Introduction
Institutional arbitration in Chile and role of CAM Santiago
Modernisation of arbitration proceedings
Comment


Introduction

Institutional arbitration has gradually positioned itself as the most common and advisable mechanism for the resolution of complex legal commercial disputes that require an expert and expeditious solution. In this context, the Arbitration and Mediation Centre of the Santiago Chamber of Commerce (CAM Santiago) has become a reference for institutional arbitration in Chile. Since its foundation, more than 5,000 arbitrations have been submitted to the jurisdiction of CAM Santiago arbitrators.

Institutional arbitration in Chile and role of CAM Santiago

Although institutional arbitration is not directly regulated by the Chilean Procedure Code, it has gradually become the mechanism of choice regarding alternative resolution of disputes of complex matters and/or disputes which require a more expeditious solution (eg, construction contracts, project development or shareholders' agreements).

Among the main advantages of institutional arbitration (compared with ad hoc arbitration) are:

  • the existence of a neutral and permanent institution or agency devoted to aiding and administering the arbitral process;
  • previously defined rules and procedures;
  • regulated and public fees; and
  • logistical support for the development of each arbitration process.

Despite the existence of other arbitration centres in Chile, CAM Santiago, founded in 1992, has positioned itself as the local authority in this matter. Most of the relevant contracts contain arbitration clauses that entrust CAM Santiago with the appointment of the arbitrator to resolve any difficulty or controversy arising between the contracting parties (sometimes even agreeing to the appointment of an arbitral panel composed of three or more members). A further relevant characteristic is the creation of the Good Practices Committee of CAM Santiago, whose main functions are to hear claims filed against arbitrators, requests for disqualification and resolutions issued by the courts (in the event that arbitration awards are challenged and reversed).

The significant increase in the number of requests for arbitration filed before CAM Santiago shows how much local lawyers rely on the centre. Since 2012, requests for arbitration have increased annually by 12%. In 2019, during the height of the covid-19 pandemic, figures increased by 20% (425 arbitration requests were filed that year). According to CAM Santiago's statistics, around 25% of these cases referred to construction matters and 20% to real estate disputes (20%).

Modernisation of arbitration proceedings

Arbitration before CAM Santiago allows for in-depth knowledge of its operation, including the evolution of its practices and procedures in accordance with international standards.

In this regard, CAM Santiago was one of the promoters of the Chilean Law on International Commercial Arbitration 2004,(1) based on the United Nations Commission on International Trade Law Model Law. In 2006, CAM Santiago issued its own International Commercial Arbitration Rules. In 2013, the centre implemented an electronic system for the processing of arbitrations, which allowed the filing of pleadings and the notification of arbitration decisions through an electronic platform. It should be noted that, at that time, the processing of cases before the ordinary courts of justice was physical, as electronic processing began later in 2016.

During the covid-19 pandemic, CAM Santiago implemented the electronic processing system by holding online hearings, which previously only took place physically (eg, hearings of witnesses, conciliations and closing arguments). In fact, firms continued to handle most of their cases before CAM Santiago normally (notwithstanding the general suspensions ordered by law for all judicial proceedings). This made it possible for law firms to resolve their clients' disputes in a timely manner.

Finally, CAM Santiago included the issues described above in the 2021 Arbitration Procedural Rules, which allowed for procedural flexibility and adjusted the procedure to international practices. For example, "party declaration" (similar to the affidavit, common in other international procedures but not covered by Chilean procedural laws) was introduced as a means of providing evidence and electronic processing (including hearings) and was established as a general rule.

Comment

All the above, and the experience of law firms litigating in this type of proceedings, demonstrate that CAM Santiago represents a serious, trustworthy and effective alternative dispute resolution institution, which has allowed for the timely resolution of relevant disputes in commercial and civil topics. Thus, complex contracts that require expeditious and effective resolution should include arbitration clauses that submit eventual disputes before CAM Santiago (which has even published a "model or standard clause").

However, several challenges are pending, including the expansion of "arbitrable matters". Some of the disputes that could be submitted to arbitration are those related to competition matters between private parties, in which public interest is not at stake, and highly complex construction contracts entered by private parties with the state.

For further information on this topic please contact Loreto Silva or Ignacio Cantillana at Bofill Escobar Silva Abogados by telephone (+56 2 2483 9000) or email ([email protected] or [email protected]). The Bofill Escobar Silva Abogados website can be accessed at www.beslegal.cl.

Endnotes

(1) Law No. 19.971 (International Commercial Arbitration).