As with any other contract, general rules of interpretation are crucial to ascertain the scope and reach of arbitration agreements. The Supreme Court recently missed the chance to provide a sharper and more sophisticated decision concerning the applicable legal rules of interpretation of arbitration agreements, which is a crucial matter for the uniform enforcement of international commercial arbitration agreements.
The autonomy of parties to agree on an arbitral procedure is a basic principle of international commercial arbitration. However, parties occasionally try to deny the recognition of awards issued according to agreed rules, claiming that they are unfair or contrary to due process. A recent Supreme Court case on this matter helps to circumscribe the concept of 'proper notice' and protects parties' procedural autonomy, which will ensure the continuing development of international commercial arbitration.
In international commercial arbitration, parties sometimes try to apply domestic civil procedural rules and argue that arbitral awards made in violation of these rules should be vacated for being contrary to public policy. However, a recent court decision shows that public policy cannot be assimilated with every procedural rule and requirement applicable to domestic litigation, and should thus deter future parties from trying to vacate arbitral awards by invoking possible conflict with the Civil Procedure Code.
Congress recently approved a bill to replace the Superintendence of Securities and Insurance, the securities and insurance watchdog, with the newly created Financial Markets Commission. The commission will have the same authority in the financial and insurance markets as its predecessor, as well as improved powers, particularly regarding investigations and the application of penalties.
Law 20,954, which amends the Corporations Act in Law 18,046, was recently published in the Official Gazette. The amendment provides that custodians of shares in public companies that hold shares on behalf of other parties must provide the Securities and Insurance Commission with the identity of those parties. Banks that act as custodians must report this information to the Superintendence of Banks and Financial Institutions.
The Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention) came into force on August 30 2016. The convention sets out the competent authorities that issue apostilles, the application process and details of the online system for issuing apostilles. Further, the requirement that foreign apostilled documents must be filed with a notary public has been removed.
The Apostille Convention was recently promulgated by presidential decree. The convention eliminates the requirement of consular legalisation of foreign public documents for signatory states and will apply for five years following its entry into force. Foreign companies conducting business in Chile will benefit, since the existing and cumbersome legalisation procedure will be replaced by the more expeditious apostille procedure.
Unlike partners of a company – who limit their financial liability to the value of their investment – directors, managers and administrators may be forced to use their personal assets to compensate for negligent actions. The general liability of executives does not imply that they must cover the company's obligations with their personal assets; rather, they are liable to the company and its stakeholders for damages caused by their negligent behaviour.
Most commercial companies in Chile are established as limited liability companies, public or privately owned corporations, joint stock companies or individual limited liability companies. Establishing a company requires granting a public deed before a notary public. An abstract containing the basic details of the new entity must also be registered with the Registry of Commerce and published online in the Official Gazette.
The latest reform of the Competition Statute introduces a preventive control procedure for merger operations that have effects in Chile. As of June 1 2017 the national economic prosecutor will undertake a control procedure for merger operations before they begin. The amendment aims to provide legal certainty and reduce the length of merger control procedures.
Changes were recently introduced to Chile's antitrust regulation, including a mandatory M&A review by the National Economic Prosecutor's Office, a ban on interlocking directorates and mandatory notification of cross-ownership between rival firms. These changes will have a significant impact on firms in the short term. The new administrative duties that the act imposes are preventive in character and align Chile's antitrust regulations with international practice.
The Supreme Court recently revoked two appeal court decisions in which the underlying issue was the Tax Department's authority to deny taxpayers the ability to issue invoices in certain circumstances. It is unclear whether the Tax Department will review its criteria in this regard, as court decisions in Chile affect only the parties in the specific case.
A taxpayer resident in Chile with a portfolio investment in the United States recently requested a ruling on whether he was entitled to a refund of certain withholding taxes paid by the portfolio because it included bonds issued in Chile. The taxpayer argued that withholding tax should be refunded to the beneficiary of the interest if the beneficiary is a Chilean resident. However, the Tax Department took a different view.
A taxpayer recently requested a ruling on whether a certain type of tax treatment was available following the merger and consolidation of a group. The tax department ruled that the individuals who owned shares in the resultant entity were entitled to use a variable tax rate rather than the 32% fixed tax rate on corporate income tax already paid on profits, as there is no transfer of property in a merger process, but rather an assignment of property to a person who already has a legal interest therein.
A taxpayer recently requested a ruling from the Chilean tax authorities on whether a branch of an entity resident in a third state should be considered a UK resident for the purpose of claiming the benefits provided under the Chile-UK double tax treaty. The tax department concluded that the person claiming benefits under the treaty was a resident of a third state and that its UK branch or permanent establishment did not meet the requirements to qualify as a UK resident under the treaty.
The recent tax reform introduced by Law 20,780 has provided for two alternative tax regimes: the attributed regime and the partially integrated regime. The attributed regime applies to individual entrepreneurs, limited liability companies, communities and joint stock companies, while the partially integrated regime is obligatory for corporations and companies whose members and shareholders are other companies (resident or non-resident).