CHILE Trends and Developments Contributed by: Ricardo Vásquez, Juan Araya Allende and Álvaro Jara Burotto, Vásquez Urra Abogados
Vásquez Urra Abogados Avenida El Bosque Norte 0123,
oficina 702, Las Condes, Santiago Chile Tel: +562 6469 4106 Email: contacto@vua.cl Web: www.vua.cl
International commercial arbitration is a means of resolving disputes between companies or individuals from different countries without resorting to the ordi - nary courts. The parties agree to submit their dispute to one or more arbitrators, whose decision – known as an award – is final and binding. In Chile, interna - tional commercial arbitration is regulated by Law No. 19,971 on International Commercial Arbitration, which has been in force since 2004 successfully. Law No. 19,971 followed the UNCITRAL Model Law, and therefore Chilean rules are compatible with those of many other countries. Chile has also acceded to the main international treaties on arbitration, such as the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and the Inter-American Conven - tion on International Commercial Arbitration (“Panama Convention”), which recognise awards and allow its enforcement in multiple jurisdictions. The Chilean system assigns a very limited role to the state courts. The general rule is that judges do not intervene in arbitration except in cases expressly pro - vided for by law. This ensures that the parties retain control over how they resolve their disputes and avoid unnecessary delays. How Can an Arbitral Award Be Challenged in Chile? The only avenue: an action for annulment Once the award has been issued, the only way to challenge it is before a Chilean court by bringing an action for annulment, which must be filed before an Appellate Court. There is no right of appeal or other
ordinary remedy. The time limit for bringing such an action is three months from the date of notification of the award. This remedy is not a fresh review of the case. The court does not re-examine the facts, nor does it assess whether the arbitrator correctly applied the law, nor does it alter the outcome if it considers that it might have been different. Its sole purpose is to verify that the arbitration proceedings were conducted cor - rectly and that the award does not violate fundamental principles of the Chilean legal system. Chilean case law is consistent on this point: more than 20 judgments of the Appellate Courts, handed down between 2007 and 2025, consistently confirm that an action for annulment is not a second instance. This consistency is a positive sign for those who choose Chile as the seat of their arbitrations. Grounds on which an award may be set aside Law No. 19,971 sets out an exhaustive but limited list of grounds. The award may only be set aside if one of these grounds applies. The main grounds are the following: • One of the parties lacked the capacity to enter into the arbitration agreement, or that agreement is invalid. • A party was not duly notified or was unable to exercise its right of defence. • The arbitrators ruled on matters not submitted to them or exceeded the limits of the arbitration agreement.
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