Chile: Legal Environment

In this page: Business Contract | Intellectual Property | Legal Framework of Business | International Dispute Resolution

Business Contract

General Observation: The existence of a relationship of employment implies the existence of an employment contract, whether it is written or not. However, under the Labour Code, the contract must be made in writing within 15 days after the beginning of employment. The contract should specify all conditions of employment. Otherwise, the employer may be subject to fines and the terms set forth by the employee will be considered the actual conditions of employment.
Law Applicable to the Contract: The Código de Trabajo applies.
Advisable Incoterms: For advice on the choice of incoterms, please see the website of the Santiago Chamber of Commerce or the DHL website.
Other Laws Which Can Be Used in Domestic Contracts: Labor laws apply to both national and foreign citizens who are employees in Chile. Foreign laws apply to labor relations with foreign countries.

Intellectual Property

National Organisations: The bodies in charge of protecting patents and trademarks in Chile are the Instituto Nacional de Propiedad Industrial (INAPI) in Santiago and the Departamento de Derechos Intelectuales.
Chile signed the Paris Convention for the protection of industrial property, as well as the agreement establishing the World Intellectual property Organization (WIPO). Patents obtained in other countries are valid in Chile until the expiration of their normal date of validity.
Regional Organisations: The issue of intellectual property is addressed in the treaty of MERCOSUR, which includes Chile, Argentina, Brazil, Paraguay, Uruguay and Bolivia.
International Membership: Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)

National Regulation and International Agreements

Type of property and law	Validity	International Agreements Signed
Patent Patent Law No. 19.039	16 years maximum	Patent Cooperation Treaty (PCT)
Trademark Patent Law No. 19.039	10 years	Trademark Law Treaty
Design Patents Law No 19.039	5 years, renewable
Copyright Intellectual Property Law 17336	Intellectual property lasts for the author's lifetime. For special cases see Copyright Law Chile	Berne convention For the Protection of Literary and Artistic Works Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms Rome ConventionFor the Protection of Performers, Producers of Phonograms and Broadcasting Organizations WIPO Copyright Treaty WIPO Performances and Phonograms Treaty
Industrial Models Patent law No. 19.039	5 years

Legal Framework of Business

Equity of Judgments

Equal Treatment of Nationals and Foreigners: Foreign nationals in the country can enjoy treatment at par with the natives from the judiciary, including commercial disputes.
The Language of Justice: Spanish.
Recourse to an Interpreter: Access to an interpreter is possible.
Legal Similarities: The main source of the law is the Constitution of 1980, which as been amended several times. The country's legal system is based on the Code of 1857 derived from Spanish law and subsequent codes influenced by French and Austrian law, as well as various judicial reviews of legislative acts by the Supreme Court. Chile has not accepted compulsory ICJ jurisdiction. In June 2005, Chile completed an overhaul of its criminal justice system to adopt a new U.S.-style adversarial system.

The Different Legal Codes

Aeronautical Code	Trade Code
Civil Code	Private International Law Code
Courts Organization Code	Military Law Code
Penal Code	Mining Code
Criminal Procedure Code	Civil Procedure Code
Health Code	Labour Code
Tax Code
Water Code

Checking National Laws Online: Library of the Chile National Congress
Other Useful Resources: Poder Judicial, Information on the legal system
Country Guides: Practical Law, Guide Doing Business in Chile

The Jurisdictions

The Supreme Court (Corte Suprema)	The highest court of Chile, administers the judicial system and can declare a law, decree or international treaty inapplicable or unconstitutional.
Courts of Appeals (Cortes de apelación)	Their function is to hear and determine, at second instance, decisions made by the first-instance judges of their jurisdiction, to hear and determine at first instance crimes committed by deputies or senators, to hear and determine appeals against indictments and decisions of incarceration.
Trial Courts (juzgados de letras)	They exercise their jurisdiction on the territory of their respective communes.
Special Tribunals	For minors, work-related disputes, the military.

Court Officials

Lawyer (abogado): A lawyer informs his clients of their rights and responsibilities. He can also defend them in court.
Judge (Ministro, Juz): A judge decides whether a law has been breached or not, as well as on the resulting penalties.
Prosecutors (Procuradores del número): Legal representatives which are specifically in charge of representing underpriviliged parties free of charge.
Notary (Notarios): Legal authority with the power to certify documents and keep those that have been entrusted to him in his archive, as well as fournish copies to interested parties and provide additional services (such as counsel).
Rapporteur (Relatores): Legal authority responsible for informing the judges of higher courts of justice about the contents of a case.
Registrar (Secretarios de tribunal): Legal authority in charge of authorizing resolutions and keeping documents. Replaces the judge in his absence. Also dicates some resolutions.

International Dispute Resolution

Arbitration: Les contrats d'investissements étrangers en vertu de la Loi sur l'investissement étranger exigent normalement les litiges soient résolus par les tribunaux du Chili plutôt que les tribunaux ou forums étrangers ou d'un organisme indépendant.">Foreign investment contracts under the Law on Foreign Investment normally require disputes to be resolved by Chilean rather than foreign courts or forums or independent entities. However, Chilean courts do recognize dispute resolution by way of foreign arbitration and in 1990 Chile ratified the acord of the International Centre for Settlement of Investment Disputes (ICSID) , which establishes a mechanism for arbitration to settle disputes in the area of foreign investment.

There are three types of arbitration in Chile: ( i) arbitration de jure or "by law", which is governed by Chilean law, (ii) the arbitration in equity , called "ex aequo et bono" arbitration, where the arbitral tribunal decides according to its own best judgment and equity, and (iii ) "mixed" arbitration, where the arbitral tribunal decides according to Chilean law, but may also decide as an ex aequo et bono arbitrator.
Arbitration Law: Law N 19.971 on International Commercial Arbitration (ICAL), Decree No. 2349, regulating international contracts in the state sector.
Conformity to International Commercial Arbitration Rules: Party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Appointment of Arbitrators: In cases of domestic arbitration, it is common practice in Chile to appoint an arbitrator (usually a lawyer) in the arbitration clause itself or entrust the appointment to an ordinary civil court, unless there is another agreement between the parties .

Under the rules of the Santiago Center for Arbitration and Mediation (CAM ), the parties can either agree on the choice of arbitrators, or put the Santiago Chamber of Commerce in charge of appointing the arbitrator(s). However, as a general rule, only one arbitrator is appointed.

In cases of international arbitration with a sole arbitrator, where the parties have not agreed on the appointment procedure and have not reached an agreement on an arbitrator, the appointment is the responsibility ot the President of the Court of Appeal where the arbitration takes place. In the case of a tribunal consisting of three members, each party appoints one arbitrator, and the co-arbitrators jointly appoint the Chairman. In case of a disagreement between the co-arbitrators or in the event that a party fails to appoint a co-arbitrator, any party may request the President of the Court of Appeal to make the necessary appointment.

Under the rules of CAM, if the parties have not agreed on the number of arbitrators, only one arbitrator shall be appointed, unless the CAM decides that a three-member tribunal is required. In this case, each party appoints a co-arbitrator and the third arbitrator is appointed by the CAM. The CAM may also appoint co-arbitrators on behalf of any party that fails to do so.
Arbitration Procedure: At first, disputes are subject to mediation and in case of failure an arbitration procedure is initiated. In case of international arbitration, there are no obligatory national rules apart from those of the 1985 International Commercial Arbitration Law of the UNCITRAL. As a consequence, parties are free to agree on a procedure to be followed by the arbitration court.
Because of high case loads, understaffing and antiquated procedures, resolution of business disputes in the civil court system often takes four to five years.
Permanent Arbitration Bodies: The Center for Arbitration and Mediation (CAM) of the Santiago Chamber of Commerce.

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