Chile: A Dispute Resolution: Arbitration Overview

Overview

Chile has established itself as one of the most arbitration-friendly jurisdictions in its region. It offers a robust and highly sophisticated legal, judicial and institutional framework for arbitration, which has, for many years, driven a steady increase in the number of disputes resolved through this mechanism. Today, a substantial share of the most significant commercial disputes in the country are resolved in Chile through both ad hoc and institutional arbitration.

Consistently, the sectors generating the largest volume of arbitration cases – often involving significant economic value – include energy, construction, mining, agribusiness and public infrastructure concessions. All indicators suggest that this trend will not only continue, but strengthen.

In recent years, there has been a particularly notable rise in M&A arbitrations, corporate disputes (including shareholder disputes and disputes between shareholders and management), and claims arising from changes in circumstances affecting long-term contracts. As a result, issues such as hardship, price adjustment claims, and the interpretation and application of hardship and material adverse effect clauses have become key arbitration hot topics in Chile.

At the same time, Chile has begun to see arbitral awards in which allegations of private corruption play a material role, reflecting the increasing complexity of disputes brought before arbitral tribunals.

Not surprisingly, these developments have led to a clear and growing trend: companies are increasingly involving arbitration specialists at a much earlier stage – often from the structuring of transactions or during project execution – as part of their dispute-prevention strategies. Early involvement of arbitration expertise not only helps mitigate disputes, but it also places parties in a significantly stronger strategic position should arbitration ultimately arise.

International Commercial Arbitration

Over the past decades, Chile has experienced a marked increase in the resolution of disputes through international arbitration, as well as in its selection as a preferred seat, particularly within the Ibero-American market.

This positioning is driven by several key factors, including the stability of Chile’s institutions and its strong adherence to the rule of law; a modern and reliable legal framework for international arbitration – featuring, for over 20 years, a dedicated statute that closely mirrors the UNCITRAL Model Law on International Commercial Arbitration; and a comprehensive domestic regime supported by multiple international treaties that facilitate the recognition and enforcement of foreign arbitral awards, including the New York Convention.

Equally decisive has been the stance adopted by Chilean courts. The judiciary has consistently and rigorously upheld the fundamental principles underpinning international arbitration, notably minimal court intervention and party autonomy. Most recently, Chile’s constitutional courts delivered a strong endorsement of international arbitration by holding that the internal disciplinary remedy (recurso de queja), through which higher courts supervise judges, is not available against international arbitral awards.

As a result, foreign investors – both with projects in Chile and elsewhere – are increasingly choosing Chile as the seat of their international arbitrations, often applying Chilean substantive and procedural law. This applies equally to ad hoc arbitrations and to proceedings administered by both Chilean and international arbitral institutions. Notably, in the past year, Spain’s leading arbitration centre (CIAM-CIAR) made a decisive entry into the Chilean market, underscoring Chile’s growing regional importance as an arbitration hub.

Investment Arbitration

Chile has historically been a highly attractive destination for foreign investment and has developed an extensive institutional and treaty-based framework to protect such investments, while also safeguarding Chilean investment abroad. The country has entered into dozens of investment protection treaties worldwide, most of which provide for the resolution of investment disputes in neutral international fora. Chile has been a Contracting State to the ICSID Convention since 1991.

To date, foreign investors have brought claims against Chile before ICSID on seven occasions, while Chilean investors have initiated proceedings against foreign states in ten cases. In the most recent decision (2024), an ICSID tribunal found that Chile had breached the minimum standard of treatment owed to a Colombian investor and ordered the State to pay compensation.

Looking ahead, Chile is likely to continue facing investment arbitration claims. In recent years, several foreign investors across different sectors have formally notified Chile of disputes under applicable investment treaties. In parallel, Chile finds itself at the centre of a broader global debate in investment arbitration concerning the scope of treaty protections in the context of regulatory markets, including areas such as energy transition and climate change.

Institutional Emergency Arbitration

Chile’s arbitral institutions have also kept pace with global developments, most notably through the adoption of emergency arbitration mechanisms. While interim relief before the ordinary courts operates efficiently, Chile’s leading arbitral institution has recently amended its arbitration rules to allow for the appointment of an emergency arbitrator empowered to grant interim and preliminary evidentiary measures prior to the constitution of the tribunal.

During the first year of operation, emergency arbitrators granted 79% of the applications submitted, positioning emergency arbitration as a highly effective and increasingly attractive alternative to seeking relief before the ordinary courts.