The five dams are to be built on two rivers in the sparsely-populated Aysen area of Chilean Patagonia.
The dam project, which is a joint venture between Chilean Company and Spanish- owed one, will cost some $3bn and is designed to generate 2,750MW power.
After heavy backing from the President Sebastian Pinera, the project was approved in May.
But now, the court has ruled that it needs to review the approval process.
And it is unclear that how long the court will take to decide on the matter.
Number of protests has been sparked by the project which includes the violent clashes between demonstrators and the security forces.
According to the Government, the dams are the basic requirements to meet country’s increasing demand for electricity.
But for environmentalists, they say that it will damage the area’s fragile ecology and its tourist’s potential.
These environmentalists also add that, the energy produced will be used mainly for the country’s mining industry.
Report by Sharika