CHILE: An Introduction to Dispute Resolution: Arbitration

Chile Settles an Outstanding Debt in the Area of Interim Relief: Emergency Arbitration in Chile

On 11 August 2023, seeking to catch up with modern trends in international arbitration, the Santiago Arbitration and Mediation Centre (CAM Santiago) unveiled a new arbitration mechanism called “Emergency Arbitration”, which emerges from the needs of arbitrators and litigators arising during the processing of these proceedings, according to CAM Santiago chair, Mrs María Agnes Salah.

If a CAM Santiago arbitration agreement in force, the parties and their attorneys can now request preliminary measures before this new arbitration body, either to secure evidence to prepare the arbitration proceedings, or to obtain a measure of interim relief or injunction to ensure that any subsequent final arbitral award can, in fact, be enforced.

This innovation by CAM Santiago has been widely welcomed by the arbitration community in Chile. Prior to the creation of Emergency Arbitration, a petitioner could only file a request for preliminary relief before the State courts so that, once the court order had been issued and the judicial measure had been implemented, the arbitration proceeding could then begin.

There were several drawbacks to the previous system, in the sense that several of the advantages of arbitration were lost, such as the confidentiality of the proceedings, the speed of decisions and the specialisation of the arbitrators. Indeed, proceedings before State courts are not confidential; processing times tend to be much longer; and State court judges do not necessarily have the time and resources necessary to devote the attention required by disputes subject to an arbitration agreement.

All these disadvantages have now been overcome with the initiation of Emergency Arbitration, but without affecting the powers of the State courts in these matters, which will continue to be required, especially for matters in which no CAM Santiago arbitration agreement is in force (for instance, when an ad hoc arbitration has been agreed).

There are currently two options for parties bound by an arbitration agreement referring to the rules of the CAM Santiago when filing requests for interim relief:

• they can continue to file the petition before the State courts; or
• they can initiate the Emergency Arbitration procedure, file for the required preliminary relief before such emergency arbitrator, and then continue discussing the merits of the dispute before the same arbitral body.

In conceiving of this solution, CAM Santiago was inspired by modern regulations instituted by international arbitration centres such as the International Court of Arbitration of the International Chamber of Commerce, the Singapore International Arbitration Centre and the Court of Arbitration of the Madrid Chamber of Commerce. CAM Santiago also utilised a 2022 report by the Justice Reforms Programme of Universidad Católica de Chile, which analysed comparative arbitral justice in the area of preliminary relief measures. All of these sources provided the foundations for the new regulations contained in the Rules of Arbitration of CAM Santiago, adapted to the reality and needs of Chilean arbitration proceedings.

The characteristics of CAM Santiago’s Emergency Arbitration include:

• the confidentiality of the procedure;
• the existence of arbitrators specialising in the field of the respective dispute;
• the speed of decisions; and
• the convenience of concentrating the entire dispute before a single arbitration body.

Therefore, litigating parties are provided with a comprehensive system for the provisional protection of their rights, conveying coherence and procedural unity to the arbitral process.

In the short time that CAM Santiago’s Emergency Arbitration has been in force, the available data lays out some very interesting findings. The “2023 Annual Report” of CAM Santiago, which contains statistical data on the emergency arbitrations that were processed from September to December 2023, states the following.

• During the three-month period analysed, a total of six requests for preliminary relief were filed. Of these, four referred to interim injunctions, accounting for 66.7% of the total.
• Most of these requests pertained to corporate disputes, accounting for 83.3%, while 16.7% related specifically to the energy sector.
• The measures that have been rejected account for 50%, while 33.3% were granted in their entirety, and 16.7% were partially granted.
• The average duration of emergency arbitration proceedings initiated in 2023, from the request for emergency arbitration to the final interim resolution, was only 14 days. This is consistent with the objective of keeping the processing time short, in order to promote effective interim relief and comply with the purpose for which this institution was created.

Based on this data, it is clear that the arbitration community has fully embraced the use of this new tool, most probably motivated by the objective of obtaining an effective precautionary protection of its claims without sacrificing any of the advantages of the arbitration procedure.

Naturally, and as is inherent in any innovation, Emergency Arbitration will entail new challenges in the processing of arbitration proceedings. These challenges will arise and should be resolved over time and with the use of this new mechanism.

The entire arbitration community bears the responsibility of contributing its experience and conduct to the solution of the challenges that will ensue. Indeed, ultimately, having an arbitral institutional framework that is in line with the most modern trends is a precious asset that must be safeguarded.

CAM Santiago has made remarkable efforts to keep itself constantly updated, adapting to contemporary trends in arbitration proceedings after a thorough study of comparative experience and providing a procedure in line with the needs of arbitration in Chile. This is undoubtedly a reason for celebration.