Following a constitutional amendment in 2011, the new Amparo Law has been approved by both chambers of Congress. Although some provisions of the new regulation are still pending discussion, the largest portion of the law is ready for enactment by the executive power. However, the law will be sent to the executive power as a whole only after it wins final approval from Congress.

The new law modifies several aspects of amparo proceedings and includes several other provisions that were not included in the previous law, but were already recognised in case law. Although to a great extent the new law includes positive changes to amparo proceedings and aims to modernise this constitutional challenge procedure, some of the new provisions may be unfavourable to companies and financial institutions.

One of the main features of the current regime for amparo proceedings is that the aggrieved party may submit a motion to the judge requesting a stay of execution of the contested government action or court ruling in order to avoid suffering irreparable damage while a final decision on the constitutionality of the government action is reached. In this vein, one of the most criticised features of the new law is that in matters regarding the use and exploitation of national property that is fully owned by the government, companies may not request a stay of the government action or court ruling being contested in amparo proceedings. Companies must instead wait until the merits of the amparo proceedings have been decided and a final decision issued on the constitutionality of the government action or court ruling. In light of this modification, companies with a concession of any government property (eg, energy, land, water or mines) will be exposed to irreparable damage, which could make the subsequent amparo ruling no longer necessary.

Further, financial institutions will be prohibited from submitting a motion requesting a stay in the enforcement of a government action or court ruling involving either the intervention into or revocation of their operations or their liquidation or bankruptcy. The law states that this prohibition is in the interest of protecting individuals and the stability of the payment system.

The new law also provides that requests for a stay of a government action will be dismissed in cases dealing with companies that own raffling or gambling establishments.

Overall, the changes included in the new Amparo Law intend to modernise amparo proceedings to meet the current needs of the population. However, the changes discussed above deserve further consideration, since they may have a severe impact on the operations of national and international companies alike.

For further information on this topic please contact Luis Enrique Graham or Angelica Huacuja at Chadbourne & Parke by telephone (+52 55 3000 0600), fax (+52 55 3000 0698) or email (lgraham@chadbourne.com or ahuacuja@chadbourne.com).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.