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Chile

Published on Wednesday 18th April 2018

    Legislation

    • Chile

      In Chile, the enforcement of international commercial arbitration awards and arbitral agreements in international business contracts, and international commercial arbitration proceedings is governed by:

      • the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1975);
      • the Panama Inter-American Convention on International Commercial Arbitration (1976);
      • the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965);
      • bilateral treaties for the protection of investments with several countries;
      • free trade agreements with different countries;
      • articles 423 onwards of the Private International Law or Bustamante Code;
      • articles 242 onwards and 628 onwards of the Chilean Civil Procedural Code;
      • articles 222 onwards of the Chilean Courts Statute Code;
      • Decree-Law No. 2,349 of 1978 for public entities entering into international contracts; and
      • Law No. 19,971 of 2004 on international commercial arbitrations.

      We are not aware of any pending proposal in our legislature to modify the above-mentioned national laws.

      Last verified on Tuesday 6th March 2018

    • Chile

      Yes, the UNCITRAL model arbitration law has been adopted in Chile through Law No. 19.971.

      The only significant variation from the model text relates to the interim measures, since Law No. 19,971 sets out that unless otherwise agreed by the parties, the arbitral tribunal may require the party requesting an interim measure to provide appropriate security in connection with the measures.

      Last verified on Tuesday 6th March 2018

  • Conventions

  • Commercial arbitral agreements and arbitrability

    • Chile

      Under Chilean Law (specifically under article 7 of Law 19,971) a pre-dispute arbitration clause or a separate agreement to resolve international commercial disputes is enforceable.

      For their validity, Chilean law only requires that an arbitration agreement must be in writing, that is, contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication that provide a record of such agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another.

      The reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement in writing, provided that the reference is such as to make that clause part of the contract.

      There is no need for any post-dispute compromise.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 requires: (i) an express agreement to submit to arbitration certain disputes that have arisen or may arise between the parties (taking such agreement the form of an arbitration clause in a contract or a separate agreement), and (ii) an arbitration agreement in writing (see question 5).

      Last verified on Tuesday 6th March 2018

    • Chile

      Under Chilean law, matters that usually are not legally subject to arbitration are criminal law, family law, labour law, antitrust, class actions in consumer law and matters in which the State of Chile has interest.

      Last verified on Tuesday 6th March 2018

    • Chile

      To enter into an agreement to arbitrate in Chile, it needs a treaty with the country that the national of that country wants to engage into arbitration, such as the bilateral investment treaties – executed between Chile and various countries – that refers the parties to the ICSID as an alternative of the local courts.

      Last verified on Tuesday 6th March 2018

    • Chile

      Pursuant to article 28 of Law No. 19,971 an arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so. In any case, an arbitral tribunal shall decide always in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 limits party autonomy with respect to the terms of an arbitral agreement in the following cases: (i) unless otherwise agreed by the parties, the number of arbitrators shall be three, or (ii) point 3(a) of article 10 allows the Court of Appeal to intervene when there is no agreement among the parties in the appointment of the third member of the arbitral tribunal or to designate the sole arbitrator in the same event.

      In turn, there is no limitations for the parties under Chilean law to specify the arbitral institution of their choice nor to seat in a foreign jurisdiction.

      Last verified on Tuesday 6th March 2018

    • Chile

      In general terms, a non-signatory to an arbitral agreement is not authorised to pursue a claim in an international arbitration against a party that signed the arbitral agreement. The foregoing is notwithstanding cases of subrogation, merger, succession or assignment.

      Last verified on Tuesday 6th March 2018

    • Chile

      In general terms, a non-signatory party to an arbitral agreement cannot be constrained to arbitration, except on the same cases mentioned above. However, in the case Servicios Financieros Altis S.A. con Grupo Casa Saba S.A.B. de C.V. (Decision 1886-2011), the Court of Appeals extended the arbitral agreement to a third party, by the stipulation of a benefit for non-signatory in the pre-dispute contract.  

      Last verified on Tuesday 6th March 2018

    • Chile

      In general terms, contractual waivers precluding arbitration of claims are enforceable. However, there are some matters that are required by law to be decided by an arbitrator (article 228 of the Chilean Courts Statute Code).

      Last verified on Tuesday 6th March 2018

  • Arbitral institutions and arbitrators

    • Chile

      An arbitral award issued in an arbitration seated in Chile – even under the auspices of a foreign institution – can be vulnerable to challenge only under the rules provided by article 34 of Law No. 19,971. Therefore, it cannot be challenge because it was issued under the auspices of a foreign institution.

      Last verified on Tuesday 6th March 2018

    • Chile

      Unless otherwise agreed by the parties, nationality is not a requirement to be an arbitrator. But when the court is allowed to appoint a third arbitrator it will take into account the advisability of appointing an arbitrator of a different nationality from the parties. 

      Last verified on Tuesday 6th March 2018

    • Chile

      The arbitrators must be independent and impartial.

      Article 12 of Law No. 19,917 sets out that: (i) when a person is approached in connection with his possible appointment as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties unless they have already been informed of them by him or her, and (ii) an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence, or if he or she does not possess qualifications agreed to by the parties.

      A party may challenge an arbitrator appointed by him or her, or in whose appointment he or she has participated, only for reasons of which he or she becomes aware after the appointment has been made.

      In its turn, article 13 authorises to challenge an arbitrator who does not comply with the above. As well, the parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of paragraph 3° of article 13.

      Failing such agreement, a party who intends to challenge an arbitrator shall, within 15 days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in article 12, send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his or her office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. 

      Last verified on Tuesday 6th March 2018

    • Chile

      Courts can entertain a request to disqualify an arbitrator when a challenge under any procedure agreed upon by the parties or under the procedure of article 13 is not successful. The challenging party may request, within 30 days of receiving notice of the decision rejecting the challenge, that the president of the Court of Appeal of the place where the arbitration must be followed decide on the justification of the challenge. Such decision is not subject to appeal. While such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award.

      Last verified on Tuesday 6th March 2018

  • Arbitral proceedings

    • Chile

      According to article 22 of Law No. 19,971, the parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine the language or languages to be used in the proceedings. This agreement or determination shall apply to any written statement by a party, any hearing and any award, decision or other communication by the arbitral tribunal.

      The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 does not prohibit a foreign lawyer from serving as advocate in international commercial arbitrations. However, in the case of national arbitrations, foreign lawyers cannot serve as advocates in arbitral proceedings.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 does not impose confidentiality in arbitration. However, the confidentiality agreed in the procedure (if any) will be breached if the case is brought to the courts.

      Notwithstanding the foregoing, there are institutions that guarantee absolute privacy in national and international arbitration.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 has no specific rules on this matter. However, article 12 states that an arbitrator, from the time of his or her appointment and throughout the arbitral proceedings, shall without delay disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence to the parties unless they have already been informed of them by him or her.

      Last verified on Tuesday 6th March 2018

    • Chile

      For international arbitrations, there are no mandatory rules. However, for domestic arbitrations where the parties have not waive such oath, witnesses testifying must swear to tell the truth (article 223 of the Chilean Courts Statute Code and article 628 onwards of the Civil Procedural Code). 

      Last verified on Tuesday 6th March 2018

    • Chile

      For international arbitrations, there are no restrictions. However, for domestic arbitrations witnesses may give their testimony in a prejudicial manner – prior to filing a lawsuit – provided that serious hindrances might prevent to give such testimony opportunely during the trial (article 286 of the Chilean Courts Statute Code). 

      Last verified on Tuesday 6th March 2018

  • Court support for arbitration

    • Chile

      Article 16 of Law No. 19,917 states: that the arbitral tribunal may rule on its own jurisdiction – including any objections – with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause that forms part of a contract shall be treated as an agreement independent of the other terms of the contract.

      A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

      The arbitral tribunal may rule either as a preliminary question or in an award on the merits.

      The challenging party may request, within 30 days after having received notice of the decision rejecting the challenge, to the president of the Court of Appeal of the place where the arbitration must be followed, to decide about the justification of the challenge. While such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings even rendering an award.

      Therefore, the principle of Kompentenz-Kompetenz is followed in the courts.

      Last verified on Tuesday 6th March 2018

    • Chile

      As answered above, a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. Therefore, the courts follow the independence and separability of the arbitration clause.

      Last verified on Tuesday 6th March 2018

    • Chile

      Arbitral tribunals are empowered to grant interim relief (article 17 of Law 19,791), unless otherwise agreed by the parties. However, the arbitral tribunal may require the party requesting an interim measure to provide appropriate security in connection with the measure.

      These measures have to be enforced by the courts.

      Last verified on Tuesday 6th March 2018

    • Chile

      An arbitrator can issue orders or compel the production of evidence by a third party. However, to enforce such orders and measures the arbitral tribunal must request the assistance of the courts (article 635 of the Chilean Civil Code: when the performance of the arbitral proceeding requires the use of a compulsory process or when it affects third parties, the arbitral tribunal shall defer to the ordinary courts requesting their assistance).

      Last verified on Tuesday 6th March 2018

    • Chile

      The arbitral tribunal or a party – with the approval of the arbitral tribunal – may request from competent court assistance in taking evidence, including an order aimed to a witness to testify. Under our jurisdiction witnesses cannot “produce” documents, but just “exhibit” documents in their possession or control.    

      The court may execute the request within its competence and according to its rules on taking evidence.

      Last verified on Tuesday 6th March 2018

    • Chile

      Article 9 of Law No. 19,971 states that it is not incompatible with an arbitration agreement for a party to request from a court, before or during arbitral proceedings, an interim measure of protection, and for a court to grant such measure.

      Last verified on Tuesday 6th March 2018

    • Chile

      Pursuant to article 34 (4) of Law No. 19,971, when asked to set aside an award for being null and void the Court of Appeals may, where appropriate and so requested by a party, suspend the setting-aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion shall eliminate the grounds for setting aside.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law 19,971 does not provide such interest. But, in the process of enforcement of the award, the prevailing party may request to the courts the post-award interest accrues from the moment it filed the request until the award is effectively paid.

      Last verified on Tuesday 6th March 2018

    • Chile

      The arbitral tribunal is not empowered to award punitive or exemplary damages, but it is empowered to award interest, if requested by the prevailing party. Compensation of punitive or exemplary damages is not recognised by Chilean law.

      Last verified on Tuesday 6th March 2018

  • Awards - content

    • Chile

      Pursuant to article 34 of Law 19,971, the grounds for challenging an international award rendered in an arbitration are the following:

      If a party establishes that: (i) a party to the arbitration agreement referred was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this state; (ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration the validity of the arbitration agreement under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made, and (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.

      Furthermore, this also applies if the court finds that the arbitration agreement and the dispute are not arbitrable matters under Chilean law or the award contravenes Chilean public policy.

      Such application should be made before the respective Court of Appeal.

      According to article 34 of Law No. 19,971, an application for setting aside an international arbitration award may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under article 33, from the date on which that request had been disposed of by the arbitral tribunal.

      The court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting-aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion shall eliminate the grounds for setting aside.

      Last verified on Tuesday 6th March 2018

    • Chile

      We do not have information about an international arbitration award rendered in Chile under Law No. 19,971, having been vacated on the grounds of public policy.

      The national jurisprudence has interpreted the concept of public policy in a very narrow and restricted (for example, Decisions 6615-2007, 9134-2007, 1420-2010, 1971-2012 and 9211-2012 have followed these criteria).

      Last verified on Tuesday 6th March 2018

    • Chile

      Two cases about annulment of international awards rendered in Chile are worth noting: (i) Decision 2363-2010 in which the Court of Appeals of Santiago stated that Law No. 19.971 only contemplates the recourse of nullity to challenge an international award; and (ii) Decision 9134-2007, in which the Courts of Appeals of Santiago refused the recourse of nullity against an international award because the documents that served to determine the amount of damages in the international award were known by the challenging party.

      Last verified on Tuesday 6th March 2018

    • Chile

      Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only as explained in question 46.

      If an application for setting aside or suspension of an award has been made to a court referred to in (1)(a)(v) mentioned, the court where recognition or enforcement is sought may, if it considers it proper, adjourn its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the other party to provide appropriate security.

      Last verified on Tuesday 6th March 2018

  • Awards enforcement

    • Chile

      An arbitral award shall be recognised as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of articles 35 and 36.

      The party relying on an award or applying for its enforcement shall supply the original award or a copy thereof. If the award is not made in an official language of Chile, the court may request the party to supply a translation thereof into such language.

      According to articles 242 and onwards of the Chilean Civil Procedural Code, the process begins with an application – exequatur – filed before the Supreme Court claiming its recognition and enforcement in Chile, with certification of the authenticity and effectiveness of the award from a competent court of the place where it was rendered.

      The other party shall be notified and will be requested to answer the petition within a fixed time. The Court’s Judicial Attorney (Fiscal de la Corte Suprema) is also required to inform.

      In the absence of a response from the respondent in due time, the Supreme Court will assess that: (i) the award does not contravene Chilean public policy nor oppose Chilean jurisdiction; (ii) that the respondent was duly notified; and (iii) the sentence has been enforced according to law of the state that pronounced it. The Supreme Court may order to open a proof period. The decision made by the Supreme Court is not challengeable. The award shall be enforced by the competent tribunal in Chile.

      Last verified on Tuesday 6th March 2018

    • Chile

      Law No. 19,971 recognises arbitral awards, whether the award is covered by a convention or not, because the Law makes no distinction.

      Once the foreign arbitration award has been recognised, it shall have the same status as any national award.

      The enforcement process could take at least six months to run its full course if all requirements (set answer 53) are accomplished, the losing party does not challenge the award and the Supreme Court does not open a proof period.

      Last verified on Tuesday 6th March 2018

    • Chile

      The recognition for a foreign judgment, under the conditions stated above, could take at least up to three months.

      Then, to enforce the domesticated foreign judgment on a latter procedure (juicio ejecutivo), if the party does not object the homologation, it could take at least up to three months more. 

      Last verified on Tuesday 6th March 2018

    • Chile

      The Supreme Court granted enforcement to the following foreign arbitral awards, among others: (i) Maw Mauro Stubrin v Sociedad Inversiones Morice (Decision No. 660-20105);( ii) Comverse Inc c/ American Telecommunication, Inc Chile SA (Decision No. 3225-2008); (iii) Kreditanstalt Für Wiederaufbau v Inversiones Errázuriz (Decision No. 5228-2008); and (iv) Stemcor UK Limited and Compañía Comercial Metalúrgica Limitada (Decision No. 1724-2008).

      From these decisions, we can extract some criterion of the Supreme Court to enforce of foreign arbitral awards: the exequatur procedures cannot revise the awards’ merits and the grounds for denying an exequatur are limited.

      Last verified on Tuesday 6th March 2018

  • The outlook

    • Chile

      As it is more than 10 years since the enactment of Law No. 19.971 and taking in account the decisions described in question 56, it follows that Chile is respectful of the international treaties and of the awards granted by international arbitration.

      As to advice for a foreign lawyer, the help of a local lawyer should be considered to comply with the requirements of Law No. 19.971 and successfully negotiate other Chilean laws.

      Last verified on Tuesday 6th March 2018

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