New Rules for Emergency Arbitration in Chile

On August 11, 2023, the Arbitration and Mediation Center of the Santiago Chamber of Commerce (CAM Santiago) introduced new rules on emergency arbitration (EA) to its domestic Arbitration Rules, through the inclusion of a new article 21 bis and a new Title IX (EA Regulation).  The EA Regulation will enter into force on September 1, 2023, and addresses the EA procedure, the appointment of an emergency arbitrator (and grounds for their disqualification), service upon respondent parties, and standards applicable to a request for an emergency measure.[i]

Background

Prior to the introduction of the EA Regulation, a party in need of interim relief prior to the constitution of an arbitral tribunal, had to apply to the Chilean courts to petition for interim measures pursuant to the Chilean Civil Procedure Code (CPC).[ii]  CAM Santiago has introduced the EA Regulation to enable users to’ “obtain emergency relief without resorting to domestic courts and keep the resolution of their disputes within the arbitration proceedings.”[iii]  CAM Santiago has also highlighted the speed and confidentiality of EA proceedings as advantages over interim court proceedings.

Procedure

Pursuant to articles 54 and 55 of the CAM Santiago Arbitration Rules, a request for EA can be made prior to the commencement of an arbitration. The applicant party will submit a request for EA and an emergency arbitrator will be appointed by the center within two business days of the request being filed.  Once appointed, the emergency arbitrator shall agree to serve as such also within two business days.  Unless the proceedings are conducted ex parte, the request for EA is served to the respondent party, who has three business days to answer the request for EA.  Subsequently, in accordance with article 57, the arbitrator can order further pleadings and/or submission of further evidence.

The emergency arbitrator must reach a decision on the application for EA within five days of the last pleading and/or submission of evidence.  If the relief sought is granted, the applicant must then file their request for arbitration and the statement of claim within ten days (although this time period can be extended by the center to thirty days).  If a request for arbitration is not filed within such period, the applicant will be held liable for any damages caused to respondent, and the emergency arbitrator will be authorized to lift any emergency measures.[iv]

Standards applicable to an emergency measure

The EA Regulation follows the same standards set out in the CPC for the issuance of interim measures in the Chilean courts. Unlike other international arbitration rules, article 21 bis of the new CAM Santiago Arbitration Rules requires a party seeking relief from an emergency arbitrator to show the same grounds applicable to an interim measure granted by a court.  Pursuant to articles 279 and 298 of the CPC, an applicant must show: (1) “serious and justified reasons” for seeking the measure, (2) a likelihood of success on the merits (fumus boni iuris), and (3) risk of irreparable harm (periculum in mora).  Further, Article 57 of the EA Regulation requires the applicant to post security sufficient to compensate the other party for potential damages caused by the emergency measure, if granted.

Ex parte emergency measures

Notably, the EA Regulation entitles an emergency arbitrator to conduct the proceedings ex parte if the applicant requests it based on the “existence of serious reasons.”[v]  This is distinguishable from other international arbitration rules which do not allow ex parte orders in their EA proceedings.  For instance, the ICC Rules require “the Secretariat [to] transmit a copy of the Application and the documents annexed thereto to the responding party”[vi] and require the emergency arbitrator to “ensure that each party has a reasonable opportunity to present its case.”[vii]  Similarly, the ICDR Rules provide that the emergency arbitrator “shall provide a reasonable opportunity to all parties to be heard.”[viii]

Application in multi-tiered arbitration clauses

Article 58 of the new CAM Santiago Arbitration Rules specifically grants authority to emergency arbitrators to grant emergency measures “even if the arbitration agreement requires that, prior to the commencement of the arbitration, [pre-arbitration steps] be fulfilled prior to the commencement of arbitration.”  The same provision allows the petitioner to seek a stay of the ten-day period to file its request for arbitration and statement of claim, while the underlying pre-arbitration steps are being fulfilled.  This is a useful provision which clarifies how EA proceedings will still work when parties are required to exhaust certain steps (expert determination, conciliation, mediation, etc.) before resorting to arbitration.

Enforcement of emergency measures

For purposes of enforcement, the EA Regulation does not address the form of an emergency measure (i.e.‘order’ or ‘interim award’) as other arbitration rules do.  For instance, the ICC Rules provide that “[t]he emergency arbitrator’s decision shall take the form of an order,”[ix] while the ICDR Rules provide that “[emergency] measures may take the form of an interim award or an order.”[x]

Given this latest development in the CAM Santiago Arbitration Rules, Chilean courts may now have the opportunity to address the question of enforcement of emergency measures – which is still an unsettled area in many jurisdictions.  In contrast, in jurisdictions like India (which upheld the enforcement of emergency measures in 2021 for domestic interim awards),[xi] and Singapore (which did the same for foreign interim awards in 2022), there is no longer uncertainty regarding their enforceability.[xii]

Conclusion

Following the introduction of the EA Regulation, the domestic Arbitration Rules of CAM Santiago will be the first domestic arbitration rules to provide for emergency arbitration in Chile.  It is still unclear whether CAM Santiago will introduce similar EA provisions to its 2006 International Arbitration Rules.  In any case, this development shows that institutions and users in Chile are willing to afford arbitral tribunals broader powers in the granting of interim relief and is a further step towards independence from court intervention in domestic arbitration.

For further information, please contact Christian Leathley, Partner, Amal Bouchenaki, Partner, Daniela Paez, Senior Associate, Carlos Hafemann, Associate, or your usual Herbert Smith Freehills contact.

[i] CAM Santiago, Reglamento Procesal de Arbitraje Nacional del CAM Santiago 2021 – Incorpora Arbitraje de Emergencia, available here.

[ii] See EA Regulation, Article 21 bis (“The arbitration proceeding may be initiated by requesting the interim measures referred to in Title IV of Book II of the Civil Procedure Code […].”; See also Chilean Civil Procedure Code, Articles 279, 290-320, available here.

[iii] El CAM Santiago presenta regulación sobre el Arbitraje de Emergencia, CAM Santiago (Aug. 11, 2023), available here.

[iv] CPC, Article 280(2).

[v] EA Regulation, Articles 21 bis, 56.

[vi] ICC, Arbitration Rules (2021), Appendix V, Article 1(5).

[vii] Id., Appendix V, Article 5(2).

[viii] ICDR, International Arbitration Rules, Article 7(3), available here (“The emergency arbitrator shall as soon as possible […] establish a schedule for consideration of the application for emergency relief. Such schedule shall provide a reasonable opportunity to all parties to be heard […].”

[ix] ICC, Arbitration Rules (2021), Article 29(2).

[x] ICDR, International Arbitration Rules, Article 7(4).

[xi] See Amazon.com NV Investment Holdings LLC v. Future Retail Limited & Ors., (2021) SCC Civil Appeal Nos. 4492-4493 (India), ¶ 41, available here (“We, therefore, answer the first question by declaring that full party autonomy is given by the Arbitration Act to have a dispute decided in accordance with institutional rules which can include Emergency Arbitrators delivering interim orders, described as “awards”. Such orders are an important step in aid of decongesting the civil courts and affording expeditious interim relief to the parties.”)

[xii] CVG v. CVH [2022], SGHC 249 (Sing. Ct. App), ¶ 35, available here (“A purposive interpretation therefore led to the conclusion that the term “arbitral award” in s 27(1) and by extension, the term “foreign award” in s 29(1), included awards by emergency arbitrators.”).