1.1 Describe the prevalence of commercial arbitrations as a method of settling disputes, both domestic and international.
Arbitration is currently, at both the domestic level and internationally, the most popular method of settling major commercial disputes thanks to the advantages it offers compared with the courts of law. These advantages lie mainly with its greater speed, procedural flexibility, arbitrators’ greater expertise and confidentiality. Most commercial contracts made in Chile include arbitration clauses, national or international, depending on the type of contract involved.
National arbitration has been greatly bolstered by the activities of the Arbitration and Mediation Center of the Santiago Chamber of Commerce (CAM or CAM Santiago) and the Arbitration and Mediation Center of the Chilean-American Chamber of Commerce (AmCham), which have standardised procedures and fees and keep renowned arbitrations among their corps.
International arbitration as a method for dispute resolution has been gaining greater relevance lately thanks to the opening of the Chilean economy to international trade and investments, the execution of several free-trade and investment promotion and protection agreements, as well to the recent enactment of Law Nr 19971 on International Commercial Arbitration (Law Nr 19971), patterned on the Model Law of the United Nations Commission on International Trade Law (UNCITRAL). References to ‘international arbitration’ are to be understood as arbitration procedures conducted in Chile and governed by this law.
2.1 What are the principal sources of law and regulation relating to domestic and international arbitration? (Describe the role of federal or state laws and relevance of court decisions.)
Chile is a unitary republic and therefore has no federal law. In Chile, there is only one law that applies throughout the national territory.
Within the scope of national arbitration, procedures are governed mainly by the rules found in the Code of Civil Procedure (arts 628–666).
In their court capacity, national arbitrators are also regulated by the Chilean Courts Statute (arts 222–243).
With regard to arbitration in the international scenario, the main sources are the various international treaties and conventions signed by Chile (referred to in section 2.2 below) and the recently promulgated Law Nr 19971.
As to the relevance of court precedents, Chile is not a country based on the case law system and therefore the rationale behind the decisions made by a court are not binding on other cases. In spite of this, the jurisprudence of the Supreme Court does play a significant role, both as a yardstick for interpreting norms as well as a guideline in efforts to unify dispute resolution criteria.
2.2 List and briefly describe relevant arbitration statutes, international treaties and conventions.
Chile has ratified and given force of law to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention (since 1975), which in art 1(1) and (2) provides that the decisions to which this recognition and enforcement convention applies are those issued by permanent or ad hoc arbitration courts; the Inter-American Convention on International Commercial Arbitration, commonly known as the Panama Convention (since 1976), which in art 1 refers to arbitration courts as valid instances to which the parties mat resort to resolve their commercial disputes. Chile is also a member of the International Centre for Settlement of Investment Disputes (ICSID) (since 1992). Chile also recognises the Code of International Private Law, known as the Bustamante Code (1934), which recognises foreign court decisions in Chile, regardless of the nature of arbitration, and Law Nr 19971 on International Commercial Arbitration – patterned on the UNCITRAL Model Law – has been in force since October 2004.
3.1 What are/describe the principal institutions and/or government agencies that assist in the administration or oversight of international and domestic arbitrations?
There are two main arbitration institutions, both private: the Arbitration and Mediation Center of the Santiago Chamber of Commerce (CAM) and the Arbitration and Mediation Center of the Chilean-American Chamber of Commerce (AmCham).
The CAM was created in 1993 and focuses on arbitration and mediation; its arbitrators are renowned in legal and business circles, elected by the CAM Council, which makes sure that procedural and ethical rules are complied with. It provides assistance and advice throughout arbitration proceedings, prepares national and international arbitration- and mediation-related studies and publications, and keeps a record of the decisions made by CAM arbitrators.
AmCham administrates and facilitates arbitration and mediation procedures to resolve national and international commercial disputes. This service is provided to anyone who requests it, whether Chilean or foreign citizens. It has its own bylaws and regulations based on UNCITRAL models. It receives organisational and operational support and backing from the American Arbitration Association, as well as from the Chilean Ministry of Justice.
Additionally, we must highlight the pivotal role of the Supreme Court in relation to national arbitration procedures, with regards to complaint remedies. Complaint remedies are extraordinary pleas against all rulings that end a case or make further substantiation impossible (provided no ordinary pleas are applicable), and are claimed to have been the result of serious breaches or abuses of procedure. The Supreme Court may revise these rulings and sanction the judges who issued them.
4.1 What is the relationship between agreements to arbitrate and access to the courts? Is there a presumption of arbitrability/policy support for arbitration? Will the courts stay court actions in favour of agreements to arbitrate?
In Chilean law there is no presumption of arbitrability or special rules to favour arbitration over the regular courts of law.
Arbitration is extraordinary and therefore not presumed. But if an arbitration clause is agreed upon, the parties are understood to have removed the matter from the sphere of the courts of law, and there is a tendency to recognise the validity and effects of such clauses.
In this sense, the agreement to refer a dispute to an arbitrator has an important procedural impact on the parties because this makes them no longer subject to the jurisdiction of the courts of law in their mutual relations. However, the loss of jurisdiction by the courts of law cannot be declared ex officio by the judge, ie it must be invoked by the parties, who may also waive it at any time by mutual agreement.
The Supreme Court has held that the arbitration agreement and dispute resolution clause have an important effect in common: the arbitration defence, namely, the right of a party which entered into a pre-existing arbitration agreement to be tried by an arbitration court, not by others, filing this defence if summonsed to appear before any other court, in order to have this improper service of process remedied.
It should be noted that, in Chilean law, there is a difference between an arbitration agreement and a dispute resolution clause. Both are arbitration conventions whereby the parties remove certain present or future litigation from the cognisance of the ordinary courts of law and refer them to arbitrators. The difference lies in that, in arbitration agreements, the arbitrators to whom the dispute will be referred are actually appointed; the dispute resolution clause contains no such appointment – it merely sets forth the parties’ obligation to designate the arbitrators in a subsequent act.
4.2 May an arbitral tribunal rule on a party’s challenge to its own jurisdiction (‘competence-competence’)? Need a tribunal suspend its proceedings if a party seeks to test jurisdiction in the courts?
There is no uniform rule that applies to both national and international arbitrations. Therefore, distinctions must be drawn between these two spheres.
There are no positive rules of law governing this issue in national arbitration, because it depends on the scope of competent jurisdiction that the parties may establish.
Majority doctrine holds that an arbitrator has no authority to decide on his or her own competence, mainly in the sense that if he or she declares him or herself as lacking in jurisdiction (this doctrine also holds that there is no difference between jurisdiction and competence in arbitral matters), any resolution in this regard will be void because it would have been issued by someone who – on his or her own admission – is not a judge. This doctrine contends that the courts of law are the ones to decide on the arbitrator’s competence. The law also does not contemplate the suspension of proceedings.
However, if the parties decide to conduct arbitration under standard procedures such as CAMs, they must adhere to these rules, which generally establish that the arbitrator will be competent to decide on his or her own competence and on the validity or existence of the arbitration agreement.
For international arbitration, art 16 of Law Nr 19971 expressly authorises the arbitrator to decide on his or her own competence.
Any party dissatisfied with this decision may ask that the President of the relevant Court of Appeals to decide on the matter, and his or her ruling will be final.
As long as the matter is being decided by the President of the Court of Appeals, the arbitration court may continue the proceedings and issue an award. This is a right, not an obligation, ie it may also suspend proceedings until a ruling is issued regarding the arbitrator’s competence.
5.1 Provide a selected bibliography of the most influential publications in or relied upon in the jurisdiction – books, journals, newsletters and pamphlets.
Books
P Aylwin El Juicio Arbitral (Santiago: Impresión Salesianos Bulnes, 1982) E Paillas El Arbitraje Nacional e Internacional Privado (Santiago: LexisNexis, 2003) D F Hernández Impugnabilidad en Chile de las decisiones Arbitrales
Internacionales (Santiago: Jurídica La Ley, 2001)
E P Albónico Arbitraje Comercial Internacional (Santiago: Jurídica, 2005)
C A M Santiago Sentencias Arbitrales (Santiago: Salesianos SA, 2001)
6.1 Are there form and/or content requirements for an enforceable agreement to arbitrate? How may they be satisfied?
As to the formal requirements for an arbitration agreement, art 234 of the Chilean Courts Statute only requires that the arbitrators be appointed in writing. There has been discussion on the nature of this requirement, ie whether commitment to writing is an official requirement (the absence of which makes the agreement void) or an evidential requirement. Although no laws provide that non-written agreements are void, majority doctrine holds voidance to be the appropriate sanction.
As to the type of document, legal theory and jurisprudence say that an instrument of private record is sufficient.
Content requirements of the arbitration agreement are also determined by art 234 of the Chilean Courts Statute, namely, (a) first and family names of the parties, (b) first and family names of the appointed arbitrator (but the parties may leave this designation pending), (c) the matter referred to arbitration and
(d) the authority of the arbitrator, and the time and place for exercising this authority. The first three requirements are of the essence, ie their absence renders the agreement void. As to the name of the arbitrator, art 232 of the Chilean Courts Statute provides that if the parties do not agree (if they postponed the appointment), the ordinary courts may appoint the arbitrator.
If the parties do not vest the arbitrator with specific powers, or do not indicate the place and time for arbitration to be substantiated, the law provides that the arbitrator is de jure, that the procedure must be conducted in the place where the agreement was executed, and that the arbitrator will have a two-year term from the date of acceptance to complete his or her assignment (art 235 of the Chilean Courts Statute).
Chilean law provides for certain types of mandatory arbitration. These cases are mostly indicated in art 227 of the Chilean Courts Statute, as follows:
Notwithstanding the above, there are special rules that determine other cases of mandatory arbitration, such as Law Nr 18690 on bonded warehouses.
7.2 Is arbitration prohibited for certain types of dispute (restraints of fundamental public policy)?
Arbitration is prohibited for the following disputes:
8.1 May an arbitral clause be considered valid even if the rest of the contract in which it is embedded is invalid?
There is no legal rule for national arbitration in this regard, and one must thus process on a case-by-case basis. However, majority doctrine holds that the arbitration clause (not the arbitration agreement) is a contract with its own, independent juridical physiognomy, and in this sense the Supreme Court has held that the arbitration clause is in itself a lawful, self-contained contract. It follows that the validity of the arbitration clause is independent from the validity of the broader contract that contains it.
With regard to international arbitration, art 16(1) of Law Nr 19971 expressly provides that the arbitration clause will be considered severable from the broader contract that includes it, hence the nullity of such broader contract does not entail the ipso jure nullity of the arbitration clause.
9. QUALIFICATION/APPOINTMENT/LIABILITY OF ARBITRATORS
9.1 Are there specific provisions regulating the qualifications of arbitrators? Are there requirements (including disclosure) for ‘impartiality’ and ‘independence’, and do such requirements differ as between domestic and international arbitrations?
Two types of requirements must be met to be a national arbitrator: (i) those related to qualifications; and (ii) those related to impartiality and independence.
Qualification requirements are: (a) being of legal age (except for attorneys, who may exercise this position regardless of age); (b) being of sound mind (general rule of civil competency); (c) being able to read and write; and (d) in the case of arbitrators de jure, they must be attorneys at law and, according to art 526 of the Chilean Courts Statute, only Chileans may be attorneys at law.
As to impartiality and independence, national arbitrators are subject to the same rules on implications and challenges as ordinary judges. Both implications and challenges are grounds that bar a judge from taking cognisance of any given case for lacking the necessary impartiality. Notwithstanding the above, implications are more serious than challenges. Implications are established for public policy reasons, whereas challenges are for the benefit of the parties. This is why implications are effective by operation of law (they must be declared ex officio by the court), whereas challenges are only effective if invoked by the parties.
In international arbitration matters, Law Nr 19971 says the arbitrator is required to disclose all the circumstances that could somehow affect his or her impartiality or independence, without mentioning any specific grounds. This obligation is incumbent upon the arbitrator from the time he or she is advised of his or her prospective appointment and throughout the arbitration proceedings.
9.2 Are there provisions governing the challenge or removal of arbitrators? Do the courts or other jurisdictions play/have a role in any such challenge?
There are several provisions governing the removal of arbitrators.
In Chile, unlike in other legal systems, there is a difference between implications and challenges, set forth in arts 195 and 196 of the Chilean Courts Statute, respectively. As mentioned in section 9.1 above, despite both these circumstances being incompetence defences, there is a materiality difference between them. The former are statutory prohibitions that prevent judges from intervening in certain matters, whereas the latter are mechanisms that the parties are given to protect the impartiality of judges. Consequently, implications must be declared ex officio by the court, whereas challenges may only be invoked ex parte.
Arbitrators are, as a general rule, subject to both implications and challenges.
There is an exception to the above rule in the case of arbitrators. Since they are designated by the parties, arbitrators are considered worthy of their confidence, and hence if they appoint them knowing that there are grounds for challenging them, the parties are deemed to waive such grounds. Therefore, only grounds for challenge that occur after the designation may be claimed, or else those arising contemporaneously with the designation if the party who appointed the arbitrator was not aware of them at the time. It should be noted that if the arbitrator is appointed by a judge, this restriction on challenges does not apply, and any challenges may then be raised by the parties.
The above applies both in the national and in the international spheres.
In the national sphere, with regard to the role of the courts, we must differentiate between an implication and a challenge. In the first case, the Court of Appeals acts as the higher court in case the resolution that dismisses an implication charge is appealed from (which was issued by the same arbitrator against whom it is asserted). In the second case, the ordinary judge of the place where the case was brought is in charge.
The CAM and AmCham regulations also include provisions for the removal of arbitrators. Article 10 of the CAM regulations says that arbitrators directly appointed by the parties may be lawfully removed on statutory implications or challenges. For arbitrators designated under a mandate granted to the CAM, the parties may also request that the arbitrator be removed within six days from receiving the appointment notice. In turn, art 11 of the AmCham regulations provides that the parties may challenge an arbitrator when they have justified doubts about his or her impartiality or independence. The term for filing said challenge is 15 days from the arbitration designation notice.
9.3 Does legislation govern, or have the courts developed rules regarding the liability of arbitrators for acts related to their decision-making function?
In Chile, the liability of judges is recognised by the Constitution. Article 84 of the Constitution says: ‘Judges are personally liable for any bribery, breach of procedural rules and, generally, for any malfeasance of office or miscarriage of justice.’ Arbitrators are no exception to this rule.
Accordingly, arbitrators are exposed to four kinds of liability: criminal liability for any offences they commit; tort liability for any fraudulent or negligent acts that cause harm to the litigants; administrative liability for any breaches or abuses they commit; and civil contractual liability for their breach of the obligation imposed by the arbitration agreement. Only the first three affect the arbitrator as judge by operation of law; the fourth affects him or her as party to the arbitration agreement.
10. PARTY REPRESENTATION
10.1 Are there particular qualification requirements for representatives (‘counsel’) appearing in the jurisdictions?
Chilean laws do not have specific requirements for the parties’ counsel in arbitration proceedings. They need only be attorneys licensed to practice law and for this, among other things, they need to be Chilean citizens. This is the general rule and therefore, as well as for arbitration cases, this also applies in cases where disputes are brought before the courts of law.
11. PLACE OF ARBITRATION/PROCEDURES
11.1 Are there provisions governing the place (seat) of arbitration, or any requirement for arbitral proceedings to be held at the seat?
There are no binding rules governing the venue or seat of arbitration. In both national and international arbitration, the law allows the parties to select the place where arbitration will be held. In the parties’ silence, there are certain differences.
For national arbitration, art 235(2) of the Chilean Courts Statute provides that the venue of arbitration will be the place where the arbitration agreement was signed.
For international arbitration, art 20 of Law Nr 19970 provides that the determination of the seat of arbitration will be decided by the parties and if they do not agree on it is at the discretion of the arbitration court, which must bear in mind the specific circumstances of each case. The court is also authorised to convene anywhere it considers adequate to deliberate and receive evidence, unless the parties agree otherwise.
11.2 Are specific procedures mandated in particular cases, or in general?
In the case of national arbitration, art 233 of the Chilean Courts Statute provides the type of procedure to be following, differentiating among three types of arbitrator: arbitrator de jure, arbitrator ex aequo et bono (arbitrador) and combined arbitrator.
In the case of arbitrators de jure, the same rules of procedures applicable for ordinary judges apply here as well, depending on the nature of the action. Note that the generally applicable procedure (known as juicio ordinario) is regulated by art 253ff of the Code of Civil Procedure. The parties may introduce modifications to these rules, waiving some filings or terms, provided they do not materially alter the procedure as set out in statute.
If the case of arbitrators ex aequo et bono, the procedure is established by the parties in the arbitration agreement itself; in their silence, the basic rules contained in art 636ff of the Code of Civil procedure apply.
As regards the procedures for combined arbitrators, the same rules that govern for arbitrators ex aequo et bono apply here as well.
In addition to these general rules, the law contemplates some special procedures or rules for arbitration in certain matters. One of these cases is the partition of decedent estates (subject to mandatory arbitration). Another example is the lease of urban real estate. In this case there is a special law (Law Nr 18010) that calls for a procedure that the lessee cannot waive. Therefore, it has been understood that in lease claims, the arbitrator may only be de jure and is required to apply the special procedure set forth in that law.
In the case of international arbitration, art 19 of Law Nr 19971 provides that, subject to this law, the parties will be free to determine the procedure and, in the absence of any consensus, the arbitration court may direct the procedures as it deems fit.
12. EVIDENCE GATHERING
12.1 What is the general approach to the gathering and tendering of evidence at the pleading stage and at the hearing stage (production, discovery, privilege, use of witness statements etc)? Are there differences between domestic and international arbitrations?
In Chilean law, there is a procedural principle according to which the gathering, production and tendering of evidence is up to the parties’ discretion. As a general rule, both ordinary judges as well as arbitrators lack the power to generate evidence other than as requested by the parties. The exception to this rule is the judges’ authority to order, ex officio, the inclusion of certain evidence within the period reserved for issuing the award, known as ‘medidas para mejor resolver’.
Note that in the case of arbitrators ex aequo et bono, the law authorises them to take the steps they deem necessary better to appreciate the facts (art 637 of the Code of Civil Procedure).
It is important that Chilean procedural law does not provide for a discovery process as in other jurisdictions, and that the procedure clearly distinguishes between the pleading stage and the hearing stage. Chilean law only contemplates one special case of mandatory production of documents in the possession of the other party or of a third party, which the court may require provided the documents are directly related to the dispute and are neither secret nor confidential (art 349 of the Code of Civil Procedure).
With regard to the pleading stage, the parties are not required to produce evidence, but they are entitled to submit all documents they consider relevant or make reference to them or to other evidence they intend to submit at a subsequent stage of the case. This rule applies to both national and international arbitration.
With regard to the hearing stage, the law also does not provide for substantial differences between the rules of national arbitration and those applicable to cases brought before ordinary courts.
The means of evidence of in either case are the same as indicated in the Code of Civil Procedure, ie documents, witness testimonies, ex parte confessions, personal inspection by the court, expert reports and presumptions. The parties to the arbitration may limit the means of evidence.
Regarding the weighing of evidence, there is a difference between arbitrators de jure and ex aequo et bono. In the first case, the rules of evidence provided in the Code of Civil Procedure for ordinary judges apply, whereas in the second it is the arbitrator who weighs the evidence in equity, using his or her good judgment.
With regard to international arbitration, both the determination of admissible evidence and its production and weighing by the court depend on the governing law elected by the parties.
Law Nr 19971 does not contemplate any material differences re national arbitration in matters of evidence. One difference we can mention is that art 26 authorises the court to appoint one or more experts to report on specific matters, unless the parties agree otherwise.
12.2 What powers of compulsion or court assistance are there for arbitrators to require attendance of witnesses or production of documents, either prior to or at the substantive hearing? Is there a difference between domestic and international tribunals or as between parties and non-parties? Do special provisions exist for arbitrators appointed pursuant to international treaties (ie bilateral or multilateral investment treaties)?
Arbitrators have no powers of compulsion to enforce their resolutions. Consequently, whenever compulsion is required, one must resort to the court system. This rule applies for all acts of arbitration, including witness testimonies and the production of documents. Therefore, the law provides that when a witness refuses to declare voluntarily before a court of arbitration, it must resort to an ordinary court to conduct this procedure, submitting the necessary documentation (art 633 of the Code of Civil Procedure).
The situation is similar in international arbitration. Article 27 of Law Nr 19971 provides that the court of arbitration or any of the parties with the court’s approval, may seek assistance with a competent Chilean ordinary court to gather evidence and, in such case, the ordinary court may tend to that petition within the purview of its authority and in accordance with the rules to which it is subject in matters of evidence.
13. INTERIM MEASURES/ROLE OF THE TRIBUNAL
13.1 Are there special provisions relating to the granting of interim and preliminary relief? Have the courts recognised and/or limited any such authority? Do the courts themselves play a role in interim relief in arbitration proceedings?
Chilean procedural laws do not provide for preliminary relief. Only exceptionally may the judge accept the suit on an interim basis, in the case of summary proceedings, which are special, fast-track claims. This general rule applies to both the ordinary courts of law as well as to arbitration.
With regard to injunctions, the general rule is that arbitrators are fully competent to grant them. Notwithstanding the above, this competence is shared with the ordinary courts, which intervene in three cases:
14. TAXATION OF ARBITRATORS’ FEES
14.1 Does the state, or any of its sub-divisions, purport to tax domestically the fees of foreign arbitrators conducting hearings in the state? Is there a difference if the arbitration is ‘seated’ in the state or elsewhere?
Chilean law makes no difference between arbitrators and other foreigners who work or reside in Chile. Generally, individuals who neither reside nor are domiciled in Chile are subject to taxation on their Chilean-source income, ie that originating in assets located in Chile or activities conducted therein. This is called ‘additional tax’ and is currently levied at 35 per cent. The above is notwithstanding any provisions under current treaties to prevent international double taxation.
15. DEFAULT PROCEEDINGS
15.1 Are there provisions governing a tribunal’s ability to determine the controversy in the absence of a party who, on appropriate notice, fails to appear at or seek adjournment of the arbitral proceedings?
As a general rule for both national and international arbitration, the procedure may be conducted even in the absence of one of the parties.
However, this rule varies depending on which party is absent. If the absentee is the defendant, proceedings may run their course without his or her presence. If the claimant does not file its suit within the term agreed by the parties or determined by the court of arbitration, the latter must declare the case closed. In other words, proceedings may not be followed in the claimant’s absence.
16. THE ARBITRAL AWARD
16.1 Must an award take any particular form, eg in writing, signed, dated, place, the need for reasons, delivery etc?
In the case of national arbitration, a distinction must be made. As far as arbitrators de jure and combined arbitrators are concerned, they are subject to the provisions common to all proceedings and the award must be stated in writing, indicating the date stated in letters and place of the issue, and contain the signature(s) of the arbitrator(s) who issued the same, and also comply with the requirements of art 170 of the Code of Civil Procedure, which is the common rule for final rulings issued by ordinary judges.
In the case of arbitrators ex aequo et bono, the law requires that the award be in writing and contain the date and place of issue and the arbitrator’s signature, in addition to a certification by a notary or two witnesses. Content requirements are less stringent than for arbitrators de jure and are enumerated in art 640 of the Code of Civil Procedure.
For international arbitration, art 31 of Law Nr 19971 provides that the award must be in writing and signed by the arbitrator(s), as applicable. The law also states that the award must state reasons unless otherwise agreed or settled. It must include the date of issue and the venue of arbitration. The award is deemed to have been issued in that venue.
16.2 Are there limits on arbitrators’ powers to fashion appropriate remedies, eg punitive or exemplary damages, rectification, injunctions, interest and costs?
As a general rule, national arbitrators have the same powers as ordinary judges to decide on the matters submitted to their consideration, and they may therefore decree any type of remedies, decree injunctions, demand payment of costs or apply adjustments or interest. One should note that Chilean law does not recognise punitive damages. The only restrictions to the arbitrators’ powers are the matters barred from arbitration and the lack of powers of compulsion to enforce their awards.
In international arbitration, the arbitration court’s powers depend on the law that applies to the merits of the case.
17. RECOURSE FROM AN AWARD
17.1 Are there provisions governing modification, clarification or correction of an award?
In both national and international arbitration, the parties are entitled to petition the court to revise the award for any calculation, copying or typological error or any similar mistake, and the court also has the requisite powers to proceed likewise ex officio. The parties may also ask the court to clarify any point or part of the award. Moreover, the parties to international arbitration may ask the arbitration court to issue a new award in relation to claims filed in the arbitration pleadings and that were left out of the award. The term to file this petition is 30 days from receipt of the award. The term to issue the new award, if the court considers that there is sufficient ground thereof, is 60 days from the date of the petition.
17.2 May an award be appealed to or set aside by the courts? If so, on what grounds and by what procedures?
In national arbitration, there are differences between arbitrators de jure and ex aequo et bono.
Pleas of cassation and appeals may be filed from the award issued by an arbitrator de jure, and they are decided on by the court that takes cognisance of these pleas if filed with an ordinary judge, ie the Court of Appeals having competent jurisdiction in the place of arbitration. Nevertheless, the parties may waive either of these recourses or both of them, or else refer them to arbitration in the agreement to arbitrate or any subsequent instrument.
In the case of arbitrators ex aequo et bono, pleas for cassation on the merits do not apply, nor does an appeal unless the parties – in the arbitration agreement – reserve this right and also designate the persons who will hear such appeals. In consequence, in this case appeals are not heard by the courts of law but rather by an arbitration court designated by the parties.
Awards issued by arbitrators ex aequo et bono are also subject to pleas of cassation for formal errors, on grounds of incompetence and ultra petita.
For both types of arbitration, the reason to appeal is one and the same, namely, exceptions, ie the difference between one party’s claim and what the award grants, assuming that the difference is detrimental to the claimant. The appeal is processed in accordance with general rules.
National arbitration awards may also be subject to complaint remedies for serious breaches or abuses, which are heard by the respective Court of Appeals.
Appeals are not applicable to international arbitration. Law Nr 19971 expressly provides that the only remedy against the award is a plea for annulment, which is heard by the respective Court of Appeals. This remedy only applies when brought on any of the grounds indicated in Law Nr 19971, basically the same as those found in the New York Convention of 1958.
18. ENFORCEMENT OF AWARD
18.1 What are the procedures and standards for enforcing an award? Is there a difference between ‘domestic’ and ‘non-domestic’ awards?
Enforcement of an award issued by a domestic arbitration court is governed by the general rules applicable to the enforcement of rulings issued by the Chilean ordinary courts (art 231ff of the Code of Civil Procedure) and may be petitioned either to the awarding arbitrator (provided the arbitration term has not yet expired) or to the applicable ordinary court, at the petitioner’s discretion. However, when enforcement requires means of pressure or other compulsion measures, the arbitration court must resort to the judiciary, as well as when the award affects third parties who are not party to the arbitration agreement. In this case, resorting to the courts of law will no longer be a right, but an obligation.
Regarding the enforcement of foreign arbitration awards, they are subject to exequatur authorisation by the Supreme Court. In Chile, these awards are as valid as those issued by foreign ordinary courts.
This matter is governed by art 242ff of the Code of Civil Procedure, which establishes an order of priority with international treaty provisions first, followed by reciprocity and then by international compliance.
Chile is a party to the New York Convention that governs the recognition and enforcement of foreign arbitration awards, and in this regard art V thereof applies. Consequently, exequatur may only be denied for any of the reasons provided in that article.
Once exequatur is granted, the foreign arbitration award becomes as enforceable as if it were a domestic award, and is therefore enforced under general rules. Article 251 of the Code of Civil Procedure states that enforcement must be petitioned to the court that would have been competent to hear the proceedings if they had been instituted in Chile.
19. CONFIDENTIALITY OF PROCEEDINGS
19.1 What are the confidentiality requirements of the arbitral process, ie existence of the arbitration, pleadings, documents produced, hearing, award?
Chilean law does not include rules requiring any or all of the arbitration proceedings to remain confidential, and there are no known relevant precedents in this matter. Therefore, the confidentiality of arbitration depends on how the parties decide to handle the case. Nevertheless, the usual practice is that arbitrators will keep the arbitration procedure as well as the parties’ argumentations and documents confidential.
20.1 Is there any particular aspect of the approach to arbitration in the jurisdiction which bears special mention?
In Chile, arbitration is becoming increasingly popular as a method for dispute resolution. It has been gaining greater relevance lately as a result of major business disputes, the opening of the Chilean economy to international trade over recent years and the recent enactment of International Commercial Arbitration Law. Since the enactment of such law, Chile is making an effort to become an arbitration centre for the region.
