Colombia has adopted one of the most ambitious arbitration reforms in recent years. Law 2540/2025 introduces arbitration for enforcement proceedings (arbitraje para procesos ejecutivos), and, in doing so, extends arbitration beyond adjudication into an area traditionally associated with courts. The law’s stated objective is to contribute to the decongestion of the judicial system, but its wider significance is doctrinal. It challenges the long-standing idea that arbitrators lack enforcement authority.
From Adjudication to Enforcement
Colombia’s constitutional framework already permits private individuals to be temporarily vested with the function of administering justice as arbitrators.[1] Colombian constitutional jurisprudence has likewise recognised that enforcement proceedings are not, in principle, excluded from arbitral jurisdiction, thus leaving it to Congress to regulate them.[2]
Law 2540/2025 transforms that constitutional opening into a fully developed procedural framework for enforcement arbitration. Under this framework, enforcement arbitration is strictly institutional, excluding ad hoc proceedings, administered by a designated enforcement arbitrator, and any award must be decided according to law, not equity.[3]
What the Law Actually Changes
At its core, Law 2540/2025 opens a new arbitral route. It creates an árbitro ejecutor to conduct the enforcement proceeding and, where needed, an árbitro de medidas cautelares previas to handle interim measures before the tribunal is constituted, although both roles may be performed by the same person.[4]
The law precisely regulates the arbitration agreement. It may take the form of either an arbitration clause or a submission agreement, but it generally cannot be incorporated into the negotiable instrument relied on as the enforceable title.[5]
In addition, the law distinguishes two forms of arbitration agreement:
- a closed form, limited to one enforceable title; and
- an open form, capable of covering multiple existing or future enforceable titles arising out of one or more identified contractual relationships.[6]
In practice, this allows parties to build an enforcement mechanism into their contracts from the outset, but it also means they will need to review their standard forms carefully, including credit agreements and guarantees.
A Broader Net of Bound Parties
One of the regime’s significant commercial features is its reach beyond the original signatories. Law 2540/2025 extends the effects of the enforcement arbitration agreement to co-debtors, joint debtors, guarantors/sureties, third-party guarantors, and issuers of letters of credit.[7] This broadens the practical value of the regime by allowing related enforcement claims to be resolved in a single forum, rather than through fragmented proceedings against different obligors.
Consumer and Weaker-Party Protections
The reform also includes protections for weaker parties. Where consumers are involved, the law requires clear and comprehensible disclosure of the arbitration agreement, including its scope and practical consequences.[8] It also introduces targeted safeguards in the financial services and housing sectors, such as withdrawal rights in adhesion contracts, separate consent requirements for mortgage lending, and exclusions for particularly sensitive housing categories.[9]
Even so, important practical questions remain. The law does not fully clarify how these disclosures must be given in practice or whether the requirements can be implemented in a workable and consistent manner.
Enforcement of Awards
One of the law’s most striking innovations is that certain domestic arbitral awards may be enforced before the same tribunal that issued them, provided the request is filed within ten business days of notification of the award or any decision on clarification, correction, or addition. If that deadline is missed, the creditor must commence a new enforcement arbitration.[10]
This is the feature that most clearly narrows the traditional divide between adjudication and enforcement. Article 28 allows certain domestic arbitral awards to be enforced before the same tribunal that rendered them, rather than requiring the prevailing party to move immediately to the courts.[11]
Court’s Role
Even where a valid enforcement arbitration agreement exists, judicial involvement is not entirely displaced. Under Article 13, the arbitral process terminates, and the matter returns to the judicial system if the tribunal is not constituted in time or if the statutory period expires without an executive award or payment.[12] Further, under Article 19, the same result follows if the tribunal declines jurisdiction.[13]
Impact of Law 2540/2025
For sophisticated creditors, Law 2540/2025 could be highly significant. A single arbitral framework may be used for both the merits and enforcement stages, reducing the need to shift between arbitration and the courts. That could shorten recovery timelines, preserve value, and improve enforcement outcomes.
More broadly, the reform may reshape how arbitration is understood. If the model works, arbitration may be seen as more than a forum for resolving disputes. It may also become a tool for carrying out parts of enforcement traditionally handled by courts. At the same time, that shift is likely to spark debate over due process, consent, consumer protection, and the limits of arbitral power.
Conclusion
Law 2540/2025 marks a significant shift in Colombia’s domestic arbitration regime. It gives arbitrators a role in enforcement traditionally associated with the courts. The reform aims both to reduce pressure on the judiciary and to offer a more efficient path to recovery. However, its success will depend on how it operates in practice. Its full impact will only become clear over time.
[1] C. Posada et al., Arbitrators Will Now Have Enforcement Powers in Colombia (29 September 2025), available at: https://legalblogs.wolterskluwer.com/arbitration-blog/arbitrators-will-now-have-enforcement-powers-in-colombia/.
[2] Constitutional Court, Judgment C-294 dated 6 July 1995.
[3] C. Posada et al., Arbitrators Will Now Have Enforcement Powers in Colombia (29 September 2025), available at: https://legalblogs.wolterskluwer.com/arbitration-blog/arbitrators-will-now-have-enforcement-powers-in-colombia/.
[4] Law 2540/2025, Article 3; see also Law 2540/2025, Article 2.
[5] Law 2540/2025, Article 4.
[6] Law 2540/2025, Article 4.
[7] Law 2540/2025, Article 7.
[8] Law 2540/2025, Article 5.
[9] Law 2540/2025, Articles 5, 6, 30.
[10] Law 2540/2025, Article 28; see also C. Posada et al., Arbitrators Will Now Have Enforcement Powers in Colombia (29 September 2025), available at: https://legalblogs.wolterskluwer.com/arbitration-blog/arbitrators-will-now-have-enforcement-powers-in-colombia/.
[11] Law 2540/2025, Article 28.
[12] Law 2540/2025, Article 13.
[13] Law 2540/2025, Article 19.
[14] Law 2540/2025, Article 24.
