A. LEGISLATION AND RULES
A.1 Legislation
Chile continues to have a dual legal framework in the field of arbitration. Domestic arbitration is ruled by the Organic Code of Courts and the Code of Civil Procedure (CCP), whereas international arbitration is governed by Act No. 19,971 on International Commercial Arbitration (“ICA Act”), which came into force in September 2004 and 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, institute specific arbitration mechanisms to settle disputes arising from their application to the benefit of foreign investors. Moreover, the Apostille Convention has greatly reduced costs and time when it comes to documents issued abroad, thus enhancing the advantages of the jurisdiction as an arbitration seat.
Chile has a longstanding tradition of 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 introducing amendments to the ICA Act. A bill introduced in December 2022 to prohibit arbitration between small or medium-sized businesses and large corporations (revenue over USD 4.5 million) is currently at a standstill.
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). The Center of Mining Arbitration and Mediation (CAMMIN) is devoted to mining disputes. Other minor arbitration institutions are located throughout the country.
A.2.1 CAM
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.
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 solve their disputes through informal assistance. Additionally, CAM has a special mediation service for small and medium-sized businesses.
CAM’s headquarters are located in the city center of Santiago,[1] and there is also a venue in the borough of Las Condes, which is closer to principal law firms’ offices.[2] Procedural tracing is conducted through E-CAM, its online system.
A.2.2 CNA
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.[3]
A.2.3 Special and regional arbitration institutions
In 2021, the Mining Chamber of Chile created the CAMMIN, providing expert arbitration services in relation to mining, energy and environmental[4] matters. The new National Center of Mediation, Arbitration and Conciliation is committed to settling neighborhood disputes.[5]
A.2.4 Regional arbitration institutions
There are also other regional arbitration institutions, such as the Center for Arbitration and Mediation of the Region of Valparaíso in the port of Valparaíso[6]; the Biobío Arbitration and Mediation Center in the city of Concepción[7]; and the Center of Conciliation and Arbitration in the southern city of Puerto Montt.[8]
Furthermore, authors notice a growing trend to include arbitration clauses to settle disputes through international arbitration bodies (such as the ICC, the SIAC and the LCIA), and in some cases, with these procedures having seats in Chile. The possibility of holding hearings remotely, the competitiveness of the fees of said bodies, and the rosters of arbitrators have contributed significantly to this phenomenon.
B. CASES
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): (i) have consistently rejected actions other than the request for annulment over arbitral rulings; and (ii) still, to this date, 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.[9]
Moreover, the Supreme Court (which is in charge of recognizing foreign awards) tends to adopt a very protective approach to the ICA Act since it only rejects recognition on specific occasions.
Recent case law developments include the following:
B.1 Albemarle Limitada v. Emaresa and Cipatex[10]
As mentioned above, the ICA Act enshrines the principle of “minimum intervention,” by which ordinary courts are expected to refrain from interfering with arbitration, and which explains that remedies against procedural orders and awards are limited to those expressly provided by law. This approach has consistently been supported by the Supreme Court.[11]
In May 2023, Chile’s Constitutional Court also lent decisive support for the minimum intervention principle by rejecting a motion to declare that some provisions of the CCP were against the Constitution. Had it been granted, it would have created an additional recourse against decisions issued in international commercial arbitration apart from those established by the ICA Act.
In fact, Albemarle brought an arbitration case in Chile (governed by the ICA Act) against Emaresa, a Chilean company, and Cipatex, a Brazilian enterprise, which was not considered in the arbitration agreement. The arbitrator declared that it lacked jurisdiction regarding Cipatex, a decision which Albemarle appealed before the President of the Court of Appeals of Santiago, pursuant to article 16.3 of the ICA Act: “If, as a preliminary matter, the arbitral tribunal declares itself competent, any of the parties, within thirty days following receipt of notification of that decision, may request the President of the respective Court of Appeals to resolve the issue, and the resolution of this court cannot be appealed[…]”.
The president of the Court of Appeals of Santiago rejected Albemarle’s motion, a decision that the claimant attempted to reverse in the Supreme Court by filing a “remedy for cassation,” an alternative envisaged by the CCP to set aside certain judicial rulings. However, Albermarle based this new motion on legal grounds for cassation, which the CCP expressly excluded in this sort of case and which would inevitably lead to the petition being rejected.
To prevent this effect, Albemarle requested the intervention of the Constitutional Court, which is empowered to declare that certain legal provisions are not applicable over a case since they contradict the Constitution. The claimant submitted that the CCP provision that restricted cassation to specific cases — thus rendering its own request for cassation futile — clashed with due process requirements, as it would leave a party without means of challenging a decision.
The Constitutional Court rejected Albemarle’s request. It is important to highlight that the court particularly considered the ICA Act provisions and recognized the need to safeguard the minimum intervention principle. In that regard, the Constitutional Court pointed out that Article 16.3 was clear enough to preclude parties from bringing appeals against the decision of the president of the Court of Appeals and that when reviewing the constitutionality of Article 16.3 of the ICA Act in 2004, the Constitutional Court had no objections against it. The fact that parties had this special recourse to challenge the arbitrator’s decisions on jurisdiction and that they also have the request for annulment against final awards demonstrates — in their view — that parties have a right to be heard under the ICA Act.
This decision of the Constitutional Court not only reinforces the deference that Chilean courts have toward international commercial arbitration but may also shed further light on other topics, such as the protection of the kompetenz-kompetenz principle.
[1] Monjitas 392, Floor 11, borough of Santiago, city of Santiago de Chile. Its website is: www.camsantiago.cl
[2] San Sebastián 2812, floor 5, borough of Las Condes.
[3] Apoquindo 3600, Floor 5, borough of Las Condes, city of Santiago de Chile. Its website is http://www.cna.cl/
[5] http://www.cnmac.cl/#about
[6] Plaza Justicia (without number), Floor 1, city of Valparaíso. Its website is http://www.abogados-valparaiso.cl/
[7] Caupolicán 567, Office 201, city of Concepción. Its website is https://www.cpcbiobio.cl/servicios/centro-de-arbitraje-y-mediacion/
[8] O’Higgins 144, City of Puerto Montt. Its website is http://www.colegioabogados.info/centro-conciliacin-y-arbitrajes
[9] 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.
[10] Constitutional Court, Docket No. 13.527-2022-INA.
[11] In the 2023 International Arbitration Version, we made reference to Tarascona Corporation v. Daniel Yarur and Óscar Bretón, a case in which the Supreme Court confirmed its sympathetic approach toward international arbitration and the kompetenz-kompetenz principle. See here.
