The dispute arises from an investment by the Colombian company, Eléctricas de Medellín Ingeniería y Servicios S.A.S. (EDEMSA), in the Honduran electricity distribution sector. The claim is brought against the Republic of Honduras under the investment chapter of the Free Trade Agreement between Colombia and the republics of El Salvador, Guatemala, and Honduras (TLC). The investment originates from a 2016 Public-Private Partnership contract awarded to a consortium led by EDEMSA, which operated through its Honduran-constituted vehicle, Empresa Energía Honduras S.A. de C.V. (EEH). The seven-year concession contract was designed to address Honduras’s critical problem of high energy losses in its national distribution network. The contract mandated EEH to manage the distribution network, invest in its modernization, and implement a program to reduce technical and non-technical losses. The remuneration structure included a fixed monthly fee, reimbursement for investments, and performance-based success fees for loss reduction and recovery of bad debt. The Claimants assert that they successfully executed the contract, achieving significant operational improvements. According to their Notice of Intent, these successes included a substantial reduction in the frequency and duration of power interruptions, a 9.39 percentage point reduction in overall energy losses, the collection of over US$7.1 billion in revenue for the state utility (ENEE), and the investment of millions in network upgrades. Despite this performance, the Claimants allege that Honduras engaged in a series of escalating measures that frustrated the contract, destroyed the value of the investment, and breached its treaty obligations. The core of the complaint is that Honduras, through its state-owned utility ENEE, consistently failed to pay the full contractual fixed monthly fee, remitting only a partial amount throughout the contract's term. Concurrently, Honduras failed to conduct a contractually mandated study (VAD) that was necessary to adjust payments, effectively locking the investor into an underfunded operational model. Furthermore, the Claimants allege that Honduras implemented adverse regulatory and legislative changes. The energy regulator, CREE, issued new regulations that unilaterally altered the terms for recovering losses from irregular consumption. Politically, the government is accused of orchestrating a takeover of the contract's technical oversight committee, creating a conflict of interest by placing ENEE in control. This committee then used a report from a supervisor, Manitoba Hydro International, which allegedly applied a flawed and retroactively altered formula, to declare EEH in default of its loss-reduction targets. Based on these allegedly unfounded defaults, the Honduran state agency SAPP initiated a formal “intervention” of the concession contract in September 2021, effectively seizing operational control from the investor. This intervention was repeatedly extended. The situation escalated in May 2022 when the Honduran Congress passed a special law that legislatively declared EEH to be in breach of its contract, called for criminal investigations, and effectively repudiated the state's contractual obligations. The Claimants also allege a state-sponsored campaign of public denigration that incited aggression against EEH’s personnel and property. Following the contract's expiration, Honduras allegedly continued its hostile actions by unlawfully calling a US$10 million performance guarantee and imposing over US$139 million in penalties without due process. The Claimants argue that this series of actions amounts to a denial of fair and equitable treatment, a failure to provide full protection and security, discriminatory treatment compared to domestic and other foreign investors, and an indirect expropriation of their investment without compensation. They seek damages in excess of US$500 million, representing unpaid fees, the value of their investment, and other losses.