The Treaty of Lima solved the dispute between Peru

Peru

Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....

 and Chile

Chile

Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

 regarding the status of the Chilean administered territories of Tacna

Tacna

- Rail :Tacna is served by a cross-border standard gauge railway to Arica, Chile.It is also the location of the National Railway Museum of Peru.-Air:Tacna is served by the Crnl. FAP...

 and Arica

Arica

Arica is a city in northern Chile. "Arica" may also refer to:Places* Arica and Parinacota Region, Chile* Arica Airport , Chile* Arica, Amazonas, town in Colombia* Rio Aricá-açu, tributary of the Cuiabá River south of Cuiabá, BrazilOther...

. According to the Treaty, the Tacna-Arica Territory was divided between both countries; Tacna being awarded to Peru and with Chile retaining sovereignty over Arica. Chile also agreed to pay up to 6 million dollars in compensation to Peru.

The Treaty was signed on June 3, 1929, in the city of Lima

Lima

Lima is the capital and the largest city of Peru. It is located in the valleys of the Chillón, Rímac and Lurín rivers, in the central part of the country, on a desert coast overlooking the Pacific Ocean. Together with the seaport of Callao, it forms a contiguous urban area known as the Lima...

 by then Peruvian Representative José Rada y Gamio and Chilean Representative Emiliano Figueroa Larrain.