This article was featured in Jus Mundi‘s 2024 Arbitration Year in Review, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.
THE AUTHORS:
Arantxa Ereche, Associate at Baker McKenzie
Bernardo Aylwin, Associate at Pellegrini & Rencoret
María Luisa Petitpas, Economist & Vice President at Econsult Capital
Matías González, Associate at Cuatrecasas
Montserrat Castro, Attorney
Valentina del Solar, Associate at Grupo Vial Abogados
The year 2024 has been significant one for arbitration in Chile, underscoring the country’s growing relevance as a leading seat for international arbitration in the region. In particular, this article will cover:
- The 20th anniversary of the enactment of Law 19.971 on International Commercial Arbitration;
- The establishment of emergency arbitration at the main arbitration center in Chile, the Arbitration and Mediation Center of the Santiago Chamber of Commerce (“CAM Santiago”); and
- The latest developments related to investment arbitration.
Two Decades of Law 19.971: Cementing Chile’s Role as a Premier International Arbitration Hub
On 29 September 2024, Chile celebrated the 20th anniversary of Law 19.971 on International Commercial Arbitration (“LACI“, for its acronym in Spanish). Drafted by a working group including the Chilean Bar Association, the CAM Santiago, and Arbitration and Mediation Center of the Chilean American Chamber of Commerce (better known as AmCham), LACI closely follows the 1985 text of the United Nations Commission On International Trade Law Model Law on International Commercial Arbitration (2006) (“UNCITRAL“).
Since its enactment in 2004, LACI has consolidated Chile’s regulatory system for international arbitration, supported by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (“New York Convention”), providing a solid legal framework for international disputes, providing one of the highest international standards in arbitration proceedings.
Chile’s position as a seat for international arbitration is reinforced by its pro-arbitration national courts. There is considerable evidence that supports this view. In fact, the Court of Appeals of Santiago has not upheld any annulment request against an international award. It has limited itself to a formal analysis of specific grounds for annulment provided by the LACI, avoiding a review of the merits of the dispute. This attitude extends to the recognition and enforcement of arbitral awards by national courts, with minimal court intervention.
These facts have fostered foreign investor confidence, positioning Chile as a top arbitration seat in Latin America. CAM Santiago experienced a 26.1% growth in international cases in 2023 compared to 2022, which involved parties from various countries (United States, Mexico, Colombia, Ecuador, Chile, Argentina, Panama, Spain, Germany, China, and Japan) as well as different industries (commerce, finance, mining, and construction). The arbitration requests ranged from lower-value cases to high-impact economic disputes, demonstrating Chile’s capacity to handle diverse arbitration matters.
In summary, LACI has been fundamental in establishing Chile as a leading arbitration seat in Latin America. Supported by a robust regulatory framework, a favorable arbitration tradition, and sustained growth in the management of international cases, Chile’s versatility and attractiveness as an arbitration seat are evident. These factors consolidate its position as a key player in the international commercial arbitration landscape.
Swift Solutions: The Impact of Emergency Arbitration in 2024
One of the key developments in Chilean arbitration in 2024 was the successful implementation of “Emergency Arbitration” at CAM Santiago.
The Rules of National Arbitration of the CAM Santiago (“CAM Santiago Rules”), incorporated a procedure to request interim measures in arbitration proceedings, similar to those available in ordinary courts. Emergency Arbitration is regulated in articles 21 bis (preliminary measures) and the new title IX (Emergency Arbitration), applicable from September 1 (2023).
By incorporating Emergency Arbitration, CAM Santiago joined other global arbitration centers like the Singapore International Arbitration Centre (“SIAC”) and the Stockholm Chamber of Commerce (“SCC”) (2010), the Australian Centre for International Commercial Arbitration (“ACICA”) (2011), the International Court of Arbitration of the International Chamber of Commerce (“ICC”) (2012), the Hong Kong International Arbitration Centre (“HKIAC”) (2013), the London Court of International Arbitration (“LCIA”) (2014), and the Lima Chamber of Commerce (“CCL-Peru”) in (2017).
This is no coincidence. The benefits of the Emergency Arbitration are clear. In Chile, the arbitration community has praised CAM Santiago’s regulation for its speed, confidentiality, unity of the arbitral process, an appropriate differentiation between the arbitrator to oversee the Emergency Arbitration from the one to adjudicate the dispute, and its reduced costs.
In just over a year, 28 Emergency Arbitration requests have been processed, with 6 in 2023 and 22 in 2024 (Statistical information provided by CAM Santiago on January 29, 2025). Most requests aimed to obtain preliminary injunctions, such as prohibitions to enter into contracts, asset retention, and appointment of an intervener. Only two cases sought evidence in anticipation of the main arbitration.
The success of Emergency Arbitration in Chile is attributed to its short timeframes. The average time from the submission of the request to the appointment of the arbitrator is 1.4 days, and the average time from the first resolution to the final resolution is 1.4 days. These timeframes comply with Article 57 of the CAM Santiago Rules, that requires Emergency Arbitrators to resolve cases definitively within five days.
Emergency Arbitration has been effective in various types of conflicts, including corporate litigation (6 cases), service contracts (6 cases), construction projects (5 cases), energy contracts (5 cases), real estate (4 cases), among others. Out of 28 requests, 22 were granted, 6 were denied, and 1 was partially granted.
The figures demonstrate the successful reception of Emergency Arbitration by the Chilean arbitration community, reaffirming arbitration as an effective conflict resolution mechanism.
It is also worth noting that Emergency Arbitration, as regulated in the CAM Santiago Rules, is a novel concept compared to other arbitration centers. While the trend of Emergency Arbitration has been in the context of international arbitration proceedings, in Chile, its implementation has been in domestic arbitrations.
Unlike other regulations where emergency measures cannot be decreed ex parte, the CAM Santiago Rules, in line with the Chilean Procedural Civil Code Chilean, empower the Emergency Arbitrator to decree them in this manner. Of the 28 requests made, most of them were granted ex parte, with only three allowing the opposing party to be heard before issuing a resolution on the request.
Beyond the differences, both for the international arbitration community and especially for that of our country, the incorporation of Emergency Arbitration in an institution like CAM Santiago is a great advance for the development of arbitration, and as such, it has been well received by the arbitration community in our country.
Despite these differences, the incorporation of Emergency Arbitration at CAM Santiago is a significant advancement for arbitration development. It has been well received by both the international and Chilean arbitration communities.
Investment Arbitration: Chile’s Evolving Landscape
In 2024, Chile witnessed significant developments in investment arbitration, reflecting its evolving landscape. This section will explore key rulings, ongoing disputes, and the impact of these processes on the country’s arbitration environment.
Interconexión Eléctrica v. Chile
In December 2024, the Arbitral Tribunal composed by Ms. Carmen Núñez-Lagos (President) and co-arbitrators, Messrs. Phillipe Pinsolle and Luis González García, issued the Final Award in the investment arbitration between ISA’s subsidiaries in Chile and the Chilean government. This arbitration was conducted before the International Centre for Settlement of Investment Disputes (“ICSID“). Chile has a relatively low rate of investment arbitrations, with only six registered cases, five of which have already been concluded. This ruling is significant, as it is one of the few cases where the State of Chile has been sentenced in this type of arbitration.
The dispute concerns problems experienced by Interchile S.A.—ISA’s subsidiary in Chile—during the execution of the Cardones-Polpaico electrical transmission project. The investor filed a claim for US$200 million, alleging multiple obstacles attributable to third parties and the Republic of Chile itself, which prevented the project’s execution. This was claimed to infringe the Chile-Colombia Free Trade Agremeent (“FTA”) signed on November 27, 2006 (the “Treaty“).
The Tribunal concluded that Chile had violated Article 9.4 (Minimum Standard of Treatment) of the Treaty, specifically in relation to the decisions of the Ministry of Energy adopted in February 2020, which imposed fines on Interchile S.A. for delays in the project’s commissioning.
As a result, the Tribunal ordered the State of Chile to reimburse Interchile S.A. a proportional part of the fine charged for the delay, equivalent to US$16 million. Considering that the rest of the investor’s claims were rejected, the Tribunal ordered the claimant to reimburse Chile 80% of the costs incurred by the respondent in the defense (fees and expenses) as well as the arbitration costs, amounting to approximately US$3.5 million.
ADP and Vinci Airports v. Chile
The only ongoing investment arbitration against Chile is the one initiated by the French companies ADP International S.A. (Aeroports du Paris) and Vinci Airports S.A.S. This arbitration was registered before ICSID in August 2021 and relates to the concession for the expansion and maintenance works of the Arturo Merino Benítez International Airport in Santiago (the “Airport“).
The dispute arose due to the restrictions imposed by authorities as a result of the COVID-19 pandemic, which significantly affected the operation and revenues of the Airport. According to the Chilean Undersecretariat of Foreign Affairs, the companies claim that Chile should have adopted specific measures to alleviate the temporary drop in revenues they faced due to the decrease in air traffic and commercial activities as a consequence of COVID-19.
The claimant companies allege that the measures adopted by the Chilean government during the pandemic, as well as the rejection by the Chilean Ministry of Public Works of a contractual extension to compensate for the losses suffered, violated their rights under the Chile – France BIT (1992). The estimated economic loss claimed by the companies amounts to US$37 million. The Arbitral Tribunal is composed by Mr. Claus Von Wobeser (President) and co-arbitrators Mr. Stephan Schill and Ms. Mónica Pinto.
Amicable Consultation Requests
In addition to investment arbitration cases, Chile is currently engaged in amicable consultations with several international companies. These consultations aim to resolve differences between the parties and are a prerequisite in the vast majority of treaties signed by Chile formally initiating an investment arbitration.
The companies involved in these consultations are mainly related to the financial and pension services sectors. On one hand, the British company Bupa which controls Isapres Cruz Blanca initiated the amicable consultation process due to the uncertainty and lack of protection generated by the regulation of the primary health sector. Similarly, the American company Ohio National Life Insurance (“ON Insurance”) and the Swiss company Zurich Insurance Company initiated the procedure based on the argument that the enactment of Law 21.330 implied an expropriation of their resources.
The Chilean government, through the Ministry of Foreign Affairs, has been managing these amicable consultation processes through its Foreign Investment Arbitration Defense Program, to avoid prolonged and costly litigation. The government’s strategy includes convening an Interministerial Committee to address these cases.
In conclusion, the landscape of investment arbitration in Chile has experienced significant developments in 2024, with important rulings and ongoing disputes reflecting the complexity and impact of these processes in the country. The management of these cases and the pursuit of real solutions are crucial to maintaining investor confidence and ensuring a favorable environment for foreign investments in Chile.
ABOUT THE AUTHORS
Santiago Very Young Arbitration Practitioners (“SVYAP”) is a network that brings together young professionals with a shared interest in domestic and international arbitration, promoting both professional and academic engagement. SVYAP hosts academic and social events tailored to its members, creating high-quality intergenerational spaces for networking and development.
The authors of this report are current members of the SVYAP Executive Committee.
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*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
