Revista de Derecho Económico (Journal of Economic Law)

A «narrow» interpretation of the Most-Favoured-Nation clause. Comments on Beijing Everyway Traffic & Lighting Tech. Co., Ltd. v. Ghana

Joaquín Schäfer Rodríguez — 2024-12-28

The Most-Favored-Nation (MFN) clause is a contentious issue in investment arbitration, particularly regarding its scope. The question of whether MFN protection is substantive or procedural has been a subject of ongoing debate, as evidenced by the case of Beijing Everyway Traffic & Lighting Tech. Ltd. v. Ghana. In this case, the Tribunal opted for a restrictive interpretation of the MFN clause, ruling that Investor-State Dispute Settlement can only be triggered if the dispute pertains to the amount of compensation. This decision deviates from the conventional broad interpretation of the Most-Favored-Nation clause that prevailed at the beginning of this century. Notably, this investment dispute arises from a series of loans facilitated by the China Development Bank, aimed at promoting infrastructure development projects on the African continent. In this context, the objective of this commentary is to assess this award from three distinct perspectives: First, the restrictive interpretation of the Most-Favored-Nation clause is examined, followed by an analysis of the effet utile of restrictive Investor-State Dispute Settlement clauses. Finally, the role of Chinese companies as foreign investors is discussed. The arbitral award is then critically analyzed, leading to the following conclusions: Firstly, the award represents another example of the jurisprudential back-and-forth on the Most-Favored-Nation clause. Second, the principle of effectiveness or effective interpretation cannot exceed the terms agreed upon by the Contracting States. Third, Chinese companies play an important role in investment projects in Africa, and this award invites the strengthening of the State-State Dispute Settlement.

Settlement in competition proceedings: concept, evolution and implications

Marcelo Mayor Salas — 2024-12-31

Total and partial settlements have gained relevance in the competition field since the creation of the Chilean Competition Court (Tribunal de Defensa de la Libre Competencia, TDLC). Its jurisprudential evolution in contentious proceedings can be divided into four periods: 2004-2008, marked by the emergence and conceptualization of this mechanism; 2009-2014, characterized by a 100% success rate -all settlement summoning ended with a settlement- and a more passive role of the TDLC; 2015-2019, in which the TDLC adopts an active role of amiable compositeur, becoming more involved in the content of the agreements; and 2020-2024, in which this self-compositive alternative is treated by the TDLC as an essential step of the procedure, but with a lower success rate. This development has implications for several aspects of the Chilean competition system. First, although settlements allow saving public and private resources, their extension to certain areas prevents knowing the position of the courts, so it would be convenient to facilitate the existence of judicial pronouncements in matters such as gun jumping, minority shareholdings and ex post challenges of concentration operations before continuing to conciliate in cases for such infringements. Second, the use of this jurisdictional equivalent raises questions regarding the possibility of invoking it as a basis for damages actions and the scope of the res judicata exception, which will necessarily have an impact on the incentives of economic agents to sue and settle. Finally, we recommend to carefully use settlements in collusion cases, as they may have a negative impact on the functioning of leniency; and (re)formulating certain settlements -for example, in cases of abuse of dominance and collusion- as evidentiary agreements, in order to save resources without causing collateral effects on leniency.

Sobre la introducción de una tasa por notificar operaciones de concentración a la Fiscalía Nacional Económica: Argumentos a favor

Ronaldo Bruna Villena — 2024-12-28

This article argues in favor of introducing an administrative fee that the merging parties should pay to the National Economic Prosecutor's Office when notifying such a transaction. This would be a precedent condition for the agency to initiate the corresponding transaction analysis through its Merger Division, as the competition law requires. After providing certain quantitative information on the budgetary situation of the National Economic Prosecutor's Office, which justifies why it is necessary to provide it with more resources to analyze concentration operations, as well as detailing the legal arguments that would enable the introduction of such fee, an economic calculation is made of the efficient amount that such rate should have, based on an estimate of the costs associated with the review work of mergers and acquisitions by the National Economic Prosecutor's Office. Within this context, different fee structures are analyzed. It is explained that opting for a simple fee –of the flat or single type– is preferable. This choice is made to facilitate its implementation, making the process easier and more straightforward. It is concluded that the introduction of this fee is efficient because it would allow the Merger Division to adequately finance the review work, which will result in benefits for the whole system and for the parties to the operation. This fee not only produces private and public benefits but also represents a low cost in relative terms with the other costs of a merger.

Tensions and challenges in the judicial review of decisions affecting free competition in Chile

Constanza Delgado Valenzuela — 2024-12-28

This article examines the current institutional design of the system that aims to protect free competition in Chile, focusing on the role of the Supreme Court, which plays a key part in being responsible for reviewing the judicial decisions of the Court for the Defense of Free Competition (TDLC, Spanish acronym). Throughout the text, the institutional tensions and distortions that arise due to the generalist nature of the Supreme Court, in contrast to the technical specialization of the TDLC, and the impact this has on the coherence and efficiency in resolving conflicts in this area, are analyzed. Furthermore, the difficulties that emerge from the interaction between both courts and how the Supreme Court's decisions have influenced the evolution of jurisprudence are explored. In particular, it highlights how the increasing sophistication of the Supreme Court has affected its relationship with the TDLC, especially in those cases where it has opted to follow an independent path from the specialized body, generating debate over whether judicial deference should—or should not—exist within the system. Finally, the article raises questions about the ability of both courts to collaborate effectively and coherently in the current institutional landscape, proposing solutions to improve coordination and institutional design to promote greater consistency and effectiveness in resolving free competition conflicts in Chile.

Mercados regulados y libre competencia: La sutil diferencia entre intervenir en un mercado regulado e intervenir el mercado regulado. Un análisis desde los casos de licitaciones en el mercado de las telecomunicaciones y el mercado aeronáutico

Cristóbal Martínez Varela — 2024-12-28

La relación entre el derecho de la libre competencia y la regulación sectorial ha sido una materia en constante tensión. El rol que deben cumplir las autoridades de competencia en un mercado que está fuertemente regulado y en el que sus agentes actúan conforme a reglas predefinidas es un tema de compleja definición. El Decreto Ley 211 es considerado parte del orden público económico de Chile, de modo que tanto los organismos públicos como los privados que intervienen en un mercado regulado están, en principio, obligados a respetar sus disposiciones. Sin embargo, en ocasiones, la aplicación de la normativa sectorial supone tensiones con los principios y reglas establecidas en el Decreto Ley 211, lo que levanta la pregunta sobre cuándo corresponde que la autoridad de competencia intervenga en dichos mercados regulados. A partir de dos casos conocidos en 2009 por la Corte Suprema en materia de licitaciones en los mercados de telecomunicaciones y aeronáutico, veremos que la clave para responder a esta respuesta descansa en el diseño de la política pública sectorial, particularmente en si esta otorga o no cierta discrecionalidad a los agentes que intervienen en dicho mercado. Precisamente, es allí donde descansa la diferencia entre que la autoridad de competencia intervenga en un mercado regulado y que intervenga el mercado regulado.

Suitability of divestiture measeures in non-merger cases

Alex León Ramírez — 2024-12-28

The article addresses divestiture measures in non-merger cases, highlighting their relevance in competition law. These measures, which have a significant impact on market structure, are less common in consultative and contentious procedures compared to their application in mergers, where they are typically used to mitigate horizontal risks. However, in exceptional cases, such as those involving abuse of dominant position or monopolization, they have been successfully applied. The article also emphasizes that the primary purpose of divestiture measures is to restore competition and prevent the recurrence of anti-competitive practices. The analysis includes a discussion of the legal nature of these measures, suggesting that, while they are not sanctions in the strict sense, they may acquire a punitive character in certain cases, especially when total divestitures are imposed, significantly limiting the property rights of the undertakings involved. In most cases, however, they are considered corrective or preventive measures, designed to restore competitive balance in markets affected by violations. The article concludes that the imposition of divestiture measures must be based on the principles of effectiveness and proportionality. It emphasizes the importance of evaluating whether less burdensome alternatives exist to achieve the same objectives without excessively harming the affected economic agents. Finally, this analysis should be more restrictive in cases where total disvestiture is sought.

Economic Instruments for Biodiversity Conservation in Law 21.600

Fernando Díaz González — 2024-12-28

This article focuses on the analysis of the Economic Instruments for Biodiversity Conservation (IECB) and the National Biodiversity Fund (FNB) in Chile's Law 21,600. The different types of EBCIs are reviewed and those regulated by this law are studied in particular. The study highlights the importance of strengthening the use of sustainable practices, exploring in particular each of these instruments, characterizing them and identifying challenges that remain latent in the regulation, especially for the SBAP for its future development and implementation.

Editorial

Jaime Gallegos Zúñiga — 2024-12-28