On 27 January 2011, the Mexican Commerce Code was amended in order to add Chapter X “Judicial Intervention in Commercial Transaction and Arbitration” comprising articles 1464 to 1480. The amendment deals with I) the referral of the dispute to arbitration; II) judicial assistance to the constitution of the arbitral tribunal, the presentation of evidence and the fees of the Arbitral Tribunal; III) a special trial and IV) interim measures.
- Referral of the Dispute to Arbitration
Prior to the reform, the referral to arbitration could be executed at any time, even before rendering the judgment (Third Collegiate Civil Court of the First Circuit. REMISIÓN AL PROCEDIMIENTO ARBITRAL… Ninth Period, Registry No. 176471, December 2005). With the new amendment a judge shall refer the parties to arbitration, if a party so requests not later than when submitting his first statement on the substance of the dispute. Once the request for referral is submitted, the judge shall inform the parties and immediately resolve the matter. If the judge orders to refer to arbitration, he shall also hold the proceedings in abeyance. There is no remedy against the resolution for referral to arbitration. When the case is finally resolved through arbitration, the judge shall end the proceedings at the request of any party (article 1464).
If the dispute is not settled by means of arbitration, any of the parties may request the judge to continue with judicial proceedings. A judge may refuse a referral to arbitration on the basis of the following grounds: 1) that the arbitration agreement was annulled by a court decision or arbitration award; or 2) that the arbitration agreement is manifestly null, ineffective or unenforceable (article 1465).
- Judicial Assistance
The voluntary jurisdiction is the adequate proceeding in order to: 1) request the appointment of arbitrators; 2) request judicial assistance for the presentation of evidence; 3) consult the fees of the arbitral tribunal (article 1466 fractions I, II and III).
A special trial was established in order to deal with the following matters: 1) Challenge of arbitrators; 2) the jurisdiction of the arbitral tribunal; 3) interim measures either before or during the arbitral proceedings; 4) recognition and enforcement of interim measures ordered by the arbitral tribunal; 5) setting aside an arbitral award; and 5) recognition and enforcement of an arbitral award (articles 1470 and 1471). The special trial comprises the following stages: Once the claim is accepted, the judge shall notify the respondent, who shall have 15 days to reply (article 1473). If parties do not submit evidence and if the judge deems the presentation of evidence as unnecessary, the judge shall summon the parties for the hearing on closing arguments within three days (article 1474). If evidence has been presented or the judge deems it necessary, an additional period of 10 days shall be granted (article 1475). Once the hearing takes place, the judge shall summon the parties to hear the decision. Intermediate resolutions and final resolutions ordered under this special trail shall not be subject to appeal.
The judge has full discretion in the adoption of interim measures. Either a party that requests interim measures or the arbitral tribunal which issues such measures are liable for damages and lost profits. It seems an unfortunate provision, since there is a manifest opportunity to claim against the arbitrators for the measures. However, parties may contractually waive the responsibility of arbitrators. The arbitration rules most commonly used in Mexico contain provisions for this exclusion of liability.
One of the most successful provisions of this reform is found in article 1479, under which interim measures issued by an arbitral tribunal shall be recognized as binding and enforced upon application to the competent judge, irrespective of the country in which it was issued. A judge may order the requesting party of recognition or enforcement of an interim measure, to provide appropriate security, if the arbitral tribunal has not made a determination regarding the security.
The judge may refuse the enforcement of an interim measure based on one of the following grounds: 1) that a security requested by the arbitral tribunal has not been provided; 2) that the interim measure has been terminated or suspended by the arbitral tribunal; 3) that the interim measure is incompatible with the powers of the judge; 4) that the dispute is not capable of settlement by arbitration under Mexican laws or the recognition or enforcement of the interim measure is contrary to public policy, among other grounds (article 1480).
The reform provides greater certainty as regard the framework of judicial action. In this way, the Mexican arbitration law consolidates significant progress on judicial intervention. There is remaining some practice in order to analyze the performance of these new provisions and determine their effectiveness and timely assistance in arbitration.