DISPUTE RESOLUTION ARBITRATION AND MEDIATION —CHILE— (ENGLISH VERSION)
| Jurisdiction | Derecho Internacional |
(April 2003)
DISPUTE RESOLUTION ARBITRATION AND MEDIATION —CHILE— (ENGLISH VERSION)
Lira & Silva
Santiago, Chile
1. The Administration of Justice in Chile
1.1 The Judiciary
In accordance with Article 73 of the Political Constitution of the Republic of Chile:
"The power to hear civil and criminal causes, to resolve them and to enforce judgments pertains exclusively to the courts established by the law. Neither the President of the Republic nor the Congress may ever exercise judicial authority, remove pending cases, review the grounds or contents of the resolutions in regard thereto or reopen closed cases."
In other words, the courts established by law must administer justice with total independence from the other branches of the government, from the President of the Republic and from the latter and the National Congress (as co-legislators). The organizations and attributions of the courts are, therefore, set down in a law, namely the actual Organic Code of the Courts.
As a result, the courts established by law have the authority to hear and judge the matters submitted thereto and to enforce judgments. This is known as jurisdiction.
The Judiciary is comprised of the Ordinary Courts of Justice, the Supreme Court, the Appellate Courts, the Court Presidents and Justices, and the Civil Courts. The special courts of the Judiciary consist of the Juvenile Courts, the Labor Courts and the Military Courts in peacetime.
1.2 Arbitrators
Since most disputes involve only the particular interest of the parties to the same, they have not been deprived of the right to remove certain matters from the hearing of the permanent courts established by law and hand over the solutions of those disputes to the decision of a third party chosen by those who are involved in the dispute and in whom they deposit their trust.
Therefore, on the one hand, private persons are not denied the freedom to contract and dispose freely of their rights while on the other hand, the law grants them the authority to surrender the resolution of their differences to an arbiter they have chosen who does not form part of the corps of permanent judges and is none other than an arbitrator. These arbiters are governed by Title IX of the Organic Code of the Courts.
Undoubtedly, the need to have an alternative mechanism for the resolution of juridical disputes in modern economies is what has made arbitration a tool that is of increasing use, outside the activity of the ordinary courts. The flexibility and celerity in dispute resolution, the confidentiality, the efficiency in the hearing of the case and the need to have a judge specialized in certain highly complex judicial and technical matters, have made arbitration an effective contribution to the evolution and development of commercial relations in our country.
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Accordingly, the law empowers interested parties to resort either to the permanent ordinary courts or arbitrators that the parties themselves nave appointed in the search for justice in the resolution of certain types of disputes.
2. Arbitration and Mediation
2.1 Arbitration. Origins and Sources
2.1.1 The institution of arbitration dates back to our early independence. Provisions on arbitration can be found in the Political Constitutions of 1822 and 1823.
The Law of Organization of the Courts of 1875 is where the regulation of arbitration takes on greater importance and depth, clearly rooted in Spanish Law that is the predecessor to our Organic Code of the Courts. Title IX of our Organic Code is dedicated to this institution. Title IX of Book III of the Code of Civil Procedure also regulates the arbitral proceeding in complement to the rules contained in the Organic Code of the Courts. That is why even though we have established that arbitration emanates from the intent of the parties, from the freedom to contract, from the free choice of the person who must render a judgment, we must at the same time say that it is the law what recognizes the jurisdiction of the person chosen to hear the proceeding, receive evidence and resolve the dispute in a manner binding upon the litigants.
Our positive law therefore classifies the arbiters appointed by the parties or, alternatively, by the court, to resolve a litigious matter. [Article 222, Organic Code of the Courts].
2.1.2 Different Types of Arbitration
The law has also set down the matters for arbitration and has made a distinction between voluntary arbitration, involuntary arbitration and prohibited arbitration.
Voluntary arbitration originates in the intent of the parties and constitutes the general rule. Involuntary arbitration is imposed by law as the only procedure to resolve certain conflicts while prohibited arbitration relates to matters that cannot be submitted to arbitration because society's interest are compromised.
2.1.3 Voluntary Arbitration
To some, this type of arbitration takes on the nature of a contract in which the intent of the parties to establish the arbitration and appoint the arbitrator is determining. For others, it is jurisdictional in nature since the arbitrator plays the role of a judge.
In Chilean law, arbitration implies jurisdiction similar to that of the ordinary courts. As we saw above, the law classifies them outright as judges and speaks of their jurisdiction and of the arbitral proceeding, applying thereto diverse rules established for permanent judges. The jurisprudence of our courts is also inclined to allocate to arbitrators jurisdiction similar to that of judges.
Nevertheless, one must remember that arbitral proceedings start out as conventional, involve a mandate, a commission entrusted by the parties to the arbitrator. However, in reality, arbitration does not, in and of itself, have any of the characteristics of a contract once the arbitration has been established.
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2.1.4 Voluntary Arbitration in Mining
It is common for there to be an arbitration agreement or an arbitration clause in promises for the purchase of mining concessions, concession purchase option agreements and concession purchase agreements whereby the resolution of disputes that usually arise among the parties is submitted to arbitrators.
The general rules of the institution of arbitration therefore apply in mining.
2.1.5 Involuntary Arbitration
This is arbitration established by law as the only means to resolve certain litigious matters, given their nature.
According to article 227 of the Organic Code of the Courts, matters that must be resolved by arbitrators are:
l.• The...
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