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Former .co registry defeated in $350 million contract fix case

Kevin Murphy, September 24, 2024, Domain Registries

The Neustar spin-off that once operated the .co TLD reportedly has lost a case against the Colombian government in which it had sought $350 million in damages over the acrimonious renewal of its registry contract.

According to local reports, the International Center for the Settlement of Investment Disputes, part of the World Bank, last week ruled in favor of Colombia on both the merits and on jurisdictional grounds.

The case had been brought in late 2019 by Neustar, which at the time managed some 2.3 million .co domains, under government contract, via a Colombian subsidiary it acquired in 2014.

Neustar has since been acquired by GoDaddy, which continues to run .co, but the ICSID case was inherited by Vercara, the DNS security services arm of the company that GoDaddy didn’t buy.

As .CO Internet, Vercara was hired by Colombia to turn .co into a global alternative to .com with a much-hyped 2010 relaunch. It was very successful, but when it came time to renew the initial 10-year contract, Colombia instead put it out for rebid and started behaving very strangely.

You may recall from coverage here on DI and on The Register that the Colombian tender process seemed to have been specially constructed so that only Afilias, then Neustar’s fiercest rival and now part of Identity Digital, could win.

The government’s RFP had set technical thresholds, such as daily registry transactions, that Afilias could show it met but Neustar could not. It looked naive and arbitrary at best and dodgy at worst.

So Neustar took Colombia to arbitration with ICSID, saying (pdf) the government was in breach of the Trade Promotion Agreement between the US and Colombia.

Neustar ended up winning the contract anyway, albeit on terms that were massively more favorable to the government, and it sold its entire registry services business to GoDaddy days later.

Now, almost five years later, it seems Vercara has lost the case it inherited. While ICSID has not yet published its arbitration panel’s decision, local newspapers have got hold of a copy.

Colombia’s oldest newspaper, El Spectador, reports: “The court, in addition to stating that it does not have jurisdiction to hear Vercara’s claims, rejected all the claims on the merits.”

In unrelated news, Vercara’s recently announced acquisition by DigiCert closed yesterday.