CHILE Law and Practice Contributed by: Ricardo Rozas, Max Morgan and Stefano Perretta, JJR Abogados
ion from an independent court official is also request- ed by the Supreme Court. The Supreme Court entertains the matter in a hearing at which the parties may make oral statements. After enforcement is allowed, the judgment must be presented to the competent civil court to commence an executive proceeding (by which the defendant’s assets can be foreclosed, if applicable). For arbitral awards, a law on international commercial arbitration – based on the UNCITRAL Model Law – was passed in 2004. Its Article 35 regulates the recog- nition and enforcement of foreign arbitral awards. Arti- cle 36 lists the defences that can be asserted against enforcement, and regulates orders of stay. Chile is also a party to the 1958 Convention on the Recog- nition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). In this respect, Chilean courts have enforced all foreign arbitral awards that comply with the rules set out in the law regarding enforcement. 9.5 Enforcement of Arbitration Clauses As stated in 9.1 Insurance Disputes Over Coverage , insurance disputes are generally subject to arbitration. Also, as stated in 9.2 Insurance Disputes Over Juris- diction and Choice of Law , any dispute arising from insurance and reinsurance contracts governed by the Insurance Companies Act (DFL 251) must come under the jurisdiction of the Chilean courts. However, once a reinsurance dispute effectively arises, the parties to the reinsurance policy are entitled to resolve dis- putes under Chile’s international commercial arbitra- tion rules. 9.6 Enforcement of Awards As described in 9.4 Enforcement of Judgments , arbi - tral awards are enforced in the same way as court judgments, but are subject to the New York Conven- tion and to the Chilean adoption of the UNCITRAL Model Law on International Commercial Arbitration, if applicable. 9.7 Alternative Dispute Resolution Apart from arbitration, there are no other industry- specific settlement mechanisms in Chile, and alter-
native dispute resolution (ADR) is not much used in the context of (re)insurance disputes. Mediation is not compulsory. However, prior to enter- ing the evidence stage, Chilean courts are obliged to call for a conciliation hearing, whose main aim is to help the parties achieve settlement. Courts and arbitrators may be more active in their approach to searching for amicable settlement, depending on the circumstances. 9.8 Penalties for Late Payment of Claims Generally speaking, punitive damages are not con- templated under Chilean law. However, as regards settlement of losses, Supreme Decree 1055-2013 (which establishes regulations for local insurance brokers and loss adjusters) states that, upon receipt of the final adjustment report on both lia- bility and quantum for the loss, the insured and insurer have ten days to object, failing which the parties are taken to have accepted the adjustment. If objections are made to the final loss-adjustment report, the adjuster thereafter has six days to respond, and the response is sent to both the insured and insur- er simultaneously. In the case of insurance referred to under the second paragraph of Article 542 of the Chilean Code of Com- merce (concerning damage insurance), the time limits for responding are increased to 20 days (objection to the final report) and 12 days (response from the adjuster), respectively. The insurer is required to notify the insured within five days of the completion of the adjustment process on its final decision on the claim. The loss or undisputed sum must be paid within six days for registered con- tracts (ie, those contracts registered with the CMF and that are normally standard form). However, this period can be extended where the insurance is a non- registered contract. 9.9 Insurers’ Rights of Subrogation Article 534 of the Chilean Code of Commerce states that, upon payment (whether partial or total) of the indemnity under the insurance contract, the insurer
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