal safety.
VI. RELIEF SOUGHT AND APPROXIMATE AMOUNT OF DAMAGES CLAIMED
97. Claimants seeks through consultations and negotiations to receive full compensation for the losses suffered as a result of the Government's violations of the TPA.
98. In the event consultations are unsuccessful, Claimants will submit a claim in arbitration seeking compensation for damages by reason of, or arising out of, Colombia's measures that are inconsistent with its obligations under Section A of Chapter Ten of the TPA, along with interest and costs. Claimants estimate their damages to be no less than USD 250 million.
99. Claimants reserves their rights to amend or supplement this Notice of Intent.