Arbitration in Chile: An Overview
Introduction
Arbitration has become an increasingly popular method for resolving commercial disputes in Chile, offering parties a flexible, efficient, and confidential alternative to traditional court proceedings. As Chile continues to position itself as a regional hub for international business, understanding the country’s arbitration landscape is essential for companies and individuals considering dispute resolution options. This article provides an overview of the legal framework governing arbitration in Chile, highlights key features of the process, and explains the mechanisms for enforcement and appeal of arbitral awards.
Legal Framework
Chile operates a dual system for arbitration, distinguishing between domestic and international proceedings. Domestic arbitration is governed by the Código Orgánico de Tribunales and the Código de Procedimiento Civil. In contrast, international commercial arbitration is regulated by Law N°19.971, which incorporates the UNCITRAL Model Law, aligning Chile with international best practices.
Chile is a civil law jurisdiction, and its arbitration laws reflect this tradition. The country differentiates clearly between domestic and international arbitration, with the latter subject to a dedicated legal regime. Notably, Chile is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, facilitating the enforcement of foreign arbitral decisions within its territory.
There are both mandatory and non-mandatory provisions in Chilean arbitration law. Certain matters are subject to mandatory or prohibited arbitration, and for voluntary arbitration to be valid, parties must enter into a clear arbitration agreement. The subject matter must also not fall within the scope of prohibited arbitration.
Key Features of Arbitration in Chile
The most commonly chosen arbitral institutions in Chile are the Centro de Arbitraje y Mediación ("CAM"), provided by the Santiago Chamber of Commerce, the Centro Nacional de Arbitrajes ("CAN"), and the International Chamber of Commerce ("ICC"). These institutions are recognised for their expertise and robust procedural frameworks.
Documentary evidence is generally afforded more weight than witness testimony in Chilean procedural law. If the arbitrator is a legal professional or a mixed arbitrator, civil procedural rules apply to the assessment of evidence. However, 'Arbitrators by Equity' (who decide matters ex aequo et bono) are not bound by these rules and may rely on principles of prudence and equity.
Expert evidence is treated as a distinct and highly reliable form of evidence, particularly in matters requiring specialised knowledge. Confidentiality is not governed by a specific statute, allowing parties to agree on confidentiality clauses. However, enforcing non-disclosure agreements (NDAs) can be challenging due to the difficulty of proving damages in the event of a breach.
There is no single legal norm regulating the treatment of confidential or privileged documents in Chile. Protection may arise from various statutes, including the Industrial Property Law, Intellectual Property Law, Antitrust Law, and Data Protection Law. Sector-specific regulations also apply, particularly in employment and public sector contexts.
Enforcement and Appeals
Chile’s status as a signatory to the New York Convention ensures that foreign arbitral awards are generally recognised and enforceable. Domestic awards can be enforced either by the arbitrator who issued the award or through the ordinary courts. If the use of public force is required, only the ordinary courts have the authority to intervene, as arbitral tribunals do not possess such powers.
The right to appeal an arbitral award in Chile depends on the type of arbitrator. For legal arbitrators, appeals are possible under the same terms as civil process appeals before the Court of Appeals. For arbitrators by equity or mixed arbitrators, the right to appeal depends on the parties’ agreement and may be exercised before an ad hoc tribunal or the Court of Appeals. There are generally no restrictions on the grounds for appeal when appeals are permitted. Challenging an arbitral award in the courts is possible, but the process and grounds for challenge are determined by the type of arbitrator and the terms of the arbitration agreement.
Conclusion
Arbitration in Chile offers a sophisticated and reliable framework for resolving both domestic and international disputes. The country’s dual legal system, adherence to international standards, and the presence of reputable arbitral institutions make it an attractive venue for arbitration. While the process is generally efficient and enforceable, parties should be mindful of the specific rules governing evidence, confidentiality, and appeals. By understanding the nuances of Chilean arbitration, parties can make informed decisions and effectively manage their dispute resolution strategies.
