Adrián Magallanes Pérez and David Ament, Von Wobeser y Sierra, SC
This is an extract from the first edition of GAR’s The Guide to Challenging and Enforcing Arbitration Awards. The whole publication is available here.
Applicable requirements as to the form of arbitral awards
Applicable legislation as to the form of awards
1 Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?
Pursuant to the Mexican Commerce Code (the Commerce Code), all arbitral awards must be in writing and signed by the arbitrators, indicating the seat of the arbitration and the date on which it was signed. If there is more than one arbitrator, only the signatures of the majority are necessary. However, the award must include the reasons why any arbitrators failed to sign. The award must also contain the reasons for the decision, unless the parties have agreed otherwise or settled their dispute.
Applicable procedural law for recourse against an award
Applicable legislation governing recourse against an award
2 Are there provisions governing modification, clarification or correction of an award?
Parties may request the correction of miscalculations, typographical errors or other types of formal mistakes up to 30 days after the parties have been notified that the award has been issued. If the arbitral tribunal identifies any mistakes itself, it can make the necessary corrections on its own initiative.
The parties may request an interpretation of a specific point or section of the award. If the arbitral tribunal considers this request is justified, it will issue its interpretation of the award within 30 days of the request. This interpretation is considered to be part of the award.
Appeals from an award
3 May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?
Under Mexican law, an appeal seeks to overturn or modify the decision contained in the award. The setting aside procedure seeks to render the award null and to prevent it from being enforced.
As a general rule, an arbitral award may not be appealed. Under the Commerce Code, awards are considered binding and final, unless otherwise agreed by the parties. It is rare that parties agree to an appeal mechanism under Mexican law and practice.
Arbitral awards can be set aside by a local or federal court in any of the following situations:
- one of the parties to the arbitration agreement was not legally capable;
- the arbitral agreement was not valid under the law to which the parties have subjected it or, in the absence of an agreement, to Mexican law;
- the party was not given proper notice of the appointment of an arbitrator or the arbitral proceedings, or was unable to enforce its rights for any reason;
- the award deals with issues not included or falling outside the scope of the arbitration agreement;
- the constitution of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties;
- the subject matter of the procedure was not arbitrable; or
- the award breaches public policy.
The judgment issued by the court in a setting aside procedure cannot be appealed, but can be challenged through an amparo claim by federal courts.
Applicable procedural law for recognition and enforcement of arbitral awards
Applicable legislation for recognition and enforcement
4 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?
The recognition and enforcement of arbitral awards in Mexico is governed by the provisions contained in the Fourth Title (entitled Commercial Arbitration) of the Fifth Book (entitled Commercial Trials) of the Commerce Code, which was amended in 1993 to incorporate the United Nations Commission on International Trade Law (UNCITRAL) Model Law of 1985 (the Model Law) as Mexico’s arbitration law, with only a few minor modifications. In 2011, the Commerce Code was amended again to incorporate some of the 2006 amendments to the provisions of the Model Law.
Regarding multilateral treaties facilitating recognition and enforcement of arbitral awards, Mexico is a party to the New York Convention of 1958, ratified in 1971, the Inter-American Convention on International Commercial Arbitration (Panama Convention), ratified on October 1977, the Inter-American Convention of Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo Convention), ratified in 1987, and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), which entered into force in 2018.
Regarding bilateral treaties on arbitration, Mexico is a party to the Convention on the Recognition and Enforcement of Foreign Judgments and Arbitral Awards in Civil and Commercial Matters with the Kingdom of Spain since 1992.
The New York Convention
5 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?
Yes. The Convention was ratified in 1971 and published in the Federal Official Gazette on 22 June 1971. Mexico made no declarations or reservations.
6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?
Mexico is a federal state. There is a federal judiciary branch and a local judiciary branch in each of the 32 states. First instance civil courts, both federal and local, have jurisdiction to hear arbitration-related matters. The claimant can choose whether to file the application before a federal or a local court.
The court that has jurisdiction over an application for the recognition and enforcement of an arbitral award is the first instance court of the place of the seat of the arbitration. If the seat of arbitration is not in Mexico, then the first instance court of the place of residence of the party against which the arbitral award is to be enforced or, in the absence of any such domicile, the court of the place where the assets are located (Article 1422, Commerce Code, incorporating Article 6, Model Law).
7 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?
For a court to have jurisdiction over an application for the recognition and enforcement of an arbitral award, the seat of the arbitration must be within the territorial jurisdiction of the court or the place of residence of the party against which the arbitral award is to be enforced, or its assets must be within that jurisdiction.
The applicant is not necessarily required to identify assets within the jurisdiction of the court for the purpose of recognition proceedings. However, it must present to the court the original arbitration agreement and the award.
Form of the recognition proceedings
8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?
Recognition proceedings in Mexico are adversarial in all cases. To obtain the recognition of an arbitral award, it is necessary to process a special proceeding for commercial settlements and arbitration in which both parties have the opportunity to provide evidence and present arguments.
Form of application and required documentation
9 What documentation is required to obtain the recognition of an arbitral award?
To recognise and enforce an arbitral award in Mexico, the interested party must file a request for recognition and enforcement containing (1) the original arbitration agreement or a certified copy of it, (2) the original award duly authenticated or a certified copy of it, and (3) if either the award or the agreement to arbitrate is not in Spanish, a certified translation of that document.
Translation of required documentation
10 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?
If the award or the agreement to arbitrate is not in Spanish, the party requesting recognition of the award must file a translation certified by a translation expert approved by the Mexican government (Article 1461, Commerce Code). These experts must be certified by the federal or local judiciary, and must hold an official government seal.
Other practical requirements
11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?
There are no additional requirements for the recognition and enforcement of arbitral awards. However, note that the interested party is not required to pay costs or fees to the court. Also, the burden of proof to demonstrate the existence of grounds to refuse the recognition and enforcement is not on the requesting party, but on the party opposing the enforcement, with the exception of cases that require an ex officio analysis by the court (see question 13).
Recognition of interim or partial awards
12 Do courts recognise and enforce partial or interim awards?
Mexican courts do recognise and enforce partial and interim awards. The Commerce Code makes no distinction between interim or partial and final awards for recognition purposes. Also, Mexican courts may enforce provisional measures without regard to whether interim relief was obtained through an order or a preliminary award.
Grounds for refusing recognition of an award
13 What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?
A court may deny recognition and enforcement of an award under Mexican law for the following limited reasons established in Article 1462 of the Commerce Code, which mirror those provided for in Article V in the New York Convention and Article 36 of the Model Law, namely:
- the arbitration agreement was invalid or the parties lacked the legal capacity to make the agreement;
- the appointing authority did not give a party proper notice of the appointment of the arbitrator or of the arbitration proceedings, or a party was otherwise unable to present its case;
- the award deals with a matter not provided for by or falling within the terms of the arbitration agreement;
- the constitution of the arbitral tribunal or arbitral procedure breaches the parties’ agreement or (absent any such agreement) the law of the seat of arbitration;
- the award is not binding at the seat of arbitration or was set aside by a court at the seat of arbitration;
- the subject matter of the parties’ dispute is not arbitrable under Mexican law; and
- recognition or enforcement of the award goes against public policy.
The first five grounds may only be raised and proven by the party opposing enforcement of the award. Mexican courts may raise the last two grounds ex officio.
The court has discretion on whether to enforce an award despite the confirmation of one of the grounds mentioned. However, we are unaware of a case in which a Mexican court decided to exercise this discretion.
Effect of a decision recognising an award
14 What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?
The effect of a decision recognising an award in Mexico is that the award is immediately enforceable.
No ordinary remedies against a decision recognising an arbitral award are available. However, the party against whom the award is to be enforced may file an amparo claim against the court’s judgment arguing violations to human rights as recognised in the Mexican Constitution and international treaties. A collegiate circuit court has jurisdiction to rule on the amparo claim. However, it cannot rule on the merits of the award.
The court before which the amparo procedure is brought must examine whether the challenged judicial ruling has been correctly issued, and indicate, if such is the case, that the judge incorrectly evaluated the limited grounds to refuse recognition of the award.
Decisions refusing to recognise an award
15 What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?
A decision denying the recognition of an arbitral award cannot be challenged through ordinary remedies. The only available procedural remedy is an amparo trial before a collegiate circuit court, alleging violations to human rights (most of the times parties allege violations to the principle of legality) committed by the court that decided not to recognise the award. Under no circumstances is the amparo court or the first instance court allowed to review the merits of the award.
Stay of recognition or enforcement proceedings pending annulment proceedings
16 Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?
If the outcome of annulment proceedings at the seat of the arbitration is pending, the court that receives an application for recognition or enforcement of the award may adjourn the proceeding, if it deems it appropriate under the circumstances (Article 1463, Commerce Code).
There has not been a clear trend arising from recent decisions; in fact, there have been cases in which courts have refused to adjourn and others in which they have suspended a proceeding. A factor usually considered by courts to adjourn recognition or enforcement is whether the court that will rule on the annulment proceeding assumed jurisdiction properly.
17 If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?
If a Mexican court decides to adjourn recognition or enforcement proceedings pending annulment proceedings, the claimant may request the court to order the defendant to be ordered to post security.
The court has discretion to decide whether said security shall be posted by the party resisting the enforcement, as well as the amount of the security. The security usually consists of deposit-in-court certificates or surety bonds. If the award relates to a monetary claim, courts will usually order an annual renewal security to be posted in an amount equal to the applicable interest rate on the principal amount.
Recognition or enforcement of an award set aside at the seat
18 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?
Mexican courts have discretionary powers to decide whether to enforce an award that has been set aside in a different jurisdiction (Article 1462, Section I, Subsection (e), Commerce Code). In any event, the party against whom the award is to be enforced must prove that it has been set aside or declared void by the courts at the seat of arbitration in order for the Mexican court to decide whether it will refuse to recognise or enforce the award.
The procedural remedy against a decision to enforce an award before a decision to set aside the award has been issued would be an amparo claim, arguing violations to human rights (such as a violation of the principle of legality). However, to our knowledge, there is no case on this matter.
Service in your jurisdiction
19 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?
All service of documents regarding judicial proceedings is performed by the personnel of the competent court. Notification of judicial documents to the parties involved is subject to strict procedural rules, and the court officer that summons the defendant has authority under statutory law to fully certify whether the summons was performed. Service of process is always performed by a summons with notice.
All parties in the proceedings for the enforcement and recognition of arbitral awards are required to choose in their first writ filed before the court an address where the tribunal’s communications can be received (Article 1473, Commerce Code). In all other cases, or when a personal notification cannot be performed or is not necessary, communications are notified to the parties by the other methods provided in Commerce Code (by publication of the communication in a judicial newsletter, publication in edicts, certified mail or certified telegraph).
As regards the service of extrajudicial documents, there is no specific formality that must be satisfied. However, the enforcement procedure regulated under the Commerce Code does not provide for an instance in which parties shall notify each other or communicate through extrajudicial methods.
Service out of your jurisdiction
20 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?
Articles 1071 and 1072 of the Commerce Code provide the rules applicable to the service of documents in places other than the seat of the proceedings, but within the country. This procedure mainly consists of the sending of a letter rogatory requesting the assistance of the competent judge or other relevant judicial authority in the place where the communication is to be delivered.
Articles 1073 and 1074 of the Commerce Code govern the procedure for the service of documents outside the country. This procedure provides for communication to be in the form of letter rogatory sent via the Mexican Foreign Service. It also establishes the minimum formal requirements that the letter rogatory must have in order to be valid.
Only personal notices to the parties are subject to this procedure. Regarding non-personal notices, the other methods of service of documents provided in the Commerce Code will apply (publication of the communication in a judicial newsletter, publication in edicts, certified mail or certified telegraph). These latter methods are usually used for communicating decisions that do not affect the substantive rights of the parties.
Identification of assets
21 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?
Each state in Mexico has its own real estate public registry and a corresponding public registry of commerce. The former consists of a database, which is available to the public, showing who holds the ownership of immovable property. This consists of a database, also available to the public, of all the relevant information pertaining a company, such as its assets, minutes, shareholders and managers.
Information available through judicial proceedings
22 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?
Information about private companies or entities, such as bank accounts and company shares, can be requested to those who hold them by means of a court order.
Availability of interim measures
23 Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?
The procedure regarding the application, granting and enforcement of interim measures can be found in Articles 1425 and 1478 to 1480 of the Commerce Code. Interim measures can be granted before or during the arbitration proceedings, as well as during the proceedings for enforcement of an arbitral award. Interim measures can be granted either by a court (Article 1425) or by an arbitral tribunal (Article 1479).
According to Articles 1470, Section III, 1425 and 1478 of the Commerce Code, there is no limitation in Mexican law as to which interim measures can be granted for the enforcement of an arbitral award (Article 1478).
As regards the application of interim measures in Mexico against assets owned by a foreign sovereign state, the Mexican Supreme Court of Justice has held that they have immunity, unless the assets are property used for a private purpose and not related to the exercise of sovereign powers.
The Mexican government and government entities enjoy full immunity over their assets, and they cannot be attached under Article 4 of the Federal Code of Civil Procedure and Articles 4 and 13 of the National Assets Act. However, in a recent case before the Mexican Supreme Court, the subject matter of the dispute was the constitutionality of these legal provisions. The case involved the Federal Commission of Electricity and the predicted judgment, which was published, was in favour of declaring these provisions as unconstitutional. Unfortunately, the case was settled by the Federal Commission of Electricity before the draft of the judgment came to a vote by the justices. Hence, this judgment was never entered.
Procedure for interim measures
24 What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?
When an interim measure that has already been ordered by a Mexican court is not willingly complied with by a party, another order from the competent court is still necessary to enforce it. This procedure is not ex parte and could probably imply criminal liability for contempt.
The procedure for requesting interim relief from a Mexican court in support of an arbitration procedure – or for requesting the recognition of an interim measure granted by an arbitral tribunal – begins by filing a written motion before the competent court. Afterwards, the other party against whom the interim measure is to be enforced (or recognised) is summoned to the proceedings to present its defence. Finally, after giving the parties the opportunity to produce evidence, the court renders its decision on whether the interim measure will be granted (or recognised) or not.
There has been extensive discussion among practitioners on whether it is appropriate to summon the other party to the proceedings before deciding whether the interim measure will be granted, under the argument that this could make the whole purpose of said measure pointless since the procedure usually takes a long time, and thus risking losing precisely what the interim measure seeks to protect.
There have been cases in which the courts have granted interim relief at the very beginning of the proceeding before summoning the defendant. In those cases, the interim relief is kept in force throughout the procedure pertaining to the injunction application, and in the final judgment, the court decides whether it will maintain the interim measures for the duration of the arbitration.
Interim measures against immovable property
25 What is the procedure for interim measures against immovable property within your jurisdiction?
There is no specific procedure for recognising or enforcing interim measures against immovable property. The interim measure only needs to be requested by the interested party to the competent court for it to be granted (or recognised when dealing with an interim measure granted by an arbitral tribunal) in the final judgment issued by the court in the special procedure for commercial transactions and arbitration. Once the judge issues his or her ruling, a notice of the judgment will be registered in the deed of the property located in the public registry.
Interim measures against movable property
26 What is the procedure for interim measures against movable property within your jurisdiction?
There is no specific procedure for recognising or requesting interim measures against movable property.
Interim measures against intangible property
27 What is the procedure for interim measures against intangible property within your jurisdiction?
There is no specific procedure for recognising or requesting interim measures against intangible property.
28 What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?
The procedure to attach assets is not ex parte and a court order is always required. Once the competent court has granted the interim measure (or recognised it), it will then order the attachment of the relevant property. The specific attachment procedure depends mainly on whether the property being dealt with is immovable, movable or intangible.
Attachment against immovable property
29 What is the procedure for enforcement measures against immovable property within your jurisdiction?
Once an interim measure has been granted by the competent court (or recognised if granted by an arbitral tribunal), said court will also order the corresponding public real estate registry to register the attachment of the immovable property.
Attachment against movable property
30 What is the procedure for enforcement measures against movable property within your jurisdiction?
Only an order from the court requesting the attachment is necessary for enforcement of the interim measure and its subsequent attachment. However, it is also possible, seeking legal certainty, to request the competent court to order the Secured Transactions Registries to register the attachment of the movable property.
Attachment against intangible property
31 What is the procedure for enforcement measures against intangible property within your jurisdiction?
It is necessary to obtain a court order for the enforcement of the measure and the subsequent attachment of intangible property. The specific steps to be taken after the court orders the attachment of intangible property depends on the type of asset that is going to be attached.
As regards intellectual property, trademarks and patents, it is possible to obtain an order requesting the National Copyright Institute to register the attachment over the incomes produced by intellectual property (Articles 32 and 41, Copyright Federal Law) or to order the Mexican Institute of Industrial Property to register an attachment over trademarks and patents (Article 143 of the Industrial Property Law).
As regards shares in corporations, the procedure differs depending on whether the corporation is listed on the stock market. If it is a private corporation with shares not listed on the stock market, the court will order the management body of the corporation to register the attachment in the book of registered shareholders (Articles 73 and 128, General Law of Business Corporations). In the case of shares of corporations listed on the stock market, the competent court can order the brokerage firm with whom the shareholder has a securities trading agreement to register the attachment (Article 292, Securities Market Law).
Enforcement against foreign states
32 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?
Even though there is no specific statutory regulation in Mexican law regarding immunity, the Mexican Supreme Court of Justice has established in prior rulings that foreign states have sovereign immunity and therefore Mexican courts cannot exercise jurisdiction over them. However, this immunity only applies with respect to sovereign or public acts or assets, and not with respect to their private acts or assets (such as commercial transactions), since in this case the foreign state and its agents could be held liable to the same extent as a private individual would.
In 2005, a legislative initiative was presented in the Senate entitled the Law on State Jurisdiction Immunity but was not approved. In fact, it was discarded a year later.
In 2015, Mexico ratified the United Nations Convention on Jurisdictional Immunities of States and their Properties, which recognises that the signatory states enjoy immunity with regard to itself and its property from the jurisdiction of the courts of another state, except regarding commercial transactions, contracts of employment, personal injuries and damage to property, ownership, possession and use of property, intellectual and industrial property, participation in companies or other collective bodies, ships owned or operated by a state, and arbitration agreements.
Service of documents to a foreign state
33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?
The procedure for the service of extrajudicial and judicial documents to a foreign state is established in Articles 549 to 556 of the Mexican Federal Civil Code of Procedure and Articles 1073 and 1074 of the Commerce Code.
These provisions state that to serve documents outside the country, the competent Mexican court must send a letter rogatory through the Mexican Foreign Service. Those provisions also establish several minimum formal requirements that the letter rogatory must satisfy in order to be valid.
Immunity from enforcement
34 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?
Foreign state entities enjoy sovereign immunity over assets situated on Mexican territory, except if those assets consist of property used for a private purpose and not in the exercise of sovereign powers. The term ‘protected assets’ relates to, inter alia, the premises of the diplomatic mission, their furnishings and other property thereon, and the means of transportation of the mission, which are immune from search, requisition, attachment or execution (Article 22, 1961 Vienna Convention on Diplomatic Relations).
Waiver of immunity from enforcement
35 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?
To our knowledge, no such case has been brought before Mexican courts; however, there is no reason that leads us to believe that a waiver would not be valid as long as it is made expressly in precise and clear terms (Article 7, Federal Civil Code).
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