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ATTORNEYS AT LAW FOR MEXICO
Please contact us at our Mexico offices located at:
Apartado Postal No. 9
San Miguel de Allende, Guanajuato, Mexico
TEL. US.: (800) 856-5709
Local Phone (415) 152-3648

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Montecito no. 38 Piso 37 Oficina 37
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Mexico, Distrito Federal

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Law Information

ARBITRATION (DISPUTE RESOLUTION) IN MEXICO

 

Choose one or more: Introduction, General Rules, International Conventions , Mexico's Law on Arbitration, Procedural Rules

UPDATE 2010 BY PROVIDED BY CHRISTA MUELLER GARCIA ESQ., AN ARBITRATION LAW SPECIALIST WITH OFFICES IN MEXICO CITY. If the reader wishes to reach her, please send us an e-mail and we will see that she receives it. 

Introduction

Mexico recognizes arbitration as an alternative for dispute resolution.

Mexico's arbitration statues applies to all national (parties that reside in the same country) and international (parties that reside in different countries) arbitration when the place of arbitration is in Mexico, unless there are treaties or laws that state that certain disputes are not susceptible to arbitration.

The Federal Commercial Code of Mexico and the Civil Procedure Codes of the several state of Mexico set forth basic recognition and use of arbitration. The Federal Commercial Code recognizes the enforcement of foreign abritral awards.

General Rules

The agreement to arbitrate in the case of dispute should be given in writing between the parties ( in the principle contract or a separate agreement) and in the case of invalidness of the contract, the arbitration clause will still exist, unless expressly agreed otherwise or the invalidity extends directly to this agreement to arbitrate.

It is possible to chose specific sets of arbitration rules to solve dispute issues in Mexico, to the extent not contrary to the laws applicable where enforcement is sought.

The most common set of rules will be those promoted by the chambers of commerce. It is possible to authorize the arbitrators to decide according to the rules of law ("derecho", approved by congress / written codified law) or or ex aequo et bono ("de conciencia").

The number of arbitrators is normally one, however three can be chosen (the total must be an uneven number ("número non").

The arbitrators have authority for ordering provisional remedy of protection if requested by the parties, and to require the parties to provide the corresponding security when the arbitrator so determines.

International Conventions

Both the U.S. and Mexico are signatories to the treaties which generally mandate enforceability, as follows:

1. New York Convention (U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards)

2. Panama Convention ( Inter-American Convention on International Commercial Arbitration, Panama 1975)

3. Montevideo Convention ( Inter-American Convention Concerning the Extraterritorial Effect of Judgements and Arbitral Awards).

Mexico's Law on Arbitration

Mexico passed an updated (by Decree) Commercial Arbitration Statute as of July 22, 1993, by modifying and adding to the content of Title 4 "Commercial Arbitration" of the Federal Mexican Commercial Code (see articles 1415 through 1463 of the Commercial Code). This statute is structured after the 1958 United Nations Convention of the Recognition and Enforcement of Foreign Arbitral Awards, and it is as follows:

Choose One or more: General Provisions , Procedures for the Arbitration , The Arbitration Judgement , Enforcement of the Arbitration Judgement , Appeal of the Arbitration Judgement , Recommendations .

I. General Provisions

- A. Controls by Law (The parties to the agreement on arbitration can agree on the controls for the arbitration. If they do not, then the arbitrator(s) can decide taking into account the elements of the case and any connection to any particular country. If no decision is made then the Mexico law controls).

- B. Applicability (This law is applicable to all matters of arbitration in Mexico, whether local or international, provided that it is in Mexico. All of the provisions of an arbitration agreement will automatically include all of the provisions of this arbitration statue.)

- C. Parties Must Agree to Arbitrate (The parties to the dispute can agree to arbitrate when the dispute arises or they can have agreed to arbitrate at the signing of the contract by having placed an arbitration clause in the contract)

- D. Place for Arbitration (The parties to the dispute can chose the place to arbitrate at the time of signing the contract or when the dispute arises, otherwise the law will apply the place that has the most substantial relationship to the contract)

- E. Objections to Arbitration (Objections to arbitrations are to be made prior to or at the commencement of the arbitration, not during or after. If not made before arbitration, then his right to objection therefor will be waived.)

- F. Subsequent Litigation (If any of the parties to arbitration attempts to litigate via judicial court once the arbitration has been agreed upon, the court of law will order the lawsuit be dismissed and that the parties arbitrate the matter as in their agreement.)

- G. Provisional Remedies (The parties to the arbitration may ask a court of law to provide/grant provisional remedies (without defining what they are), either prior to or during the arbitration process. This is different than the Arizona Arbitration Act, since the latter does not have this.)

- H. Makeup of the Arbitration Court ( The arbitration court will be made-up of either 1 or 3 member arbitrators (uneven number), as is agreed upon by the parties prior to or at the time of arbitration . In the event that the parties do not agree (within 30 days), then it will be one arbitrator, and if the parties do not agree upon the arbitrator's person (within 30 days), then the court will decide who shall be the arbitrator. When the disputing parties decide on three members of the tribunal, each will chose one of them and the chosen members will chose the third.)

- I. Bond (The arbitrator(s) may (upon request form the parties) require that either or both of the disputing parties put up a bond to secure the payment of costs and the judgement.)

- J. Objection to & Disqualification of the Arbitrator(s) (When the parties show conflict of interest, partiality or prejudice in favor of one of the parties over the other, they may object to the arbitrator. Arbitrators will, upon receiving their appointment, reveal any conflict if interest they may have and disqualify themselves. )

II Procedures for the Arbitration

- A. Decisions on Procedure (The presiding arbitrator (president) may decide on questions of procedure if authorized by the parties or authorized by the other member arbitrators that make up the arbitration court.)

-B. Evidence and It's Receipt (This is at the discretion of the arbitrators. The arbitrators can see the assistance of the court of law for assistance in acquiring the evidence it needs. Any communication that was personally delivered to the addressee's normal residence shall be considered received as long as it is sent to the last known address by certified mail. This communication will be considered delivered/received on the date delivery was made.)

- C. Language (The language is chosen by agreement of the parties, or if they can not or will not agree, then the language is chosen by the arbitrator(s).)

- D. Pre-hearing Declaration/Statement (Each party to the arbitration is to provide, in writing, a declaration/statement of the points he/she is in agreement with and those he/she is not, and to provide that evidence he/she has to justify his/her position. If the plaintiff does not file his/her statement of claims and facts, then the arbitration will be terminated.)

- E. Hearing (No hearing is needed unless the Arbitration court decides is needs one, or one or both of the parties so requests.)

- F. Default Judgement (If either of the parties is not present at the hearing or does not respond to (answer) the complaint, the arbitrator(s) can issue judgement in basis of the evidence that is presented.)

- G. Experts (The arbitration court may acquire experts, when they believe they are needed.)

- H. Requisition of Attendance of Witnesses or Delivery of Documents (The arbitrators must request that the judicial/law court judges issue the requisition.)

- I. Law Applicable (The parties may agree upon which law is applicable to their matter. However, if they can not or will not agree upon the applicable law, then the arbitrator(s) will decide, by using the law of the state that has more substantial relationship with the contract in question.)

III The Arbitration Judgement

- A. Full Authority of the Arbitrator(s) (The arbitrators have full authority to decide a dispute, including determining the admissibility, relevance and force/weight of evidence.)

- B. By Majority Rule (Where there are 3 members to the arbitration court, the majority decision will be the ruling one.)

- C. The Judgement Confirming a Composition/Decision (The judgement settling the matter is enforceable.)

- D. The Written Arbitration Judgement (This judgement must be in writing and signed by the members of the arbitration court. Each of the parties to the arbitrated dispute is to receive an original copy of the judgement.)

- E. Expenses of the Arbitration Process (The party that is considered as having lost under the arbitration will be the one to pay for the arbitration process. If there is no complete winner but each party wins a point, then the expenses will be prorated between them. The expenses will include the fees of the attorneys, if the parties had agreed upon this at the commencement of the procedure. The parties can agree to prorate the costs independent of whomever wins.)

-F. Interpretation of the Judgement (The parties may request the interpretation of a judgement and if the arbitration court deems it correct, it will give the interpretation within 30 days and it will become part of the judgement. If the parties believe that certain presented claims were not addressed in the judgement, they may request to have them included, and the arbitration court will decide on it.)

IV. Enforcement of the Arbitration Judgement

- A. Judicial Intervention ( Judicial intervention is not required in arbitration except to enforce and execute an arbitration award.)

- B. Agreement of the Parties (The parties to the arbitration may agree upon the terms and manner of the enforcement of the judgement).

- C. U.S.A. (The Federal District Courts in the U.S.A. will be the ones to enforce the arbitration judgement.)

- D. Mexico (The enforcement of the arbitration judgement in Mexico is done pursuant to it's Article 360 of the Federal Civil Procedures Code)

V. Appeal of the Arbitration Judgement

- A. Limited Appeal (The appeal it a court of law will be permitted: if there is a lack of legal capacity by one of the parties to submit himself/herself to the arbitration process, if the agreement is contrary to the law, if one or more of the parties to the arbitration process did not receive notification of the arbitration process, if the arbitration judgement (award) went further than the extent of the arbitration agreement. This appeal is to be made to the court wherein the arbitration award was given.)

VI. Recommendations

In general terms this law was well done, however, it does have certain ambiguities. One of the good points is that the parties that will be going to arbitration may chose those procedural rules they wish to achieve the resolution of the dispute and the arbitration judgement. The recommendation given by many is that the rules chosen be those of a private arbitration organization.

Procedural Rules

Arbitrational contracts may establish by reference all published procedural rules of:

1. The International Chamber of Commerce (ICC)

2. The Inter-American Commercial Arbitration Commission (IACC)

3. The American Arbitration Association (AAA)

4. United Nations Commission on International trade Laws (UNCITRAL)

5 Or if the rules are not set in the arbitration contract, then per the rules of Mexican legislation.

 

2010 UPDATE ON ARBITRATION IN MEXICO

`This update is provided by Christa Mueller García (law degree in 2001 from the Instituto Tecnológico Autónomo de México - ITAM) and has been involved as an arbitration practitioner since 1998. Her experience in diverse arbitrations ranging from ordinary commercial and ad hoc arbitration to complex state arbitration proceedings, participating both as a litigator and assistant secretary to major renown arbitrators qualify her as an expert in international commercial arbitrations. Expertise in arbitration has been fostered directly from the ICC International Court of Arbitration as well as leading arbitration firms in Mexico. If the reader wishes to contact her, please send us an e-mail and we will see that she gets your request.

"                   International Commercial Arbitration in Mexico

  Introduction. In Mexico as in other countries, arbitration is an alternative method of dispute resolution parties may choose in order to resolve any controversy that may arise out of or in connection with their contracts. Arbitration has been widely accepted and developed in Mexico both by private parties as by the judicial courts.

  As a general rule, all disputes which are not expressly excluded, do not involve

public policy matters or do not impinge upon third-party rights may be arbitrated, however certain matters are expressly excluded as non-arbitrable[1]..

  Regulation of both national and international commercial arbitration in Mexico is provided by Chapter IV of the Commerce Code, which incorporated the Model Law in Arbitration of the United Nations Commission on International Trade Law (UNCITRAL)

  The exponential growth of arbitration in Mexico has been met with the creation of two arbitration institutions which stand out as reliable: CAM “Centro de Arbitraje de México” (Mexican Arbitration Centre) and CANACO “Cámara Nacional de Comercio de la Ciudad de México” (Mexico City Chamber of Commerce).

  Arbitration Agreement.  For their enforceability, parties should refer that they wish to submit any present or future dispute to arbitration. Therefore, arbitration agreements need to be in writing and signed by the parties; a verbal agreement in not sufficient.

  Arbitral Proceedings. In all arbitral proceedings the parties must be given equal treatment and given the full opportunity to assert its rights. Parties can freely agree on the place of arbitration, law applicable to the substance of the dispute, as well as the language to be used in the activities of the arbitration.

  Arbitral proceedings initiate with the request of plaintiff to submit the dispute to arbitration. Claimant shall stat the facts on which the claim is based, the disputed matters and the relief it is seeking.  Respondent must answer all points in the claim.

  The parties can establish the specific rules for the taking of evidence and the need to hold a hearing or not.

  Finally the arbitration proceeding terminates with the issuance in writing of the final arbitral award which must be signed by all arbitrators

  Recognition and Enforcement of Arbitral Awards. In Mexico, the recognition or enforcement of an arbitral award will generally proceed after the presentation of a written petition to a judge; nevertheless, said recognition or enforcement can be denied when the party against whom it is invoked proves before the competent judge any of the circumstances considered in articles 1457 or 1461 of the Commerce Code.

  Based on the foregoing, Mexico has been called the place of choice for arbitratin in Latin America. Sophisticated arbitration proceedings can be, and frequently

Are, followed under the Mexican statute in congruence with international arbitration practices.

  The arbitration procedure provisions have generally been adequately interpreted and applied by Mexican Courts, who are regarded as arbitration friendly due to the increasing willingness to respect arbitration proceedings and enforcement of awards.


[1] Criminal liability, family law and Civil Status matters, bankruptcy, both personal and commercial, and territorial resources and waters within Mexican Territory; among other are not subject to arbitration.

 

 

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