Arbitration in antitrust

Arbitration is a dispute resolution mechanism whereby the parties submit a contentious matter to a third party—chosen by them or, alternatively, by a legal authority—to render a binding decision.

According to the Courts’ Organic Code (COT), arbitrators have the status of “judges” (Art. 5 final paragraph and Art. 222 COT), even though they are private individuals appointed by the parties.

Because of this, there is strong controversy regarding its use in competition law. The prevalence of private interest in applying the law, contrasted with the public interest that dominates competition law, causes many scholars to consider this procedure a threat to competition law enforcement.

Arbitrators are regulated under Articles 222 et seq. of the Organic Code of Courts (COT), while the procedure they must follow is set forth in Articles 628 through 644 of the Code of Civil Procedure (CPC).

Scholars distinguish between matters that: (i) can be arbitrated; (ii) must be arbitrated; or (iii) cannot be arbitrated.

• Optional Arbitration: This is the general rule, originating from the will of the parties who may submit any matter to arbitration unless it is prohibited by law.
• Mandatory Arbitration: Matters that must necessarily be heard by one or more arbitrators, as listed in Article 227 of the COT.
• Prohibited Arbitration: Matters that the law expressly forbids from being submitted to arbitration, such as criminal cases, or alimony (Arts. 229 and 230 COT).

Parties submit their conflicts to an arbitrator through a submission agreement (“compromiso”) or an arbitration clause (“cláusula arbitral”). The former is an agreement for an existing or future dispute where the arbitrator is named at the time of the agreement. The latter is a contract where the parties agree to submit future disputes to an arbitrator to be named later.

Unlike other jurisdictions, the use of arbitration in competition law has not been extensively addressed in Chile. Two main limitations have been postulated:

1. Competition rules are part of the Chilean public order (“orden público”) and therefore cannot be modified by private parties.
2. The Tribunal de Defensa de la Libre Competencia (TDLC), which is in charge of competition matters, holds exclusive and exclusionary jurisdiction.

Nevertheless, some authors have argued that antitrust claims are not always matters of public order (ordre public). They suggest that recent case law from the TDLC is moving toward recognizing a sphere where parties may indeed dispose of their antitrust claims, provided that the public interest is not severely compromised (Tapia and Corvalán, 2022, pp. 16-19).

Regarding the second limitation —the exclusive and overriding jurisdiction of the TDLC to rule on antitrust matters— the issue concerns the criteria for determining a court’s exclusive jurisdiction from an organizational perspective. In this sense, some argue that the mere existence of a specialized court for certain matters is sufficient to establish its exclusive jurisdiction. Others, however, contend that arbitration does not infringe upon these powers and, consequently, the TDLC’s jurisdiction is not exclusive (Tapia and Corvalán, 2022, pp. 19-29).

In this regard, the Resolutive Commission (now defunct) ruled in Resolution No. 147/1983 that the inclusion of an arbitration clause does not infringe upon antitrust regulations, as it “cannot interfere with the powers and authorities of the bodies created by law to prevent, investigate, correct, and sanction antitrust violations or abuses of a monopoly position.”

Recently, the Fiscalía Nacional Económica has permitted the use of this procedure within the context of merger control, particularly regarding the implementation of remedies consisting of access obligations. Thus, the Prosecutor’s Office has approved measures incorporating arbitration as a dispute resolution mechanism for conflicts arising from the negotiation or renegotiation of programming channel licensing agreements with pay-TV operators (see mergers: AT&T/Time Warner, 2017; Turner/CDF, 2018; and HBO/Ole, 2020).

In the absence of consensus, the arbitrability of antitrust disputes remains a debated topic

In Judgment No. 199/2024, the TDLC ruled on the possibility of submitting indemnity actions derived from anti-competitive offenses to arbitration.

The dispute originated from Judgment No. 173/2020, in which the TDLC upheld a complaint (“requerimiento”) from the FNE and sanctioned the National Professional Football Association (ANFP) for anti-competitive conduct. The offense consisted of imposing an “incorporation fee” on clubs as a requirement for their promotion from the Second Division to Primera B. This fee was classified as an artificial and unjustified barrier to entry. This ruling was confirmed by the Supreme Court on September 6, 2021.

Once the infringement judgment became final, and in accordance with Chile’s follow-on system, the club Deportes Melipilla filed a lawsuit for damages before the TDLC. In its response, the ANFP filed an exception of lack of jurisdiction, arguing that, per its statutes, the conflict should be resolved before the Court of Patrimonial Matters (TAP), as the statutes contained a mandatory arbitration clause.

In resolving this, the TDLC held that there is no absolute prohibition against submitting claims for damages derived from anti-competitive offenses to arbitration. The Court stated that “even though the express text of DL No. 211 grants exclusive jurisdiction to this Court… respect for the private autonomy of the parties would allow to recognize the validity of an arbitration clause… provided that the damage generated by the conduct has a certain degree of predictability” (C. 28).

The Court specified three requirements for an arbitration tribunal to have jurisdiction (C. 29):

1. The offense must be determined by a final judgment before signing the arbitration clause: It is not acceptable to subtract a future offense from ordinary justice, as that would constitute the condonation of a future fraud (dolo futuro).
2. The arbitration clause must provide for the hearing of a clearly identified action for damages: The object must be indubitable and refer specifically to the controversy derived from a clearly identified final judgment.
3. The jurisdiction of the arbitration tribunal must be limited to determining the existence of damage, quantification, and causality: The arbitrator cannot re-examine the illegality of the conduct or re-discuss the offender’s liability.