4. Rational Dispute Resolution
4.1 Rule of Law
4.2 Enforcement of Contracts
4.3 Commercial Dispute Resolution
In-Country Assessment

4.  Rational Dispute Resolution –Weak

Goal – An efficient institutional framework that balances the rights of the public, owners, lenders and borrowers in the event of a dispute or loan default



4.1 Rule of Law

Core Question:         Do all market participants abide by the rule of law and have confidence in the courts and the ability of police to control crime? No – Weak – There are high business costs of crime and violence. Judicial accountability has improved a bit but is still weak. Confidence in impartiality of police, courts and contract enforcement has increased significantly, but is still low.



4.1.1   What is the confidence level of the strength and impartiality of the police, courts and contract enforcement? Weak – Percentile Ranking – 47.9 Trend ­↑

Source: Worldwide Governance Indicators, Colombia 2011, World Bank,



4.1.2   Can members of the judiciary be held accountable for their actions? No – Score 61 out of 100 – Weak

 Source: 2011 Global Integrity Report –


Costs of Crime

4.1.3   What are the business costs of crime and violence? High Costs – Ranking 136th out of 144 – Score 2.8 out of 7, Very Weak

Source: The Global Competitiveness Report 2012-2013, World Economic Forum
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4.2 Enforcement of Contracts

Core Question: Are systems in place for timely and efficient enforcement of contracts?
No – Very Weak – Enforcement of contracts is ranked very low and judicial enforcements are the primary mechanism in the dispute resolution process. 


4.2.1 – Judicial Enforcement

Commercial – Very Weak – Ranking 154th out of 185  Trend          What is the number of procedures involved in resolving a commercial dispute? 34          What is the time between the filing of a lawsuit and resolution in judicial enforcements? 1,346 days          What is the cost of judicial enforcements as a percentage of claim value? 47.9%

Source: Doing Business 2013

Survey Question 10          What is the time between notice of intent to foreclose and loan collection in judicial enforcements?  – 705 days

Survey Question 11          What is the cost of judicial enforcements as a percentage of property value? – 8.59%


4.2.2 – Summary Proceedings – Very Weak

SQ 12  Summary proceedings are alternative dispute resolution processes where creditors can apply for a direct court order in property disputes. What is the time between notice of intent to foreclose and loan collection in summary proceedings if available to lenders? – Not Available – Very Weak

SQ 13  What is the cost of summary proceeding if available to lenders as a percentage of property value? – NA – Very Weak


4.2.3 – Power-of-Sale

SQ 14  Power-of-sale agreements give creditors to power to sell properties after notice to the borrower without court intervention. What is the time between notice of intent to sell and loan collection for power-of-sale agreements if available to lenders? NA – Very Weak

SQ 15  What is the cost of power-of-sale agreements if available to lenders as a percentage of property value? NA – Very Weak

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation- No longer available online.$FILE/FinancingHomes.pdf
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4.3 Commercial Dispute Resolution

Core Question:         Can commercial disputes be resolved efficiently and fairly without exorbitant expense and delay? Yes – Strong – There are methods for alternative dispute resolution and the country is involved in multiple regional and bilateral trade agreements.  There is a lack of a court system specialized for handling commercial disputes.


Survey Questions

4.3.1 Commercial Courts

SQ 16  Do specialized commercial courts exist for the handling of property disputes and foreclosures? No – Very Weak, commercial disputes are tried in the lower court division called Ordinary Courts

Sources: Globalex – (Log In needed)


4.3.2 Alternative Dispute Resolution

SQ 17  Are alternative dispute resolution mechanisms in place including commercial arbitration, private mediation and community based processes? Yes – Strong – Member of New York Arbitration Convention

Sources: New York Convention

The Colombia Law and Business Post


4.3.3 Commercial Treaties

SQ 18  What bilateral, regional and international commercial treaties exist concerning business between countries? Colombia is a member of WTO and participates in several regional trade agreements.  The US-Colombia Trade Agreement is now in force and trade agreement has been reached between EU and Colombia. – Very Strong

 Source: Office of the United States Trade Representative

European Commission –

World Trade Organization –


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In-Country Assessment

FQ8                To what extent do practitioners report the use of formal contracts and trust institutions to support contract enforcement?

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