This matter involves a dispute between Angel Samuel Seda and other investors (claimants) and the Republic of Colombia with respect to an alleged unlawful expropriation of a real estate development (Meritage). Claimants started developing the Meritage project in 2012, which would include residential units and a hotel. In August 2017, Colombia formally expropriated the Meritage project, with claimants thus seeking compensation for the loss of their interest in the Meritage project and in additional real estate projects (including residential units and hotels) that claimants argued they were unable to develop following the Meritage expropriation (ICSID Case No. ARB/19/6).

The Republic of Colombia retained NERA to provide expert testimony on damages. The NERA team consisted of Senior Managing Director Richard Hern, Director Zuzana Janeckova, Senior Consultant Patricio Suarez Urtaza, and Consultants Tarek Badrakhan, Maximilian Czernin, and Ricardo Rodrigues. In particular, NERA was asked to assess damages and to respond to the opposing experts’ quantification of damages.

NERA’s analysis included a review of different valuation methodologies, concluding that the opposing experts’ use of a discounted cash flow approach was inappropriate for this case given that the required inputs and key risks cannot be derived with reasonable certainty in light of the early-stage nature of the project(s). Instead, NERA assessed damages based on the cost approach, consistent with fair market value principles. NERA also demonstrated that, even under a discounted cash flow approach, the opposing expert’s valuation was overstated as a result of exaggerated assumptions on key value drivers, including overstated profit margins relative to comparators and understating the projects’ riskiness.

Dr. Hern presented NERA’s analysis of damages in two expert reports and provided oral testimony at a hearing in Washington, DC in May 2022. In June 2024, the Tribunal decided in favor of Colombia, dismissing the claim on jurisdictional grounds.

For more information, please click here for an article published by Global Arbitration Review (GAR).