166. If the municipalities have their own legal status and their own assets, it means that, if they
should face debt obligations, only the municipalities (not the creditors) may sue the national
treasury directly. The municipalities must use their own funds to finance debt payment. If they
do not have the funds, as was explained by expert witness Tomás Jordán Díaz, 1975 organic
decree-law 1263 on financial management of the State goes into effect. This decree-law allows
the administration, following certain specific criteria, to add more resources to those approved
under the annual budget law, still respecting the general rule that only resources established by
law may be used. Article 28 of the decree-law, however, creates the possibility for the
administration to order payments exceeding the amounts provided in the particular budget items
to comply with final judgments ordered by the competent authority.408 Note, however, that the
text of this Article 28409 is worded in terms of a mere possibility for the administration, using the
verb “may,” which is not mandatory. Any additional financing, therefore, would depend on the
good will of the executive branch. Similarly, in the framework of the municipalization of education,
Article 8 of decree-law 1-3,063 allowed the executive, when turning a service over to the
municipality, to provide budgetary resources to cover the operating expenses of the service being
transferred. This Court would emphasize once again that this is worded as optional, it does not
oblige the executive to provide financing, and in the instant case, the administration ignored the
option, which in practice ruled out the possibility of payment of the amounts owed.
167. In several of these processes, then, the municipalities reported on the different measures
undertaken with the Executive Branch to have the additional funds duly allocated for paying the
amounts ordered. For example, in the process Bayer et al. v. the Municipality of Parral, Docket
No. 4,274-1993, the representative of the municipality submitted a brief on April 26, 1996, stating
that “the different line ministries [had] been requested repeatedly to [provide] the funds, but had
refused.”410 In the process Ramírez Ortíz et al. v. the Municipality of Vallenar, Docket No. 4,4431993, the municipality submitted a report describing the attempts to work out measures with the
undersecretary of regional development and the budget director of the Ministry of Finance,411
which had been fruitless. This Court has already underscored that budget regulations may not be
used as an excuse for many years of delay in complying with judgments.412
168. The municipalities of Chañaral, Chanco and Cauquenes therefore sued the Chilean national
treasury for the money to pay the amounts ordered. These lawsuits, however, were dismissed.
The argument, in general terms, was that Chile’s domestic legal system had no regulations
requiring the central government to provide budget resources to the municipalities for paying
their debts.413 More specifically, the Sixth Civil Court of Santiago, interpreting Article 8 of 1980
decree-law 1-3,063, said, “the national treasury ‘may’ allocate extra financial resources to the
408
Cf. Expert statement delivered before a public attestor by Tomás Jordán Díaz, May 28, 2021 (evidence file,
folio 19072).
409
Article 28 of 1975 organic decree-law 1263 on financial management of the State: “The executive may order
payments exceeding the amounts consulted under the relevant budget items, in the following cases: the execution
of final judgments delivered by the competent authority. […]” (evidence file folios 19072 and 19073).
410
Brief filed by Germain Morales on behalf of the municipality of Parral before the Court of First Instance of
Parral, April 26, 1996 (evidence file, folio 17772).
411
Cf. Brief and annexes filed by Celica Medina on behalf of the municipality of Vallenar before the Court of First
Instance of Vallenar, on a date uncertain (evidence file, folios 13197 to 13213).
412
Cf. Case of Acevedo Jaramillo et al. v. Peru, supra, para. 225, and Case of Acevedo Buendía (“Discharged and
Retired Employees of the Comptroller”) v. Peru, Preliminary Objection, Merits, Reparations and Costs. Judgment of
July 1, 2009. Series C No. 198, para. 75.
413
Order by the Supreme Court, June 12, 2008 (evidence file, folio 1395).
58
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