Energy Disputes – Procedural Commercial/Civil Proceedings in Chile

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Enforcement

How do the courts in your jurisdiction resolve competing terms in multiple contracts relating to a single transaction, lease, license or concession, with respect to choice of forum, choice of law or mode of settlement of disputes? disputes?

The issue of conflict of laws or choice of forum can only arise in Chile if there is an international element surrounding the contract. Indeed, although there is no constitutional prohibition for the contracting parties to choose the forum (exceptionally, the choice of a foreign forum is prohibited in matters of extinction or confiscation of mining assets), article 5 of the Code of the organization of the courts provides that any legal case arising on Chilean territory will be brought before the ordinary Chilean courts. It contains no provision for choosing a foreign forum when there is an international aspect involved.

With regard to international contracts concluded by public entities (the Chilean State or its bodies, institutions or companies), Decree-Law No. 2,349 recognizes the validity of contractual clauses extending jurisdiction to foreign courts if such contracts have been concluded with international institutions, organizations or foreign companies. whose head office is abroad.

Similarly, for private contracts with an international element, the general rule regarding the validity of contractual clauses extending jurisdiction is found in Article 318 of the Code of Private International Law, ratified by Chile in 1934, which establishes that the court jurisdiction for all civil and commercial matters arising from an international contract is that which the parties have expressly chosen, provided always that at least one of them is a national of the country of the court or is domiciled there, unless a national provision opposes it. Thus, our legal system recognizes the autonomy of the parties to decide the forum.

Are tiered and split dispute clauses common? Are they enforceable under the law of your jurisdiction?

In Chile, escalation or staggered escalation clauses are not uncommon in commercial contracts in general and energy contracts in particular, being only one expression of the legal principle in contract law of the autonomy of the parties or the free will. As a general rule, the parties will include in their contracts a phase of more or less formal negotiation as a necessary step before resorting to any formal dispute resolution. Nevertheless, the enforceability of such clauses is largely left to the good faith of the parties, as there is no legal mechanism to compel them to follow the process if one of the parties chooses to trigger the dispute resolution mechanism immediately. as a last resort, whether in arbitration or the ordinary courts, because such breach of contract will in effect create a dispute which in turn will need to be resolved.

As for dispute sharing clauses, they are rather less common in Chile, although they are not unknown, especially as “unilateral hybrid jurisdiction clauses” granting the right to choose the jurisdiction to one of the parties while that the other contracting party retains only the ability to bring an action before a single jurisdiction.

How is expert evidence used in your courts? What are the rules for engaging and using experts?

Expert evidence may be required by law in some cases; it can be freely requested by the parties in others; or it may also be ordered by the court when it deems it appropriate.

Courts can order that expert evidence be given at any stage of the proceedings or even after the proceedings have been completed and before a decision is made. The parties, on the contrary, must request any expertise they wish to provide within the appropriate time limits provided for by law (evidence at trial or at a preliminary stage). Usually, expert evidence will be admitted by the court when the correct and precise appreciation of the facts in question depends on the knowledge of a particular art or science, which can only be provided to the court by an expert or a professional.

Chilean courts will evaluate expert evidence according to the rules of the “reasoned judgment” standard, understood as a set of rules of common sense and logic that the judge must use to evaluate and ponder the evidence. This is a non-legal criterion that the judge must use from the point of view of ordinary mortals with a cautious and objective attitude.

What interim and emergency relief can a court in your jurisdiction grant for energy disputes?

The Chilean Code of Civil Procedure allows parties to request provisional measures at any stage of the trial, or even before the filing of the complaint. To grant interim measures, two conditions are always necessary: ​​the demonstrated plausibility of the requested measure and the existence of urgency.

What is the procedure for enforcing foreign judgments and foreign arbitral awards in energy disputes in your jurisdiction?

For a foreign judgment or an arbitral award to be enforceable in Chile, it is necessary to obtain the prior authorization of the Chilean Supreme Court. This process is called “exequatur”.

The general rule concerning exequatur is reciprocity, which means that in the absence of treaties governing the matter, foreign judicial decisions will have the same enforceability in Chile as Chilean judicial decisions in the corresponding jurisdictions.

In all other cases, foreign judicial decisions will have the same enforceability in Chile as if they had been pronounced in Chile as long as the following conditions are met:

  • that they do not contain anything against Chilean law, although the procedural rules to which the case should have complied under Chilean law will not be taken into account;
  • that they are not contrary to national jurisdiction;
  • that the party against whom the judicial decision is invoked has been duly informed of the proceedings. Even in this case, proof that this party has not been able to defend itself will be allowed; and
  • that these judicial decisions are final in accordance with the laws of the country of issue.

With regard to arbitral awards in particular, Article 246 of the Chilean Procedural Code provides that the aforementioned rules are applicable to final judicial decisions rendered by arbitral tribunals as long as the authenticity and effectiveness of the award have been verified. or approved by an ordinary superior court of the country where the prize was awarded.

Alternate Dispute Resolution

Are there arbitration institutions that specifically handle energy disputes in your jurisdiction?

Since 2004, Chile has had a specialized tribunal called the Panel of Experts, dedicated to resolving disputes in the energy sector. The panel exercises its powers in three areas:

  • disputes arising between the CDEC (the operator of the electrical systems) and the energy companies subject to the coordination of the operator;
  • cases in which the law requires the intervention of the College of Experts, such as disputes resulting from the approval of the plan for the extension of transport infrastructure (high voltage lines and substations); and
  • any conflict that the energy companies decide to submit to the College of Experts concerning the application and interpretation of the Electricity Act and its regulations.

As such, in the first two areas, the College of Experts acts as an ordinary court established by law to resolve energy disputes, while in the second case, the College of Experts plays the role of an arbitration tribunal. .

Is there a general preference for litigation over arbitration or vice versa in the energy sector in your jurisdiction?

As we explained earlier, energy disputes in the Chilean energy sector are resolved by the Panel of Experts, which plays the role of an ordinary court or an arbitration entity, depending on the type of dispute.

Are statements made during settlement discussions (including mediation) confidential, accessible or without prejudice?

Statements made during settlement discussions, as well as settlements themselves, reached outside of a court or arbitration proceeding, are treated as a regular contract between the parties. Therefore, they are admissible as evidence in court, notwithstanding breach of contract if a confidentiality clause has been breached.

Also, if statements are made in a trial or arbitration, or if settlement agreements are filed with a courthouse or arbitrator, they are deemed to be public.

Confidentiality and Privilege

Are there any data protection, trade secret or other privacy concerns for the purposes of eDisclosure/eDiscovery in a proceeding?

In a civil lawsuit, the parties do not have the right to request electronic disclosure or communication. During civil proceedings, the parties may ask the judge to order the production of certain written or signed documents (including the advance electronic signature) in the possession of the other party or a third party. Approval of the exhibition request is subject to the court’s decision based on their direct relationship and relevance to the resolution of the controversy and the court’s judgment that they are not considered private or secret.

In addition, during a civil trial, the parties may also request the exhibition of the accounting books in the possession of the other party. To this end, courts may grant the exhibit on the condition that it is considered relevant for the preparation of the trial or its direct relationship and relevance to the resolution of the controversy, limited to specific sections of the books that are considered relevant by the court.

What are your jurisdiction’s rules regarding solicitor-client privilege and work product privileges?

There are legal and ethical obligations for lawyers regarding solicitor-client privilege. According to our Code of Civil Procedure, lawyers are exempt from the obligation to testify in a civil trial. This exemption only covers confidential facts which have been communicated to the lawyer in consideration of his profession. There is no special protection under Chilean law for working product privileges.

The ethical obligation of confidentiality for lawyers is broader and covers all information that has been provided to the lawyer by the client. It also includes a prohibition on disclosure to any third party and a duty to protect information provided by its client, including information disclosed to him or his employees. However, the ethical obligations only apply to members of the Chilean Bar Association and membership is not compulsory.

Jurisdiction

Do certain energy disputes have to, for jurisdictional reasons, first be heard before an administrative agency?

The various sanctions that the Superintendency of Electricity and Fuel (SEC) can impose on one of the companies under its supervision can be appealed to the SEC. However, this administrative appeal is not mandatory, giving the sanctioned party the right to appeal directly to the corresponding Court of Appeal. However, the administrative appeal interrupts the prescription of the judicial appeal and its decision is also subject to appeal.

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