Meritage case: a historical precedent with profound implications for foreign investment

The recent intervention of our managing partner, Cristina Arrubla Devis , at the Medellín Chamber of Commerce event , left important reflections on the ICSID arbitration award in the case of Ángel Samuel Seda and others vs. Republic of Colombia (Meritage case).

Intervención Cristina Arrubla en la Cámara de Comercio de Medellín

This award sets an unprecedented precedent in international investment arbitration: for the first time, an arbitral tribunal accepted the essential security exception as a valid defense for a State, excluding investors' claims from the merits analysis.

Why is this precedent relevant?

• Because it reconfigures the scope of international investment protection by allowing a State to invoke the protection of essential interests—such as national security—to avoid scrutiny of its measures by the court.

• Because the exception was considered self-judgmental , which gives the State a wide margin to define when and how to apply it, as long as it is contemplated in the respective treaty.

• Because the court did not analyze whether there was expropriation or violation of rights , which raises questions about investors' effective access to international protection mechanisms.

  
  

What risks does this decision pose?

Cristina Arrubla warned that, while the ruling represents a legal victory for Colombia, it also increases the country's risk :

• It reduces legal security for foreign investors by allowing the State to exclude certain measures from the treaty without substantive control.

• It undermines confidence in international arbitration as a neutral and effective tool for resolving disputes between investors and states.

• This could encourage the strategic use of this exception as an "escape clause" if its invocation is not guaranteed in good faith and with reasonable justification.

  
  

Final reflection

This case demonstrates that the essential security exception cannot be invoked arbitrarily : it must be expressly provided for in the applicable treaty and its use must be subject to minimum standards of good faith and plausibility.

The Meritage precedent opens a new chapter in investment arbitration, but it also calls for a critical review of the balance between state sovereignty and the protection of foreign investment. At Arrubla Devis, we remain committed to providing strategic advice that anticipates risks and promotes more stable and reliable legal environments for investment.

Watch the full video of " Challenges and Perspectives of Arbitration as a Dispute Resolution Mechanism" here.