Colombia Update: Did the Constitutional Court End the jurisdictional Powers of the Superintendency of Companies? Not quite

In August 2023, the Colombian Constitutional Court, through press release No. 29, published the decisive section of Ruling C-318/23, which deals with the jurisdictional powers of the Superintendency of Companies. The Court declared unconstitutional the expression “the resolution of corporate conflicts” contained in article 24.5(b) of the Colombian General Code of Procedure.

Pending the publication of the judgment, it does not seem as grave as it has been presented.

Which Article of the Constitution Does the Court Consider Violated?

According to press release No. 29 of the Court, the statute mentioned above violates paragraph 3 of article 116 of the Constitution, which states that “(…) Exceptionally, the law may attribute jurisdictional functions in specific matters to certain administrative authorities (…)”. (Emphasis added)

The Court found that the General Code of Procedure’s rule might be construed in two ways:

1. Strict interpretation: The rule only grants jurisdiction to the Superintendency to resolve corporate conflicts between shareholders, the company and its stockholders, or between shareholders and the directors and officers (preferred by the Court).
2. Extensive interpretation: The norm allows the Superintendency to resolve any corporate conflict related to the corporate agreement, including disputes with third parties (deemed unconstitutional).

In this sense, the Court concluded that the broadest and most imprecise interpretation makes the jurisdictional powers granted to the Superintendency of Companies contrary to Article 116 of the Constitution. Consequently, it limited the understanding by declaring the expression unconstitutional.

What are the implications of this ruling? Unlike what many thought, the Court’s decision does not end the jurisdictional powers of the Superintendency of Companies to solve corporate disputes. The Court did limit and specify the Superintendency’s abilities as a Judge to remove the possibility of a broad interpretation of the procedural rule.

In this sense, Article 24.5(b) of the General Code of Procedure must be read as follows: “The Superintendency of Companies will have jurisdictional powers in corporate matters, referred to “(b) The resolution of corporate conflicts, the differences that occur between shareholders, or between them and the corporation or between them and their directors and officers, in the development of the corporate agreement or the unilateral act.” (The crossed-out part was declared unconstitutional).

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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