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Litigation

Court system

What is the structure of the civil court system?

The Mexican civil court system is integrated by courts, courts of appeals and administrative units that are organised by hierarchy, location, matter and size of the claims.

There is no principle or criterion that establishes a precise number of courts or courts of appeals in each state. All states organise their courts by themselves.

Mexico City is the principal jurisdiction in the country.

Hierarchy

Mexico is a federal republic consisting of 32 states. Courts are organised at federal and state levels. At both levels, the Mexican civil court system is based on a hierarchy structure as follows:

  • the first instance in charge of a single judge; and
  • the second instance in charge of a collegium of three magistrates at the state level and only one magistrate at the federal level.

A decision issued by first instance justices may be appealed at the second instance level.

All rulings issued by federal and state second instance courts can be challenged on human rights and constitutional grounds through a remedy called ‘amparo’.

Regarding civil matters, an amparo can be solely focused on issues of legality.

The amparo recourses are normally processed before a federal collegiate court formed by three magistrates; however, in certain extra­ordinary cases, the National Supreme Court of Justice, which holds the highest degree in the Mexican court system, can resolve these kinds of remedies.

The National Supreme Court of Justice can act as a collegium of 11 justices or can be divided in two chambers formed by five justices each. Usually, the First Chamber concentrates its work on civil and criminal matters and the Second Chamber’s work is focused on tax, labour and administrative matters.

The cases addressed by both Supreme Court of Justice Chambers are normally associated with human rights and constitutional issues.

Moreover, the judgments rendered by the federal collegiate courts resolving amparo recourses can be challenged by the parties under special circumstances when a relevant point of human rights or constitutional law is analysed and ruled upon, creating a relevant criterion. The remedies challenging judgments of federal collegiate courts are processed before the National Supreme Court of Justice, and their admission is subject to high standard requirements.

Subject matter

The subject matter criteria are based on the specific matter of the dispute such as civil, commercial and family issues. In the principal jurisdictions around the country, both at state and federal levels, normally there are courts specialised in civil matters only.

Territorial jurisdiction

Both state and federal courts are divided according to different territorial criteria. On the federal level, the courts have an important presence throughout the Mexican territory, especially in the most relevant jurisdictions and the capital cities of the states.

At state level, there are several courts generally distributed in accordance to the political divisions of each state.

In Mexico City at state level, there are 73 first instance civil courts and 10 civil courts of appeal.

Size of the claim

At state level, the courts are divided and specialised according to small and large quantity issues.

The Mexican rules of procedure have special provisions for the small quantity cases.

It is important to bear in mind that under state civil procedure law, normally the parties are empowered to follow an oral summary proceeding for small quantity issues.

Regarding the above, due to an amendment made to Mexico’s Commerce Code in January 2017, eventually almost all commercial complaints will be processed through oral summary proceedings.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

Mexico’s civil procedural laws do not provide the participation of a jury in civil proceedings; all civil trials are exclusive jurisdiction of civil judges.

Furthermore, the judge has a guiding role in the civil procedure, and he or she can only take into account the arguments and evidence submitted by the parties at the trial to render his or her judgment.

The parties are in charge of preparing the evidence for its submission and to stimulate the development of the proceedings.

Nonetheless, the judge has the power to summon witnesses to testify or to enquire information for fact acknowledgement during the trial.

In certain matters considered as public interest (such as family disputes), judges have a more active role to safeguard the well-being and the best interests of certain parties (for example, when children are involved in a trial).

Moreover, in class action procedures the judges have an active role regarding the management of the proceedings, the celebration of settlement agreements, and the execution of judgments, among others.

Limitation issues

What are the time limits for bringing civil claims?

The Mexican civil and commercial codes provide different statutes of limitation depending on the action.

The most common statute of limitation is 10 years; however, there are exceptions to this general rule; for example, in certain civil liability matters the statute of limitation is two years.

The events in which suspension on time limits may occur are given by law (in general, when a court action is initiated), and it is not possible for the parties to agree on such matter.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

On a general basis, the parties are not obliged to fulfil any specific actions before bringing an action to court unless they agreed that such actions must be previously carried out.

However, a party might need to follow certain pre-action procedures before filing a civil action under certain scenarios. For example, in some debt cases, before filing a lawsuit, payment should be required to the debtor through a notary public.

Also, the parties can start summary proceedings at a court to gather evidence before bringing an action through orders to exhibit documents, deposition of witnesses or possible defendant parties, investigations regarding the legal situation of real estates, among others.

If the person towards whom a summary proceeding is directed fails to comply with the requirement performed by the judge, an implicit confession may emerge in favour of the petitioner, which may be used in court against the defendant.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Civil proceedings are commenced by filing a statement of claim before the competent judge, joined by all documents supporting the lawsuit.

Then the judge should render a ruling on the commencement of the proceedings within approximately five days of the receipt of the statement or might request the defendant to clarify the lawsuit before admitting it.

The service of process of the defendant may be performed by a court officer or by means of the publications of edicts in newspapers and official gazettes if the domicile is unknown and the judge has been unable to find out the domicile of the defendant after performing a thorough investigation.

Moreover, the court officer in charge of the service of process of the defendant must observe strict requirements established by the Mexican civil procedure law, such as fully identifying the individual who addresses the service of process and making sure that the address corresponds to the defendant’s domicile.

If the service of process does not meet the mentioned requirements, the defendant is entitled to file a motion to try to nullify his or her summons.

In class action proceedings, the judge must qualify the petitioner’s legitimate standing in the preliminary stage of the proceedings of the trial before admitting the lawsuit.

Timetable

What is the typical procedure and timetable for a civil claim?

In general, Mexican civil procedures consist of five phases:

  • service of process;
  • conciliatory hearing;
  • offering and submission of evidence;
  • closing arguments; and
  • ruling of the judge.

Once the service of process has been performed, the defendant usually has a 15-working-day period to answer the lawsuit.

In some cases, a conciliatory hearing can be held after the defendant has been given the opportunity to file a writ responding the lawsuit.

At the end of the hearing, in case that the parties do not reach any settlement regarding the claims, the judge will ask the parties to offer evidence usually within a 10-working-day period and will schedule a hearing for the submission of such proofs.

Submission of evidence may take place in several hearings if the particular circumstances of the case require so.

Once the submission of evidence has been accomplished, the court will receive the closing arguments of the parties, generally within a three-working-day period, and thereafter, the judge will render his or her judgment.

In contrast, regarding oral commercial proceedings, the timetable for a trial is shorter, because, for example, several phases of the trial take place at a single moment.

Case management

Can the parties control the procedure and the timetable?

The general rule for civil procedures is to follow the timetable established by law; therefore, normally the parties may not agree or control in any way the rules of the procedure or timetable.

However, due to the fact that the parties are in charge of preparing the evidence for submission and to motivate the development of the proceedings, in some way the parties might have an indirect control of the procedure.

On the other hand, especially regarding commercial matters, the parties are empowered to enter agreements to fix certain rules of procedure and the timetable of the trial. Also, in some commercial litigations, the parties may agree to stop the proceedings for a certain period of time, and in these cases, any party may request the judge to restart the procedure at any time.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

There is no general duty to preserve evidence pending trial; however, certain particular subjects, such as merchants, are obliged to preserve relevant documents for a period of five to 10 years, depending on the kind of documents.

However, judges have the ability to request the parties, or any other person, to exhibit the documents requested by a litigator. In this particular case, if it is a party fails to attend the requirement performed by the judge, an implicit confession may emerge in favour of the petitioner.

In regard to class actions, the judges are empowered to request the defendant to allow a general discovery of evidence.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Mexico recognises that certain documents are privileged, and as consequence, must be kept undisclosed from the public. Nonetheless, in some cases, the judge is empowered to order the exhibition of such documentation.

In general, all client-lawyer communication is protected from disclosure by professional secrecy although exceptions may apply.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

No. There is no general duty to exchange written evidence from witnesses and experts between parties prior to trial.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Under Mexican civil procedure rules, all evidence should be offered during a specific stage of the trial. In general, the plaintiff bears the burden of proof.

Nonetheless, in order for documents to be admitted as evidence in a trial, they should be joined to the statement of claim or the answer of the claim. The parties may exhibit documents at a later stage if such documentation was not in their power, or if they did not know about their existence, and as long as the party meets certain particular requirements.

Depositions on behalf of the plaintiff or the defendant and witness evidence are submitted orally.

Finally, expert opinions must be provided in writing. However, in some cases, the judge is empowered to summon the experts to answer questions of the parties orally.

Interim remedies

What interim remedies are available?

Under special circumstances and requirements, in some cases the parties can request interim remedies before and after the trial has begun, normally through summary proceedings.

The most common available interim remedies under Mexican civil procedure law are the seizure of assets and certain restraining orders.

However, some case law empowers judges to be able to adopt other kind of remedies deemed more suitable according to the circumstances of each case, if the petitioner is able to prove that such a special interim remedy is essential to preserve his or her interests.

There are certain summary trials that allow the plaintiff to obtain the attachment of assets without having to fulfil special requirements, such as when the lawsuit is based on a promissory note, a check, or other documents that presume the existence of a debt.

Remedies

What substantive remedies are available?

Generally speaking, damages and losses are compensatory under Mexican civil law; however, recent case law grants judges more power to determine indemnifications taking into consideration human rights criteria.

Moreover, there are certain court precedents providing that punitive damages may be imposed in civil trials regarding pain and suffering situations.

On the other hand, the judge may issue injunctions or annul contracts, depending on the petition filed by the plaintiff.

Interests run according to the legal rate unless the parties have agreed on a specific rate, and interests are usually generated from the day the defendant was legally bound to pay and failed to do so.

Enforcement

What means of enforcement are available?

Regarding the orders given by the judge during the trial, they are immediately enforceable. If voluntary compliance does not occur, the judge is empowered to apply enforceable measures, such as fines and arrests.

The court’s judgment is only enforceable until it has acquired the authority of a final decision and res judicata. Depending on the needs of the case, a final judgment may be enforced, for example, through the seizure of assets, auctions to sell assets property of the losing party, or by means of an eviction, among others.

Public access

Are court hearings held in public? Are court documents available to the public?

Documents exhibited in a trial and pieces of the file are not public unless permission of the parties is acquired.

However, rulings rendered by the judges are public, but relevant information regarding privacy of the parties is generally removed.

Court hearings are public unless particular circumstances of the case require that they are private.

Costs

Does the court have power to order costs?

According to Mexican constitutional rules, the civil procedure is governed by the principle of legal aid, which means that the court is unable to recover expenses generated by the trial from the parties.

However, the judge has the power to order the payment of legal costs, which are generally imposed on the losing party. The judge can also order payment of legal costs when a party has acted in bad faith, for example, by delaying the procedure.

If payment of legal costs is imposed, they are assessed by a summary proceeding. If the amount of the claim is determined, in some jurisdictions the amount to be paid for costs depends on a specific percentage of the amount claimed (for example, in Mexico City this varies from 6 to 8 per cent). If the amount of the claim is not determined, generally costs are calculated for each writ, pleading, hearing, etc.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

Mexican law does not regulate these kinds of agreements, but neither does it prohibit them. Nonetheless, rules of professional ethics in Mexico recommend lawyers to avoid ‘no win, no fee’ agreements.

Normally there are no limitations on third-party funding or risk-sharing agreements.

In any case, these kinds of agreements must be analysed case by case in order to determine if they are valid under Mexican law.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

Insurance is available to cover all or part of a party’s legal costs, and the most common cases for this are civil liability lawsuits and the application of a title insurance regarding real estate litigation.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

Class actions may be brought to court when a group of individuals suffer damages from a common cause and in cases where common rights are involved. Class actions are basically allowed regarding consumers’ rights and environmental issues and are regulated by the Federal Civil Rules of Procedure and the Federal Law of Environmental Liability.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

First instance judgments may be appealed unless the size of the lawsuit is small (the amount is adjusted annually in accordance with inflation); in such cases the civil rules of procedure do not allow an appeal.

An appeal must be presented generally within nine or 12 working days.

The judgment from the second instance may be appealed through a constitutional remedy (amparo) filed before a federal collegiate court.

As stated, all rulings issued by federal and state second instance courts can be challenged on human rights and constitutional grounds through an amparo, which regarding civil matters can be solely focused on issues of legality.

If an appeal remedy is not available for the parties because of the size of the claim, the parties can still file an amparo recourse.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

Whether reciprocal agreements apply or not, judgments from foreign courts may be enforceable in Mexico through a summary proceeding in which the court basically will review whether the trial in which the judgment was issued abided the rules of due process, such as if the service of process of the defendant was properly conducted, the judgment acquired the authority of a final decision and res judicata, etc.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

Yes, these procedures are available in Mexico through certain particular motions; therefore, Mexican judges can help a party obtain oral or documentary evidence for use in foreign jurisdictions.

In addition, in order to obtain oral or documentary evidence for use in civil proceedings in other jurisdictions, the Hague Convention on the Taking Evidence Abroad in Civil or Commercial Matters, and the American Convention on the Taking Evidence Abroad, may also apply.

Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

Yes, the Mexican arbitration rules, which are included in the Commer­cial Code, are based on the UNCITRAL Model Law.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement must be incorporated in a contract or a separate document. The arbitration clause must be in writing and shall state, at least, the following:

  • applicable law;
  • the rules of arbitration;
  • the number of arbitrators;
  • the place in which arbitration is going to take place; and
  • the language in which the arbitration procedure is going to be carried out.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

The parties may agree to appoint the arbitrators themselves or by delegating the appointment to a third party. If the parties do not state the number of arbitrators, there will be only one arbitrator.

If the parties do not state how the arbitrators will be appointed, they may request a judge to appoint them.

Also, the parties have the right to challenge an arbitrator appointment on the same grounds as any judge designation in accordance with the Mexican civil rules of procedure.

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

At first, it will depend on what the parties agreed on the arbitration clause that gives place to the arbitration.

The Commercial Code provides that parties can designate the arbitrators no matter their nationality.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

In general, Mexican law does not impose any substantive requirements for the arbitral procedure. Parties often agree that the arbitral procedure is governed by any of the rules of international or domestic chambers of arbitration.

However, Mexican law states that in every arbitration process, the parties must be treated with equality and that due process rules must be abided by.

Court intervention

On what grounds can the court intervene during an arbitration?

On a general basis, Mexican courts can intervene in arbitral proceedings in the following circumstances:

  • to designate arbitrators;
  • to decide a motion challenging the appointment of an arbitrator;
  • to assist arbitrators to obtain evidence; and
  • to grant interim relief to the parties.

Interim relief

Do arbitrators have powers to grant interim relief?

Under the Mexican rules of procedure, if an interim relief is to be executed in Mexican territory in connection with an arbitration, such measures have to be granted or validated by a Mexican judge.

Award

When and in what form must the award be delivered?

Mexican procedural rules do not state a time limit for the arbitrators to issue their award. For that matter, it is common for the parties to agree that the award and the time limit, in which it is going to be delivered, is governed by any of the rules of the international or domestic chambers of arbitration.

In general terms, arbitrators are obliged to deliver their award according to the arbitration agreement and the usage of the trade applicable to the transaction.

Appeal

On what grounds can an award be appealed to the court?

Generally speaking, there is no appeal remedy against arbitral awards. However, the parties may request a judge to review the legality of the award if one of the following circumstances occurs:

  • non-existence or nullity of the arbitral agreement;
  • the arbitral tribunal was not duly integrated; or
  • one of the parties was not properly notified of the arbitral procedure.

Also, under Mexican law there are exceptions that prohibit the parties from submitting to arbitration certain disputes, such as family matters. In a case like this, the award could be nullified on the premise that it would be contrary to public interest.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

All awards must be enforced through a summary trial in which the court will basically analyse whether the arbitral procedure in which the award was issued abided by the rules of due process.

Also, the judge may review in this summary trial the validity of the arbitration agreement and any other arguments that the defendant party raises.

Costs

Can a successful party recover its costs?

Generally speaking, the possibility of a party to recover the costs generated by an arbitration process is governed by the rules of arbitration agreed on by the parties.

Nonetheless, the Mexican Commercial Code states that in absence of such an agreement the costs will be imposed to the losing party.

In any case, the arbitrators are empowered to impose the payment of the costs based on the facts and circumstances of each case.

Alternative dispute resolution

Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

The most common ADR processes used in Mexico are mediation and conciliation.

In some civil procedures, there is a stage of the trial in which the court invites the parties to conciliate.

Mediation has gained a good reputation and popularity, to the point where in Mexico City there is a specialised Mediation Centre sponsored by the Supreme Court of Justice of Mexico City.

Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

There is no general requirement for the parties to consider alternative dispute resolution before or during trial.

However, several administrative rules state that the judges must invite the parties to participate in these kinds of proceedings.

Miscellaneous

Interesting features

Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

Due to a couple of constitutional amendments made in June 2011, all Mexican authorities are obliged to defend and preserve human rights.

The mentioned amendment led to a new case law doctrine that authorises all judges to analyse human right issues, which with regard to civil procedures means that judges can review the validity of the applicable laws in certain cases and even reject the observance of a law if a judge considers that such a law is in violation of human rights.

Moreover, the judge can perform interpretations of civil laws and civil rules of procedure taking into account the criteria based on human rights.

Update and trends

Update and trends

Are there any proposals for dispute resolution reform? When will any reforms take effect? (Please also mention any ground-breaking recent cases, etc.)

Through a constitutional reform published in September 2017, the Mexican Congress was empowered to issue legislation over civil and familial procedures. The objective of this reform is to standardise all rules of procedure regarding civil and family matters, rather than having codes for each local jurisdiction. However, the Mexican Congress has not issued this legislation yet, and there is no clarity as to when this will occur.

In addition, through a constitutional reform published in September 2017, all courts now have the duty to privilege the solution of the main dispute over procedural or technical formalities, as long as the equality of the parties, due process and other principles are not affected.

Finally, the Mexican Congress is also currently discussing a bill concerning alternative dispute resolution processes, which was presented in December 2017. The main objective of this bill is to define the minimum procedural rules of ADR across the country, as well as to set basic criteria regarding the organisation of the institutions in charge of supervising ADR processes. There is no defined time-frame in which this bill may enter into force, if ever, but it will undoubtedly imply reforms on several local ADR laws, as well as the Commercial Code, in order to standardise ADR procedures nationwide.