Introduction
Challenging competence
Timing of challenge
Comment


Introduction

The Constitution guarantees the administration of justice, allowing parties to resolve disputes before a judicial body. However, certain subjective rights can be waived in order to choose an alternative dispute resolution mechanism, such as commercial arbitration, provided that such rights are not rights of public order or social interest (eg, the alimony that a minor is entitled to receive).

Thus, by signing an arbitration clause, the parties to the arbitration agreement freely and voluntarily grant an arbitrator or arbitration tribunal full and sufficient competence to resolve conflicts that might arise between them due to the execution of a commercial contract.

Challenging competence

Mexican law provides that an arbitration tribunal's competence can be challenged by any of the parties that sign an arbitration clause if they acted unwilfully or without consent during its execution.

The Mexican legislative system clearly establishes that an arbitration tribunal can decide on its own competence, under the doctrine of competence-competence. In addition, since an arbitration clause is considered to be an independent agreement to the contract in which it is established, if the contract is declared null, the arbitration clause will remain valid, and vice versa.

Timing of challenge

The exception under which an arbitration tribunal's competence to hear a dispute can be questioned must be raised when responding to the arbitration action.

However, the question arises as to when is the ideal moment for the arbitration tribunal or the arbitrator to resolve a competence challenge raised by a party. This is because in accordance with the legislation, such a challenge can be resolved from the moment that it is raised until the issuance of the arbitration resolution that decides the merits of the case.

If an arbitration tribunal resolves a competence challenge as soon as it arises (ie, before issuing the final arbitration resolution) and declares itself competent to hear the matter, the affected party could go before a judicial body to finally resolve the issue, which could affect the arbitration procedure.

Accordingly, the decision of the judicial body (which resolves the competence challenge) will be unappealable. While its resolution is pending, the arbitration tribunal may continue its actions and could even issue a final arbitration resolution. In such cases, if the challenge made before the jurisdictional authority succeeds and an arbitral decision has already been issued, the decision would become null.

Thus, in practice, arbitration tribunals often resolve the competence challenges after the final arbitration resolution has been issued, thereby avoiding boycotting the arbitration procedure.

Comment

Parties are advised to have an arbitrator or arbitration tribunal with sufficient experience to resolve a competence challenge as soon as it arises rather than waiting until the arbitration resolution has been issued, since an experienced arbitrator will observe the arbitration procedure and ensure the validity of the final arbitration resolution so that it is enforceable.

In arbitration, the parties' choice of arbitrator is crucial because the validity and soundness of the final arbitration resolution will depend on their experience.

For further information on this topic please contact Raúl Herrera Hazas at Becerril, Coca & Becerril SC by telephone (+52 55 5263 8730) or email ([email protected]). The Becerril, Coca & Becerril website can be accessed at www.bcb.com.mx.