- 1.Which legislation governs the enforcement of international commercial arbitration awards and arbitral agreements in international business contracts, and international commercial arbitration proceedings?
The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (New York Convention or NYC), the Inter-American Convention on International Commercial Arbitration, Panama, 30 January 1975 and the Code of Commerce (CC), articles 1424, 1461 and 1462 (UNCITRAL Model Law on International Commercial Arbitration (UMLA) articles 8, 35 and 36). Court procedures on referral to arbitration CC articles 1464, 1465, and on recognition and enforcement articles 1471-1477.
Mexico implemented the UMLA for international and domestic commercial arbitration, thus the legal regime is identical for both kinds of arbitration. Notwithstanding the CC contains a definition of international commercial arbitration; which serves to no practical purposes. An international commercial arbitration occurs where (CC. article 1416-II):
- the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their places of business in different countries; or
- the place of arbitration, determined in, or pursuant to, the arbitration agreement, the place where a substantial part of the obligations of the commercial relationship is to be performed, or the place with which the subject matter of the dispute is most closely connected, is situated outside the country in which the parties have their places of business.
For the above referred purposes, if a party has more than one place of business, the place of business is that which has the closest relationship to the arbitration agreement, and if a party does not have a place of business, reference is to be made to its habitual residence.
- 2.Has the UNCITRAL model arbitration law been adopted in your jurisdiction?
On July 1993, Mexico incorporated the UMLA (articles 1415 to 1463, Title Four of Book Five of the CC). The only substantial difference between the CC and the UMLA is that the CC applies also to domestic arbitration. Other differences are minor; for instance, one arbitrator is the default rule, instead of three arbitrators (article 1426, UMLA article 10).
- 3.Is your jurisdiction a party to both the New York Convention and the Panama Convention? Is it a party to any other conventions or treaties governing international commercial arbitration agreements, awards or proceedings?
Mexico has been party to the NYC since 1971 and to the Panama Convention since 1978. Mexico is also party to the Inter-American Convention of Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo Convention), since 1987. Mexico entered into a bilateral Convention for the Recognition and Enforcement of Judgments and Arbitral Awards in Civil and Commercial Matters with Spain in 1992.
- 4.Is your jurisdiction a party to the ICSID Convention? Have steps been taken to renounce the Convention or withdraw from ICSID?
- 5.Has your jurisdiction refused to honour an international arbitral award issued against it?
- 6.Is a pre-dispute clause or separate agreement to resolve international commercial disputes by arbitration enforceable?
Yes. The rule of pacta sunt servanda is the seminal rule of Mexican law on obligations and contracts (CC article 78). Under Mexican law, there is no need of a post-dispute ‘compromiso’ (CC articles1423, 1424, UMLA articles 7, 8).
- 7.Is a pre-dispute clause or separate agreement to resolve disputes by arbitration enforceable in consumer cases? Is there any legislation in your jurisdiction governing the arbitrability of consumer disputes?
Consumers protection is regulated mandatorily by the Federal Law for Consumer Protection (CPL). The CPL provides for pre dispute mediation and arbitration before the Federal Consumer Protection Agency (articles 99 to 122 of the CPL).
- 8.What are the requirements for an enforceable arbitral agreement?
The arbitral agreement shall be in writing. An arbitration agreement shall be considered in writing if it is contained in:
- a document signed by the parties;
- an exchange of letters, telex, telegrams, facsimiles or other means of telecommunications that provide evidence of the agreement;
- an exchange of statement of claim and defences in which the existence of the agreement is alleged by one party and not objected by the other;
- the reference in a contract to a document containing the arbitration agreement, provided that such contract is in writing and the reference is such that the arbitration agreement is part of the contract (CC, article 1423 , UMLA article 7).
- 9.Is there a subject matter that is not legally subject to arbitration in the context of an international business transaction?
Only a handful of subject matters are expressly considered not subject to commercial arbitration under Mexican law. The Federal Code of Civil Proceedings (article 568) reserves for national courts the following matters:
- land and water resources located within Mexican territory;
- resources located in the sea exclusive economic zone;
- acts of authority or pertaining to the internal regime of the state and federal entities; and
- the regime of embassies and consulates of Mexico abroad and their official activities.
Labour disputes are submitted to mandatory arbitration that is akin to court proceedings. Criminal and tax disputes are not arbitrable; and, in general, family disputes, eg, alimony, divorce, marriage annulments, civil status of persons and others. In addition, the use of arbitration is, at least limited, regarding the following matters: intellectual property (the Industrial Property Law and the Author’s Federal Right Law allow for arbitration to solve disputes only between private entities), telecommunications, procurement law and public works (although Pemex and CFE, the state-owned oil and electricity companies, respectively, have express authorisation to arbitrate their disputes), contracts of the private sector with public sector (Law of Public and Private Associations does not allow arbitration for acts of authority of public entities or revocation of the concession to exploit public services or public goods), and antitrust matters.
- 10.Does the law specify whether an arbitration will be in equity or under law if the parties do not expressly specify the nature of the arbitration in the agreement?
Arbitral tribunals can only resolve in equity (ex aequo et bono) if the parties so expressly agreed (CC article 1445, UMLA article 28).
- 11.How does the law limit party autonomy with respect to the terms of an arbitral agreement?
In principle, there are no limits to party autonomy in regard to the arbitration agreement. Naturally, the parties are free to agree upon anything except the provisions that all parties shall be treated equally and each party shall have the opportunity to present its case; and, also, that arbitrators shall be impartial and independent (CC articles 1428, 1434, 1435, UMLA articles 12, 18 and 19).
- 12.Under what circumstances does the law allow a non-signatory to an arbitral agreement to pursue a claim in an international arbitration against a party that signed the arbitral agreement?
Only parties to the arbitration agreement can be parties to the arbitration.
- 13.Under what circumstances does the law allow a signatory to an arbitral agreement to pursue a claim in an international arbitration against a party that signed the arbitral agreement?
In the terms of the arbitration agreement, a signatory to an arbitral agreement is unconditionally entitled to pursue its claims in international or domestic arbitration against any party that signed the arbitral agreement.
- 14.Under what circumstances may a non-signatory to an arbitral agreement compel arbitration of a claim asserted against it by a signatory of the arbitral agreement in a court of law?
In Mexico only parties to the arbitration agreement can be parties to the arbitration. A non-signatory cannot compel arbitration of a claim asserted against it by a signatory of the arbitration agreement in a court of law.
- 15.Under what circumstances may a signatory to an arbitral agreement compel arbitration of a claim asserted against it by a non-signatory of the arbitral agreement in a court of law?
Again, in Mexico only parties to the arbitration agreement can be parties to the arbitration. A signatory to an arbitration agreement cannot compel arbitration of a claim asserted against it by a non-signatory in a court of law.
- 16.Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration?
There are no class action arbitrations or group arbitrations in Mexico; only multi-party arbitration.
- 17.Are foreign arbitral institutions authorised to administer arbitrations in your jurisdiction? Does the law require that a foreign institution be licensed under local law in order to administer an arbitration seated there?
Foreign arbitral institutions are under no obligation to obtain a licence or authorisation to administer arbitrations in Mexico. ICDR, ICC, LCIA, and other arbitrations, are regularly conducted in Mexico.
- 18.Is an arbitral award issued in an arbitration seated in your jurisdiction under the auspices of a foreign institution such as the ICDR, the ICC or the LCIA vulnerable to challenge?
No. The grounds for setting aside or denying recognition and enforcement are the same for all awards.
- 19.Does the law require that arbitrators in international arbitrations be citizens or residents of your jurisdiction?
There are no requisites of nationality, residence, domicile or other circumstances under Mexican law that would restrict the appointment of an arbitrator (CC article 1427, UMLA article 11).
- 20.Does your law require that arbitrators in international cases be lawyers?
Mexican law, requires no requisites of profession or other circumstances to serve as arbitrator (CC article 1427, UMLA article 11).
- 21.Are the fees of foreign arbitrators serving in an arbitration seated in your jurisdiction subject to taxation?
There is no specific taxation for foreign arbitrators. Fees of foreign arbitrators may be taxable when they fall under taxable circumstances according to Mexican tax law.
- 22.Must arbitrators in international arbitrations be independent and impartial? What is the legal standard governing conflicts of interest and disclosure by arbitrators in international arbitrations?
Arbitrators must be independent and impartial; no rules, standards or guidelines are imposed under Mexican law. Thus, there are no known published cases, mainly because decisions on the challenge of arbitrators are generally rendered by the arbitral institutions without providing reasons.
- 23.Will courts entertain requests to disqualify an arbitrator during an arbitration?
Challenges to arbitrators are decided in accordance with the agreement of the parties (which includes the Rules agreed); failing such agreement by the arbitral tribunal. The decision of the arbitral tribunal rejecting the challenge can be contested before the competent courts (CC, article 1429 UMLA article 13).
- 24.Does the law require that arbitral proceedings be held in a specific language?
Parties are free to agree on the language or languages of the arbitration (CC article 1438, UMLA article 22).
- 25.Can foreign lawyers serve as advocates in arbitral proceedings in your jurisdiction? If so, can they do so alone or must a local lawyer serve as co-counsel?
Foreign lawyers regularly intervene as advocates in arbitral proceedings in Mexico.
- 26.Are the fees of foreign layers earned for services rendered in connection with an arbitration seated in your jurisdiction subject to local taxation?
There is no specific taxation for foreign lawyers. Fees of foreign lawyers may be taxable when they fall under taxable circumstances according to Mexican tax law.
- 27.In what circumstances, if any, does your law allow the consolidation of multiple arbitral proceedings?
Only when the agreement of the parties allows, or otherwise provides so.
- 28.Please describe common practice and usage in international arbitrations seated in your jurisdiction with respect to a party’s right to require an opposing party to produce documents pertinent to the dispute.
Under the CC (article 1435) and must-know rules, a limited exchange of documents is becoming a regular practice in Mexico. In that regard, the IBA Rules on the Taking of Evidence in International Arbitration are often followed as guidelines. Also the ICDR Guidelines for Arbitrators Concerning Exchanges of Information.
- 29.Is the principle of ‘Kompentenz-Kompetenz’ followed in the courts?
Under Mexican law arbitrators are competent to determine their own jurisdiction (CC articles 1424 and 1432, UMLA articles 8 and 16, NYC article II (3)). An amendment to the CC (January 2011), clarifies this issue and establishes that when a claim covered by an arbitration agreement is filed before a court, at the request of a party, the court shall stay its proceedings and refer the parties to arbitration (CC article 1424 and 1464). A further amendment provides that if a foreign resident files for litigation having expressly executed an arbitration agreement, the court shall refer the parties to arbitration without the need of the request of the other party (CC article 1424).
- 30.Do the courts follow the principle of the independence and separability of the arbitration clause?
The CC recognises the principle of independence and separability of the arbitration clause (article 1432, UMLA article 16). See question 29.
- 31.If a party files a lawsuit in violation of an agreement to arbitrate, will a petition by the defendant to remit the lawsuit to arbitration be granted by the courts under normal circumstances? If so, will that petition be treated as a threshold matter or will it be rolled into the merits of the litigation such that the defendant will also need to defend the merits of the lawsuit in court?
The court shall immediately stay the proceedings and refer the parties to arbitration (CC article 1464). See question 29.
- 32.Are arbitral tribunals empowered to grant interim relief? If so, how is that relief enforced in the courts?
Arbitral tribunals are empowered to grant interim relief (CC article 1433, UMLA article 17 (1980 version).
The January 2011 amendment to the CC (article 1479), incorporated article 17 H of the UMLA (as amended in 2006), and provides court enforcement of interim relief (IM) granted by arbitral tribunals, irrespective of the place of arbitration. There is a short court procedure to give the respondent its day in court (CC articles 1470-IV, 1472-1476). The Mexican court shall not undertake a review of the substance of the IM (CC article 1480-II b), UMLA article 17 I (2)). The new UMLA system for the recognition and enforcement of arbitral “IM”, follows the pattern of the NYC: the burden of proof of the causes allowing a court the deny recognition and enforcement of an IM, is on the respondent. The causes are also similar to those of the NYC (article V) and the CC (article 1462, UMLA article 36(1)(a)(i), (ii), (iii) or (iv)) CC articles 1479, 1480-I (a), UMLA articles 17 H and 17 I(1)(a)(i)).
Also when the arbitral tribunal’s decision with respect to the provision of security in connection with the IM issued by the tribunal has not been complied with (CC article 1480-I (b), UMLA article 17 I(1)(a)(ii)); the IM has been terminated or suspended by the arbitral tribunal or, where so empowered, by the court of the state in which the arbitration takes place or under the law of which the IM was granted (CC article1480(I(c), UMLA article17 I(1)(a)(iii)); or if the court finds that the interim measure is incompatible with the powers conferred upon the court, unless the court decides to reformulate the IM to the extent necessary to adapt it to its own powers and procedures, but without modifying its substance (CC article1480-II (a), UMLA article 17 I(1)(b)(i)); or the court finds that the subject matter of the dispute is non arbitrable under its law, or is in conflict with the public policy of Mexico (CC articles 1462-II, 1480-II (b), UMLA article 17 I(1)(b)(ii)).
Any determination made by the court shall be effective only for the purposes of the application to recognise and enforce the IM (CC article 1480-II UMLA article 17 I (2)).
- 33.Can arbitrators issue orders, subpoenas or use other legal processes to compel the production of evidence by a third party or compel a third-party witness to appear before them? If so, will a court lend its aid in enforcing such an order against a recalcitrant third party?
Arbitrators have no power over third parties to the arbitration agreement. CC (article 1444, UMLA article 27), provides that the arbitral tribunal may request from a judge assistance in taking evidence. There is no evidence that this power has been exercised and the extent of the assistance that a court may grant. The delays of recurring to the judiciary will cause more disruption than benefits to the arbitral proceedings.
- 34.Can a party to an arbitration seek relief from the court to obtain evidence in aid of an international arbitration? What is the scope of such relief?
CC (article 1444, UMLA 27) provides that a party with the approval of the arbitral tribunal may request judge assistance in taking evidence. See comment to question 33.
- 35.Can a party in an international commercial arbitration seek interim or provisional relief from a court without first seeking relief from the arbitral tribunal?
The parties may, before or during arbitral proceedings, request a judge to take an interim measure of protection (CC article 1425, resembles, but differs, UMLA article 9).
- 36.Have the courts issued injunctions enjoining arbitral proceedings from going forward?
In matters regarding commercial arbitration (Title Four of Book Five of the CC), no judicial intervention shall be required except when so provided in the arbitration Chapter of CC (CC article 1421, UMLA article 5). Title Four does not provide for such injunctions.
- 37.Does the law provide that post-award interest accrues on an unpaid arbitral award?
All matters regarding post-award interest need to be decided in the award by the arbitral tribunal.
- 38.Is an arbitral tribunal empowered to award attorneys’ fees to the prevailing party or is that power reserved to the courts?
The arbitral tribunal is empowered to award attorneys’ fees (CC article 1452). Courts do not have such a power.
- 39.What are the grounds for challenging an international award issued in an arbitration seated in your jurisdiction?
Only those provided for in the NYC (article V) and CC (article 1462, UMLA article 36).
- 40.Is ‘lack of reasonableness’, manifest disregard or a mistake in the application of the substantive law to the dispute of an international award grounds to vacate it?
- 41.To what degree have international awards rendered in your jurisdiction been vacated on the grounds of ‘public policy’?
- 42.What is the period of time a party has to challenge such an award?
Three months from the date in which the award or its correction and interpretation, as the case may be, was notified to the corresponding party (CC article 1458, UMLA article 34).
- 43.Please describe the standard used by the courts in deciding whether to vacate an international arbitral award rendered in your jurisdiction.
Mexico is part of the NYC and Mexican courts have performed accordingly. Eventually a lower court unduly vacates an award, but the experience always has been that the misdeed is corrected by the federal circuit courts that have the last word.
- 44.Please describe any recent significant experiences or cases that illustrate the attitude of your courts toward the annulment of international awards rendered in your jurisdiction.
See answer to question 43. Recently there was much ado because lower courts vacated a much-publicised case (Grupo Radio Centro). The vacating decision was reversed by the federal district court that finally decided the case.
- 45.Do the courts consider themselves empowered to vacate an arbitral award rendered in another jurisdiction?
No. The jurisdiction to vacate awards resides in the court of the place of arbitration (CC article 1422).
- 46.May parties waive all court review of an arbitral award rendered in your jurisdiction (or restrict or expand the scope of that court review)?
The only recourse against an award rendered in Mexico, is annulment or setting aside (CC article 1457, UMLA 34). When recognition and enforcement is sought before Mexican court, the party against whom the award was issued may raise the defences on the NYC (article V) and CC (article 1462, UMLA 36).
The scope of the court review cannot be amended by the agreement of the parties.
- 47.Please describe the process for enforcing an arbitral award rendered in another jurisdiction.
The petition must be filed before the first instance court (whether local or federal) located in the debtor’s place of business or assets location. The requesting party shall supply the duly authenticated original award or a duly certified copy thereof, and the original arbitration agreement or a duly certified copy thereof. If the documents are not made in Spanish the party shall supply a translation by an official expert (CC article 1461, NYC article IV).
The respondent shall be given 15 (court) working days to produce its answer (CC article 1473). Once the 15-day term has elapsed, the judge will convene to a hearing, unless a party request a pre-hearing probatory term, or the judge determines it is needed. The probatory term shall not exceed 10 (court) working days. After the hearing, the judgment shall be issued and cannot be appealed, but the losing party may file an ‘amparo’ (federal court revision), before a federal circuit court. The federal circuit court decision is final. When a party alleges a direct violation to the Mexican Constitution, then the Supreme Court shall make a decision. In a few cases this possibility has been unsuccessfully used by unscrupulous litigators to delay enforcement.
- 48.Assuming that the award is covered by a convention applicable in your jurisdiction, how long does it take to obtain an order of enforcement in the first instance? How long does it take for the enforcement process to run its full course through to the last instance?
There is no published data to obtain an average. In our experience a three month period before the lower judge, and a similar term before the federal circuit court are reasonable expectations. Naturally, there are cases in which exceptional circumstances appear and the terms may be much longer; eg, the Grupo Radio Centro case.
- 49.Please compare how long it takes to enforce an arbitral award rendered abroad with how long it takes to domesticate a foreign judgement?
Mexico applies the NYC and the UMLA system, thus no homologation is required; only a court proceeding giving the respondent its day in court. There are no differences between international and domestic awards.
- 50.Please describe some significant recent experiences with the enforcement of foreign arbitral awards.
Mexican courts enforce foreign and domestic awards regularly.
- 51.To what degree has ‘public policy’ been a ground to refuse enforcement of an international award rendered abroad?
There have not been cases in which a Mexican court has refused enforcement of an international award on grounds of ‘public policy’. Mexican courts have not issued a concept of ‘public policy’, applicable to the interpretation of article V of the NYC.
- 52.Can a foreign arbitral award be enforced if the award has been set aside by the courts at the seat of the arbitration?
The possibility, as in the Chromalloy case, exists; but, so far, no such a case has occurred.
- 53.What is your view of the future of international arbitration and is the trend positive in your jurisdiction? What advice do you have with respect to dispute resolution for a foreign lawyer advising a foreign client contemplating entering into a business deal with a company from your jurisdiction?
Mexican perspectives regarding arbitration, international and domestic, are quite positive. The January 2011 reform of the CC is the best showing of this. The increasing interest on arbitration and resorting to arbitration is out of the question. As objective data, there is the increased activity of the arbitral institutions, either for educational purposes or for the promotion of their services, large law firms have created or increased their arbitration sections. The judiciaries, both federal and state courts, publicly promote and state their interest in supporting arbitration and ADRs. Many law schools now include commercial arbitration as a subject; or, at least, offer postgraduate courses in the subject matter.
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