Chile - Time Bars

Chile - Time Bars

The Limitation Periods Applicable to Claims under Chilean Maritime Law

Chilean Maritime Law is regulated under Book III of the Chilean Code of Commerce. Under Chilean law the general principle is that any action relating to maritime disputes is time-barred in two years.  This period is counted as follows:

Nature of ClaimTime Bar
Bareboat and time charters From the date of the contract expiration or the permanent cessation of its execution.
Voyage chartersFrom the date stipulated for its completion or the date of contract resolution or rescission.
Contracts of carriage of goods by seaIn case of cargo claims this period commences on the day on which the carrier has delivered the goods or part thereof. If there is no delivery, the period is counted from the end of the last day on which the goods should have been delivered.
Passage Contracts
  1. Personal injury claims - the period commences as of disembark of the passenger. If the passenger dies during transport, the period is counted from the expected disembark date. If the passenger dies after disembarking but due to injuries suffered during transportation, as of the date of death but not exceeding three years as of disembark. 
  2. Damage to luggage - the period is counted as of disembark of the passenger. 
NoteThe two-year time bar period for the three above-mentioned cases applies whether based on contract or tort liability relating the carrier or his servants.
CollisionsFrom the date of the accident. However, the time-bar period is increased from 2 to 3 years if the liable vessel could not be detained or sued whilst in waters subject to Chilean jurisdiction if the vessel leaves after the collision without first docking in a Chilean port.
Assistance / SalvageFrom the date the services are concluded. In case of indemnity actions from the owner or operator against other parties benefited from the assistance, the time allowed is counted as of the person instituting such an action has settled the remuneration or reward for the services performed by the salvor or has been served with process in the action against himself.
Other cases not expressly referred to by the Chilean Code of CommerceThe general principle under Chilean law is that limitation periods start to run “as from the date the obligation can be demanded”. Under Chilean law, it is possible that a party can demand that an obligation be satisfied immediately, unless a grace period or some other condition for satisfying the obligation has been agreed by the parties under the contract. It is therefore important to consider the provisions under the relevant contract(s) to ascertain whether the parties stipulated any provision setting out when payment falls due (or may be demanded). Any provision in the contract specifying a date for payment or making payment subject to compliance with specific conditions will impact on the calculation of the limitation period.

In addition, there are couple of cases subject to shorter time-bar period equal to six months. These cases are as follows:

Nature of ClaimTime Bar
Collection of Freight / ancillary costsThe limitation period starts to run as from the date the obligation can be demanded as per the contract terms or applicable regulations or, failing that, from the day on which the goods have been delivered at destiny or from the day on which the goods should have been delivered, as the case may be.
Passage collection The limitation period starts to run as from the date the obligation can be demanded as per the contract terms or applicable regulations or, failing that, from the end of the transportation for the passage collection.
General average and contributionsAs regards the action for declaring GA, the 6 month time-bar period is counted from the date of the goods delivery or end of the voyage. On the other hand, the action for requesting GA contribution becomes time barred within 6 months from communication of the issuance of the GA adjustment. However, if there is opposition to the GA’s legitimism, the 6 months runs for the challenger from the date when the trial ends.

Protecting the Limitation Period

Limitation periods must be protected according to the general rules contained in the Chilean Civil Code. In this respect, article 2518 of the Chilean Civil Code states that the limitation period can be interrupted by filing a lawsuit (known as civil interruption). Interruption will take place when the lawsuit is duly and legally served against the defendant through a service clerk (the so-called Receptor Judicial).
Generally speaking, under Chilean law limitation periods cannot be extended by the voluntary agreement between the parties. However, in maritime claims it is allowed to do so through written declaration of the person in whose favour the limitation period runs. The interruption can be successive and shall start running again as from the date of the last written declaration.

Additionally, pursuant to article 1195 of the Chilean Code of Commerce the limitation period for marine insurance contracts can also be interrupted by the notification of abandonment of the insurance subject matter.

Chilean courts have given a broad interpretation to the concept of lawsuit when it comes to interruption of the limitation period, including but not limited to writs containing the substantive action or writs referring to petition for the appointment of an arbitrator.

In Chile the general principle is that the hearing of any dispute derived from acts, events or contracts creating maritime commerce or navigation, including maritime insurance of any type, is subject to mandatory arbitration (there few exceptions). If so, in order to interrupt the limitation period it will be necessary to commence arbitration proceedings in accordance with the arbitration rules. Usually these rules will set out the way in which the arbitrator shall be appointed. Service of the plea requesting the appointment of the arbitrator should be sufficient to interrupt the limitation period.

When the parties have not agreed on a mechanism to appoint an arbitrator, it would be necessary to file a plea before a competent tribunal in Chile, requesting the appointment of an arbitrator to resolve the dispute. This plea shall be served upon the defendant and if no opposition to the appointment is filed by the counterparty the court shall designate an arbitrator. The limitation period is interrupted as from the date of the notification of the plea for the appointment of an arbitrator.

An extra-judicial claim does not interrupt the limitation period.

The Effect of the Expiry of the Limitation Period

According to Chilean law, the expiry of the limitation period can only be declared by a court upon request of one of the parties to a dispute. Courts are not allowed to declare the expiry of the limitation period sua sponte. Even in the case of arbitration proceedings, the arbitrator is barred from declaring that the limitation period has expired absent a request by the defendant for such a declaration. Where the expiry of the limitation period is declared by the arbitrator, the action should be dismissed, without prejudice to the remedies the parties may have according to the procedural rules. 

At least from a theoretical point of view, a claim which is time barred still exists until the expiry of the limitation period has been declared by a judicial or arbitral decision. Upon such declaration the claim is unenforceable and would not be available for set off. The only way to obtain payment in such case would be a voluntary payment by the debtor.

Circumstances in which the Limitation Defence may Cease to be Available

The limitation defence shall only cease to be available, if it has been waived or renounced by the beneficiary of the limitation defense. In this regard the general rules set out by the Chilean Civil Code are applicable. In this respect, Article 2494 of the Chilean Civil Code states that: “The limitation period [defense] can be expressly or tacitly waived; but only once it has expired” (free translation).

Once the limitation defence has been waived, it cannot be claimed.

JJR Abogados
Santiago - Chile

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