A. LEGISLATION AND RULES
Chile continues to have a dual legal framework in the field. Domestic arbitration is ruled by the Organic Code of Courts and the Code of Civil Procedure, whereas international arbitration is governed by Act No. 19,971 on International Commercial Arbitration (“ICA Act”), which came into force in September 2004 and it is mostly a replica of the UNCITRAL Model Law.
Chile is also a signatory to the New York Convention, the Inter-American Convention for Letters Rogatory, the Panama Convention and the ICSID Convention. Additionally, most of the free trade agreements, as well as the BITs that Chile has entered into, instituted specific arbitration mechanisms to settle disputes arising from their application to the benefit of foreign investors. In addition, the Apostille Convention — which entered into force in Chile in 2016 — has greatly reduced costs and time when it comes to foreign documents, thus enhancing the advantages of the jurisdiction as an arbitration seat.
Chile has a longstanding tradition in arbitration. Domestic courts firmly protect arbitration tribunals by granting them autonomy and independence to carry out their duties. This judicial support, alongside the well-recognized quality of arbitrators and national arbitral venues, good infrastructure and the credibility that the judicial branch has earned over decades, has positioned Chile as a reliable seat for arbitration in Latin America.
There are no recent legislative bills to introduce amendments to the ICA Act. However, in December 2022, a group of members of the Chamber of Deputies tabled a bill of law to prohibit arbitration between small or medium-sized businesses and large corporations (revenue over USD 4.5 million).
A.2 Institutions, rules and infrastructure
There are two main arbitration institutions in Chile — the Arbitration and Mediation Center of the Santiago Chamber of Commerce (CAM) and the National Center of Arbitration of Chile (CNA). Other minor arbitration institutions are located throughout the country.
The Arbitration and Mediation Center of the Santiago Chamber of Commerce (CAM) is the leading arbitration institution in the country. It was founded in 1992 as a nonprofit branch of the Chamber of Commerce of Santiago with the support of the Bar Association of Chile.
CAM has its own procedural rules for both international and domestic disputes unless both parties agree to establish different rules. In April 2021, CAM Santiago released new procedural rules for domestic arbitration.
CAM also has a Dispute Boards service, an alternative system of early resolution of disputes, under which a panel of independent experts helps the parties to solve their disputes through informal assistance. Additionally, CAM has a special mediation service for small and medium-sized businesses.
CAM headquarters are located in the city center of Santiago, and there is also a venue in the borough of Las Condes that is closer to the principal law firms’ offices. Procedural tracing is conducted through E-CAM, its online system, that has been recently revamped.
The CNA was created in 2007 by independent professionals to constitute an alternative to institutional arbitration in Chile. CNA Santiago handles arbitration and mediation for solving domestic disputes. It is located in the financial district of Santiago.
A.2.3 Special and regional arbitration institutions
In 2021, the Mining Chamber of Chile created the Center of Mining Arbitration and Mediation, providing expert arbitration services in relation to Mining, Energy and Environment matters. The new National Center of Mediation, Arbitration and Conciliation is committed to settling neighborhood disputes.
There are also other regional arbitration institutions, such as the Center for Arbitration and Mediation of the Region of Valparaíso, located in the port of Valparaíso, while Biobío Arbitration and Mediation Center is located in the city of Concepción, and the Center of Conciliation and Arbitration has its venue in the southern city of Puerto Montt.
As expressly provided by the ICA Act, the only way to challenge an international arbitral award is by submitting a request for annulment (recurso de nulidad) before a court of appeals. In this regard, the Chilean superior courts (Supreme Court and courts of appeals) have (i) consistently rejected actions other than the request for annulment over arbitral rulings; and (ii) still to this date, they have never granted an annulment of an arbitral award based on the ICA Act. Therefore, the criterion held by the Supreme Court to challenge an arbitral award is still narrow and restrictive, thus protecting the value of the arbitral award.
Moreover, the Supreme Court (which is in charge of recognizing foreign awards) tends to adopt a very protective approach of the ICA Act, since it only rejects recognition on specific occasions.
Recent case law developments include:
B.1 Sudamérica SpA and CCF Sudamérica SpA v. the Justices of the First Chamber of the Court of Appeals of Santiago
In February 2020, the First Chamber of the Court of Appeals of Santiago declared the inadmissibility of an appeal brought against an international arbitral award. The court found that though the Arbitration Agreement expressly allowed parties to file an appeal against the final award, this provision was incompatible with the ICA Act, which made the request for an annulment the only way available in the Chilean lex fori to challenge an award.
Subsequently, the losing party submitted a request of complaintagainst the Justices that rejected their appeal. By doing this, Sudamérica’s counsel expected the Supreme Court to overturn the ruling, grant the appeal and impose disciplinary sanctions over the board of judges — on the grounds of alleged serious misconduct or abuse. In their view, the judges wrongfully altered their freedom of contract.
In September 2020, the Supreme Court rejected the request of complaint but acted ex officio to invalidate the ruling issued by the court of appeals. Following the principles of contractual freedom, good faith and estoppel, the court concluded that it was permissible for the parties to state in their arbitration agreement whatever means of challenge they deemed appropriate, apart from the request for annulment set out in the ICA Act.
Whilst this ruling confirms that free agreement of the parties is the cornerstone for international arbitration and the very source of jurisdiction for arbitral tribunals, it equally raises questions on the legal ability of the parties to set aside some aspects of the lex fori. Scholarly opinions questioned this Supreme Court’s decision.
B.2 Tarascona Corporation v. Daniel Yarur and Óscar Bretón
In December 2022, the Supreme Court confirmed the lack of jurisdiction of Chilean courts to hear a case between a company and its agents, ever since the bylaws of such company contained an arbitral clause.
Tarascona Corporation, a company domiciled in the British Virgin Islands (BVI), instituted proceedings before a domestic first instance court against two of its former representatives in Chile, requesting them to compensate losses. Once served, the defendants raised a preliminary issue of absolute lack of jurisdiction (excepción dilatoria de incompetencia) since the bylaws of Tarascona Corporation establish that whenever differences arise between the company and any of its shareholders, managers or attorneys-in-fact, those controversies shall be submitted to the decision of two arbitrators, one picked by each party.
The first instance court rejected the preliminary issue, coinciding with the plaintiff that the arbitral clause was only applicable to lawsuits brought in the BVI, which was confirmed by the fact that the appointment of the arbitrator was to be made in accordance with BVI’s laws and that the arbitral clause makes reference to BVI’s legislation. The defendants appealed the decision before the Court of Appeals of Santiago, which overturned it and declared that Chilean courts did not have jurisdiction to hear the case. Against this new judgment, the plaintiff petitioned the Supreme Court to reject the preliminary issue through a cassation remedy.
The Supreme Court rejected Tarascona Corporation’s request and eventually accepted the preliminary issue, thus referring the parties to arbitration. The Supreme Court’s main line of reasoning was that although the arbitral clause could be considered pathological, they were bound to adopt a pro validate approach to said clause. The court concluded that the existence of a practical difficulty in appointing one of the arbitrators did not impair the parties from seeking arbitration since the ICA Act lays down a series of remedies for the application in Chile of foreign arbitral clauses, including the appointment of arbitrators (as indicated in article 11 of the ICA Act). Besides, the court found that any defects in the arbitral clause were a matter that only arbitrators shall analyze and decide.
This recent ruling did not only confirm the sympathetic approach of Chilean courts towards international arbitration but also shed light on their protection of the negative effect of the arbitral clause, in view of the fact that the Supreme Court expressly referred the discussion on the validity and scope of said clause to the arbitrators.
 San Sebastián 2812, floor 5, borough of Las Condes.
 Caupolicán 567, Office 201, city of Concepción. Its website is https://www.cpcbiobio.cl/servicios/centro-de-arbitraje-y-mediacion/
 O’Higgins 144, City of Puerto Montt. Its website is http://www.colegioabogados.info/centro-conciliacin-y-arbitrajes
 We make reference to the following leading cases: D’Arcy Masius Benton & Bowles Inc. v. Arbitrator Mr. Jorquiera [Court of Appeals of Santiago, Docket No. 865-2006]; Huber/Coderch Mitjans Jorge – Sociedad Río Bonito SA – Sociedad Queltehue SA [Court of Appeals of Santiago, Docket No. 1739-2015; Supreme Court, Docket No. 30967-2015]; Ingeniería Proyersa Ltda v. Arbitrator Mr. Figueroa [Court of Appeals of Santiago, Docket No. 2685-2016; Supreme Court, Docket No. 62114-2016]; Publicis Groupe Holdings BV v. Arbitrator Mr. Vial [Court of Appeals of Santiago, Docket No. 9134-2007]; Administradora Río Claro SA v. Arbitrator Mr. Jana [Court of Appeals of Santiago, Docket No. 3390-2017];Benchmark Genetics Chile SA (formerly Salmones Chaicas SA) v. Atlantium [Court of Appeals of Santiago, Docket No. 14054-2019]; Inversiones VyV SpA v. GyM Chile SpA and GyM SA [Court of Appeals of Santiago, docket No. 4394-2019 and Supreme Court, docket No. 11139-2020], among others.
 Court of Appeals of Santiago, docket No. 12017-2019 and Supreme Court, docket No. 19568-2020.
 e.g. Vásquez, María Fernanda (2020): “The Minimum Intervention Principle in International Commercial Arbitration: The Case of a Questionable Ruling by the Chilean Supreme Court” (title in English). In: Revista de Derecho de la Pontificia Universidad Católica de Valparaíso, N° 55, pp. 289-301.