According to the Argentine view of the treaty, called the Magellan/Atlantic transfer, the general agreement was that Argentina was an Atlantic country, and Chile was a Pacific one.
Chile has never accepted that and the Chilean view was confirmed by the Court of Arbitration in the Beagle dispute (§31 ):
It is on this basis, as well as on the actual attribution of Patagonian territory to Argentina effected by Article II of the Treaty, that the Court reaches the conclusion that it was the antithesis Patagonia/Magellan, rather than Magellan/Atlantic, which constituted the fundamental element of the Treaty settlement.

Some errors that would allow a Pacific coast for Argentina in Última Esperanza Sound and an Atlantic coast to Chile in San Sebastián Bay were later corrected, the border in Tierra del Fuego was moved from 68°34'00"W (as FitzRoy erroneously marked the "Cabo del Espiritu Santo) to 68°34'40"W (true longitude of the Cabo) giving 626 km2 to Argentina.
Different interpretations of the borderline north of latitude 52°S led to the Arbitration of the British King Edward VII in 1902 (See The Cordillera of the Andes Boundary Case).

Border disputes continued as Patagonia was still an unexplored area.
The concept of the continental divide was easy to apply in northern regions, but in Patagonia, drainage basins crossed the Andes, which led to disputes over whether the highest peaks would be the frontier, favoring Argentina, or the drainage basins, favoring Chile.
Argentina argued that previous documents referring to the boundary always mentioned the Snowy Cordillera as the frontier and not the continental divide.
Argentine explorer Francisco Perito Moreno suggested that many Patagonian lakes draining to the Pacific were part of the Atlantic basin but had been moraine-dammed during the quaternary glaciations, changing their outlets to the west.
In 1902, war was again avoided when King Edward VII of Britain agreed to mediate between the two nations.
He established the current border in the Patagonia region in part by dividing many disputed lakes into two equal parts; most of these lakes still have one name on each side of the frontier.

The dispute that arose in the northern Puna de Atacama was resolved with the Puna de Atacama Lawsuit of 1899, though its real cause was out of the scope of the 1881 boundary treaty and originated from transfers between Bolivia and Argentina of land occupied by Chile during the Pacific war.
According to the Argentine view of the treaty, called the Magellan/Atlantic transfer, the general agreement was that Argentina was an Atlantic country, and Chile was a Pacific one. Chile has never accepted that and the Chilean view was confirmed by the Court of Arbitration in the Beagle dispute (§31 ):
It is on this basis, as well as on the actual attribution of Patagonian territory to Argentina effected by Article II of the Treaty, that the Court reaches the conclusion that it was the antithesis Patagonia/Magellan, rather than Magellan/Atlantic, which constituted the fundamental element of the Treaty settlement.
Some errors that would allow a Pacific coast for Argentina in Última Esperanza Sound and an Atlantic coast to Chile in San Sebastián Bay were later corrected, the border in Tierra del Fuego was moved from 68°34'00"W (as FitzRoy erroneously marked the "Cabo del Espiritu Santo) to 68°34'40"W (true longitude of the Cabo) giving 626 km2 to Argentina. Different interpretations of the borderline north of latitude 52°S led to the Arbitration of the British King Edward VII in 1902 (See The Cordillera of the Andes Boundary Case).
Border disputes continued as Patagonia was still an unexplored area. The concept of the continental divide was easy to apply in northern regions, but in Patagonia, drainage basins crossed the Andes, which led to disputes over whether the highest peaks would be the frontier, favoring Argentina, or the drainage basins, favoring Chile. Argentina argued that previous documents referring to the boundary always mentioned the Snowy Cordillera as the frontier and not the continental divide. Argentine explorer Francisco Perito Moreno suggested that many Patagonian lakes draining to the Pacific were part of the Atlantic basin but had been moraine-dammed during the quaternary glaciations, changing their outlets to the west. In 1902, war was again avoided when King Edward VII of Britain agreed to mediate between the two nations. He established the current border in the Patagonia region in part by dividing many disputed lakes into two equal parts; most of these lakes still have one name on each side of the frontier.
The dispute that arose in the northern Puna de Atacama was resolved with the Puna de Atacama Lawsuit of 1899, though its real cause was out of the scope of the 1881 boundary treaty and originated from transfers between Bolivia and Argentina of land occupied by Chile during the Pacific war.
Boundary Treaty of 1881 between Chile and Argentina