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.
The Code of Civil Procedure allows parties to domestic arbitration to waive most of the procedural recourses contemplated by the law in order to avoid the intervention of the civil courts, except where the arbitrator commits a disciplinary fault or the award exceeds the scope of the arbitrator's competence. However, a recent decision has limited the right for parties to waive procedural recourses where constitutional rights are at stake.
Although arbitration is always consensual, the typical model – in which the parties agree to arbitrate their disputes – now coexists with other models in which consent is established through a complex, multi-stepped process. This update comments on two cases decided by the courts in which the arbitration agreement was extended to litigants that, in principle, were not parties to the underlying contract.
A recent court decision illustrates the pro-arbitration stance of courts in cases governed by the International Commercial Arbitration Act. The court confirmed that the act has an autonomous nature and that the role of local judges is not to control every stage of the arbitral proceeding, but to supervise it in limited circumstances. The decision should play a persuasive role in future cases.
The International Commercial Arbitration Act recently marked its tenth anniversary. The statute closely followed the text of the United Nations Commission on International Trade Law Model Law and has allowed an updated and integral arbitration framework to be established in Chile. It has also sought to convert the country into an important seat of international arbitration in Latin America.
If the enforcement of an award rendered in a foreign country is rejected for procedural reasons, the decision is not considered to have the force or effect of a final resolution and the petitioner can request its enforcement for a second time.
The Court of Appeals of Santiago recently clarified two important issues relating to arbitration - whether an award can be made after the two-year limit prescribed by law has expired, and whether an arbitrator determine the fee he is to be paid.
Including: Sources and Basic Rules; Requirements for Arbitrators; Decisions and Awards; Institutional Arbitration