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28 May 2014
Article 1203 of the Commerce Code establishes that maritime disputes – including those relating to marine insurance – are subject to arbitration. However, in certain cases (eg, where the parties mutually agreed to court proceedings either by including it in the contract from which the dispute originates or by prior written agreement), ordinary civil courts may hear maritime disputes.
However, some parties seek to override this mandatory provision by filing lawsuits directly before the ordinary courts.
In this respect, the Valparaiso Court of Appeal recently confirmed that shipping disputes must go through arbitration and held that an ordinary court had no competence to hear a shipping dispute.
Following a vessel arrest for unpaid port fees and expenses, a port agency filed suit before a first-instance court in the San Antonio port against a Korean company that had chartered the arrested vessel. An appeal was filed based on, among others things, the court's lack of jurisdiction, as an arbitrator should have heard the dispute pursuant to Article 1203 of the Commerce Code. The appeal court confirmed that ordinary courts have no competence with regard to shipping disputes, and annulled the shipping agency's recovery proceedings. The shipping agency filed no appeal.
The introduction of the arbitration system for maritime disputes in 1988 was a positive step. In the absence of specialised maritime courts, local arbitrators have proven to be a pragmatic option for the resolution and fair settlement of local maritime disputes.
The appeal court's decision should prevent further attempts to challenge the competence of the Commerce Code's arbitration provision.
For further information on this topic please contact Ricardo Rozas at JJR Abogados by telephone (+56 2 580 9300), fax (+56 2 580 9311) or email (firstname.lastname@example.org). The JJR Abogados website can be accessed at www.jjr.cl.
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