I INTRODUCTION TO The DISPUTE RESOLUTION FRAMEWORK

Mexico is a federal country, with both federal and local courts.

Federal courts are competent to resolve any issue of a federal nature that is brought before them and also when the government acting as an authority is involved. Commercial matters are also of a federal nature, but the law determines that commercial litigation can also be heard by local courts.

Federal courts are divided into 32 circuits. The hierarchy of federal courts (starting from the bottom) is as follows: district courts, circuit unitary courts, collegiate courts and the Supreme Court of Justice of the Nation.

District courts are divided according to the nature of the cases they resolve, namely, civil, administrative, labour and criminal.

Local courts are competent to resolve any issue that is brought before them that is not federal.

Local courts are divided into 31 different states and the local courts of Mexico City. The hierarchy of local courts (starting from the bottom) is as follows: justice of the peace courts, courts of first instance and courts of appeal. Local courts are divided according to the nature of the cases they resolve, namely civil, family, criminal and labour.

Besides the general framework mentioned above, the ultimate instance in a local case will be decided by a federal court (collegiate court or the Supreme Court of Justice) by means of a direct amparo.

With respect to alternative dispute resolution (ADR) proceedings, local courts have created a specific mediation body, the Centre for Alternative Justice. Besides this Centre, the parties can decide to resolve their disputes by any other means, other than through judicial authorities (e.g., arbitration).

II THE YEAR IN REVIEW

During 2016, the Supreme Court of Mexico, following the principles adopted in the American Convention on Human Rights, and specifically in reference to exorbitant interest rates, established that when the parties to the Convention made reference to prohibition of exorbitant interest rates arising out of a loan, they were referring not only to ordinary interests, but also to past due interests. For example, if, as the result of a loan, an individual obtains a sum of money and agrees on an ordinary interest rate as well as past due interest, none of the interest may be exorbitant. Before this important resolution, the Supreme Court established a series of conditions that should be studied before determining if an interest is exorbitant or not, establishing in 2016 that, in order to determine if the interest rate is exorbitant or not, not all of the conditions had to be met. The conditions included the following:

  • a relationship between the parties;
  • b status of the individuals that appear in the document;
  • c activities of the parties;
  • d purpose of the loan;
  • e amount of the loan;
  • f time of loan;
  • g existence (or not) of guarantees to pay the debt;
  • h interest rates established by banking institutions for similar activities;
  • i variation of inflation index during the debt;
  • j market conditions; and
  • k other elements that might convince the judge.

III COURT PROCEDURE

i Overview of court procedure

In Mexico, court procedure basically follows these steps:

  • a lawsuit;
  • b answer to the lawsuit;
  • c evidence period;
  • d allegations; and
  • e final judgment.

The rules governing court procedure vary from state to state and according to the nature of the conflict (civil or criminal).

ii Procedures and time frames

The procedures and time frames of the courts depend on two basic issues: the complexity of the case and the jurisdiction where the litigation takes place.

If the litigation takes place in a major city, the procedure can take between one and three years to be resolved. In some cases it may take more or less time, but such a case would be the exception.

Commercial proceedings

Commercial proceedings take place when the issue to be resolved has a commercial nature or when one of the parties in the relationship is a merchant.

Commercial proceedings are regulated in the Commerce Code and they can be one of four different types: ordinary proceedings, executive proceedings, special proceedings and oral proceedings. Each type has its own set of rules.

Ordinary proceedings

Commercial proceedings begin with a lawsuit. After the lawsuit is accepted by the court, the court orders the serving of summons to the defendant and grants the defendant 15 days to answer the lawsuit, oppose exceptions and defences and file a counterclaim (if any). After the lawsuit is answered, if the defendant files a counterclaim, the court gives the defendant in the counterclaim nine days to answer the counterclaim. In any case, claim or counterclaim, the court grants the plaintiff three days to determine what it deems appropriate with respect to the exceptions and defences lodged by the other party, as well as for naming the witnesses that have any knowledge regarding the answer and for mentioning the documents that relate to the answer. Afterwards the court, ex officio or by request of the parties, will open the evidence period, of 40 days in most cases; the first 10 days to offer the evidence and the next 30 to take the evidence offered. The court can open an evidence period of a shorter duration. If the evidence has to be taken outside the jurisdiction where the litigation is taking place, the court may grant an extension of up to 60 days to take such evidence if it has to be gathered in the Republic of Mexico, and up to 90 days if it has to be gathered abroad.

Such an extension has to be requested during the first 10 days of the evidence period. In such a request, the complete names of the parties or witnesses to be deposed have to be inserted, and the questionnaire under which they will be deposed must be attached. In the event that documents have to be reviewed or copied, it should be established where the private or public archives are that hold the documents.

If the court grants such an extension, it will require the party that requests the extension to deposit a certain amount of money, so that if the evidence is not taken that amount will be given to the other party. The amount to be deposited cannot be, under any circumstance, an amount less than the value of 60 days of the minimum daily wage in Mexico City. The judge, when determining the amount to be deposited, will take into consideration the amount of the litigation and other circumstances that he or she deems appropriate. The amounts requested have to be deposited within three days. If the party requesting the extension does not deposit this amount within those three days, the judge will not admit the evidence offered.

If the judge admits the evidence to be taken outside his or her jurisdiction, he or she has to prepare letters rogatory for the foreign judge, and these will be given to the party that requested the extension, thus the party takes responsibility for obtaining the evidence, either via the central authority of Mexico or directly through the appropriate authorities where the evidence is to be gathered.

After the evidence period is over, the court grants the parties three days to file their allegations, and after those three days have elapsed the court gives notice to the parties that it is ready to enter judgment, which shall be rendered within the following 15 days.

Once the judgment is entered, any of the parties in the litigation, or even a third party, can appeal against the final judgment. The party against whom the judgment is entered can appeal if it believes that such a judgment was entered against the applicable laws. The party that won the litigation can also appeal against the final judgment if it did not obtain the restitution of products, indemnity for damage and loss of profits or costs. The party that won the litigation can also adhere to the appeal made by the losing party, at most within the three days following notification of the appeal filed by the losing party (when adhering to the appeal, the party submits more arguments to sustain or reinforce the opinions of the judge). A third party with a legitimate interest can also appeal if the resolution harms his or her rights.

An appeal can only take place in those cases where the principal amount of the litigation is more than 500,000 pesos without taking into consideration interest or any other amount claimed.

Appeals have to be filed within a period of nine days after the notification of the final judgment is considered to be in full force and effect. The period for appealing interim judgments or any other court order is six days. In both cases the parties have to state the legal violations they consider the judgment to have. In the event that the appeal is such that it will be resolved along with the appeal against the final judgment, the time to file such an appeal is three days, and the parties are not required to make a statement of the order’s legal violations until required to do so in respect of the final judgment.

Once the parties have appealed the final resolution, the court will grant the other party six days to answer the writ of appeal filed by the appealing party.

After the six-day period has elapsed, with or without the answer of the party that did not appeal, the court will send the judicial docket to the court of appeal, which studies it and issues a final judgment. When studying appeals, the court of appeal first has to study the procedural violations claimed, and if it finds the existence of such violations and considers that they are fundamental to the merits of the case, it will issue a final judgment ordering that the final judgment issued by the lower court be invalidated so that the proceeding can be restored and a new judgment issued.

With respect to appeals that have to be resolved immediately because they involve execution over assets and could, therefore, cause irreparable (or severe) harm to the appealing party, the court can accept such an appeal. Such an acceptance suspends the proceedings in the lower court if the appealing party requests it and explains why such a request is made. If the request is accepted, the court would require the appealing party to post a bond or guarantee within the following six days for the suspension to take effect. The amount of the bond or guarantee will be determined by the judge, taking into consideration the importance of the litigation, but will never be less than 6,000 pesos and will be according to the good judgement of the court. If the party that requests the suspension does not post the guarantee, then the appeal will not suspend the proceedings carried out before the lower court.

Executive proceedings

Executive proceedings are those that are based on an executive title (examples of executive titles are: promissory notes; judicial confession of a debtor; invoices duly signed and judicially acknowledged by the debtor). They begin with the lawsuit, and the executive title has to be attached to such a lawsuit. In these kinds of proceedings the plaintiff has to offer his or her evidence in the lawsuit. After the lawsuit is accepted by the court, the court will issue an order requesting the debtor to pay, and the date of the summons will be served to the debtor or defendant. The court clerk will first request the debtor for payment of monies. If the debtor does not pay, the court clerk will proceed to seize assets from the debtor (the debtor will be the first to name the assets to be seized and, in the event that he or she does not do so, such a right will be transferred to the plaintiff or creditor), and once assets have been seized the debtor will be served with summons and granted eight days to answer the lawsuit, oppose exceptions and defences. In executive actions only very few exceptions are admitted by the court. In the same answer to the lawsuit the defendant has to offer evidence. After the defendant answers the lawsuit, the court grants the plaintiff three days to determine what it deems appropriate with respect to the exceptions and defences lodged by the other party, as well as for offering evidence related to the answer to the lawsuit. Afterwards, the court will open an evidence period of 15 days, during which all of the evidence can be taken; the court can accept evidence after those 15 days when it deems this appropriate.

After the evidence period is over, the court grants the parties two days to file their allegations, and after those two days have elapsed, the court gives notice to the parties that it is ready to enter judgment, which shall be rendered within the next eight days.

With respect to appeals, the same rules mentioned for the ordinary proceedings apply to executive proceedings.

Once the judgment is entered and the merits of the case have been decided in a final instance, if the plaintiff proved its action the judge will declare that the assets seized should be sold at a public auction. Once such a declaration is made by the judge, the parties will appoint experts in appraisal, and in cases where the value of the assets made by the experts differ by more than 20 per cent, the judge will appoint a third expert. Once the value of the assets is obtained, the court will announce the legal sale of the goods, via publication in a newspaper two times in three days if the assets to be sold are not real estate; in cases of real estate, the publication will be made during a period of nine days. Five days after the publications are made, the goods will be sold at a public auction.

Special proceedings

The special proceedings contemplated by the Commerce Code are:

  • a the extrajudicial execution of guarantees granted through a pledge without transmission of the asset and guarantee trust; and
  • b the judicial execution of guarantees granted through a pledge without transmission of the asset and guarantee trust.
Oral proceedings

This type of proceedings will only be available when the amount of the claim is less than 500,000 pesos (just the principal amount, without taking interest into consideration).

If a special proceeding has to take place, an oral proceeding will not be applicable, notwithstanding the amount of money of the claim.

The claim, answer to the claim and counterclaim have to be filed in writing.

There is a preliminary hearing for the purposes of ‘cleaning the proceeding’ (i.e., where the judge will review whether the parties have an interest in the litigation, and any of the defences or exceptions lodged by the parties that relate to the proceeding); conciliation or mediation of the parties; agreement of the non-controversial issues; admission of evidence; and notifying the parties for the main hearing.

In the main hearing the evidence will be taken. Any ancillary issues (that do not have a specific way of being carried out) should be made orally and the other party has to answer in such a hearing. If possible, the judge should resolve such ancillary issues in the same hearing. After the evidence has been taken, allegations will be made and the judge will call the parties to a new hearing within the next 10 days, where it will issue the final judgment.

The basic principles of these types of proceedings are that most of the proceedings will be carried out orally; hearings should not be suspended because of a lack of preparation of evidence.

Civil proceedings

Civil proceedings are regulated both in the Federal Code of Civil Procedure and in the code of civil procedure of each state, and they can be of different types: ordinary proceedings, executive proceedings, special proceedings, enforcement proceedings and oral proceedings. Each type has a different set of rules. A brief overview of the proceedings regulated in the Code of Civil Procedure of Mexico City is provided below.

Ordinary proceedings

Civil proceedings begin with a lawsuit. After the lawsuit is accepted by the court, the court orders the serving of summons to the defendant and grants the defendant 15 days to answer the lawsuit, oppose exceptions and defences and file a counterclaim (if any). After the lawsuit is answered, if the defendant files a counterclaim, the court gives the defendant in the counterclaim nine days to answer the counterclaim. In any case, claim or counterclaim, the court grants the plaintiff three days to determine what it deems appropriate with respect to the exceptions and defences opposed by the other party. Afterwards the court will call the parties to a preliminary hearing. In such a hearing the judge will review the standing of the parties in court and will try to get the parties to solve their differences through conciliation. In the same hearing the judge will review the procedural exceptions lodged by the parties. If the parties do not enter into a settlement, the court will open the evidence period on the day of the hearing or at most the following day, ex officio or by request of the parties, for 10 days for the parties to offer their evidence. After the evidence is offered by the parties, the judge will determine which evidence he or she accepts or rejects and will call the parties for a hearing, which will take place in the next 30 days, so that the evidence may be taken by the court. If all of the evidence cannot be taken by the court at that hearing, then the court will call the parties for another hearing, which will take place within the next 20 days, to finalise taking the evidence offered by the parties. If the evidence has to be taken outside the jurisdiction where the litigation is taking place, the court may grant an extension of up to 60 days to take such evidence if it has to be gathered in the Republic of Mexico, and up to 90 days if it has to be gathered abroad.

Such an extension has to be requested during the term when evidence has to be offered. In such requests, the complete names of the parties or witnesses to be deposed have to be inserted, and the questionnaire under which they will be deposed must be attached. In the event that documents have to be reviewed or copied, it should be established where the private or public archives are that hold the documents.

If the court grants such an extension, it will require the party that requests it to deposit a certain amount of money, so that if the evidence is not taken, the amount will be given to the other party. If the party requesting the extension does not deposit this amount, the judge will not mention anything with respect to the admission of such evidence.

If the judge admits the evidence to be taken outside his or her jurisdiction, he or she has to prepare letters rogatory for the foreign judge, and these will be given to the party that requested the extension, thus the party takes responsibility for obtaining the evidence, either via the central authority of Mexico or directly through the appropriate authorities where the evidence is to be gathered.

At the hearing where the evidence is taken by the court, after all of the evidence is taken the court will finish the evidence period and open the allegations period, whereby the parties can render their oral allegations (the parties can file written allegations before the evidence hearing). After the allegations period is over, the judge has to issue the final judgment in the same hearing. In practice, final judgments are not usually rendered in such a hearing.

Once the judgment is entered, any of the parties in the litigation, or even a third party, can appeal against such a final judgment. The party against whom the judgment is entered can appeal if it believes that such a judgment was entered against the applicable laws. The party that won the litigation can also appeal against the final judgment if it did not obtain the restitution of products, indemnity for damage and lost profits or costs. The party that won the litigation can also object to the appeal made by the losing party, at most within the three days following notification of the appeal filed by the losing party (when adhering to the appeal, the party that adheres to the appeal submits more arguments to sustain or reinforce the opinions of the judge). A third party with a legitimate interest can also appeal if the resolution harms his or her rights.

An appeal can only take place in those cases where the principal amount of the litigation is more than 212,460 pesos without taking into consideration interest or any other amount claimed.

Appeals have to be filed within 12 days after the notification of the final judgment is considered to be in full force and effect. The period for appealing interim judgments or any other court order is eight days. In both cases the parties have to state the legal violations they consider the judgment has. In the event that the appeal is such that it will be resolved along with the appeal against the final judgment, the time to file such an appeal is three days, and the parties are not required to make a statement of the order’s legal violations until required to do so in respect of the final judgment (within the 12 days granted to appeal against the final judgment).

Once the parties have appealed the final resolution, the court will grant the other party six days to answer the writ of appeal filed by the appealing party.

After the six-day period has elapsed, with or without the answer of the party that did not appeal, the court will send the judicial docket to the court of appeal, which studies it and issues a final judgment. When studying appeals, the court of appeal first has to study the procedural violations claimed in relation to legally offered evidence not admitted or taken by the court. If the court of appeal finds the existence of such violations, it will declare the appeal valid and will order the lower court to admit the evidence or take it and issue the appropriate order. In the event that the procedural violation is not related to evidence, if the violation can be repaired and is of such importance that it will impact the merits of the case, then the court of appeal will repair the violation claimed. Once the evidence is admitted and taken or the violation is repaired by the lower courts, the court of appeal will issue the final judgment with respect to the appeal filed against the final judgment. This judgment is appealable via an amparo proceeding. The time frame within which to issue a final judgment is 20 days, which can be extended to 30 days in the event that there are more than six interim appeals to be resolved together with the final judgment.

With respect to appeals that have to be resolved immediately because they can be executed and could, therefore, cause irreparable harm (or harm that is very difficult to repair) to the appealing party, the court can accept such an appeal, suspending the proceedings in the lower court if the appealing party so requests and explains the reasons for such a request. The court would require the appealing party to post a bond or guarantee within the following six days for the suspension to take place. The amount of the bond or guarantee will be determined by the judge taking into consideration the importance of the litigation, but will never be an amount less than 7,500 pesos. If the party that requests the suspension does not post the guarantee, then the appeal will not suspend the proceedings carried out before the lower court.

After the court of appeal issues its final judgment, any of the parties can resort to the amparo proceedings, which are constitutional proceedings, whereby violation of constitutional rights are claimed.

Executive proceedings

Executive proceedings are those that are based on an executive title (examples of executive titles are: the first copy of a public deed issued by the judge or notary public; judicial confession of a debt made before the competent judge by the debtor or its representative; and agreements made in a litigation before the judge, either made by the parties, third parties acting as depositaries or guarantors). The rules of executive proceedings are the same as for ordinary proceedings. Executive proceedings have two different sections:

  • a the first section, which contains the lawsuit, answer to the lawsuit, preliminary and final judgment; and
  • b the second section, which contains the order for the execution and everything related to the execution.
Special proceedings

The Code of Civil Procedure of Mexico City regulates the following special proceedings: loss of parental authority of minors that have been sheltered by public or private institutions of social assistance; mortgage proceedings; torts arising out of the use of motor vehicles; and the reissuance of certificates based on reassignation for sex/gender reconciliation.

Enforcement proceedings

These kinds of proceedings can only take place when the issue to be dealt with relates to the execution of a judgment, or relates to an agreement made in court or that arises from the agreement made by the parties before the judge or from an express agreement by the parties stating that rescission of the agreement does not require judicial intervention.

The nullity of concluded proceedings

The proceedings of nullity of concluded proceedings can only take place when a final judgment or court decision has been issued that cannot be revoked or reversed by any ordinary means and that falls within either of the following categories:

  • a the judgment or order was based on evidence that has been acknowledged or declared false after the judgment or order was issued, and that the party that lost ignored; and
  • b there is evidence of complicity or other fraudulent manoeuvres of the litigating parties against the plaintiff.
Oral proceedings

Such proceedings will only be available when the amount of the claim is less than 500,000 pesos (just the principal amount, without taking into consideration interest and other accessories). This amount is modified annually.

If special proceedings have to take place, the oral proceedings will not be applicable, notwithstanding the value of the claim.

The claim, answer to the claim and counterclaim have to be filed in writing.

A preliminary hearing is carried out for the purposes of cleaning the proceeding; conciliation or mediation of the parties; agreement of the non-controversial issues; admission of evidence; and notifying the parties for the main hearing.

Evidence will be taken in the main hearing, and any ancillary issues (that do not have a specific way of being carried out) should be made orally; the other party has to answer in this hearing. If possible, the judge should resolve such ancillary issues in the same hearing. After the evidence has been taken, allegations will take place and the judge will call the parties to a new hearing within the following 10 days, at which it will issue the final judgment.

The basic principles of these types of proceedings are that most of the proceedings will be carried out orally; hearings should not be suspended because of a lack of preparation of evidence.

A mparo

Amparo is the constitutional review of the decisions issued by the trial court or the court of appeal.

Amparo is considered the last instance in litigation, and is usually decided by the collegiate courts. Collegiate courts are comprised of three judges, and their scope of review is the violation of constitutional rights or guarantees. Sometimes amparo proceedings are resolved by the Supreme Court of Justice in cases when (1) the Supreme Court decides to take up the case, (2) the collegiate court determines that the Supreme Court of Justice should be the one to decide the case or (3) the Attorney General requests the Supreme Court of Justice to take up a specific case. In cases (2) and (3) the Supreme Court of Justice can deny the request.

Amparo proceedings are resolved by federal courts (district judges or collegiate courts or the Supreme Court of Justice).

To avoid execution of judgments or orders issued by lower courts, the parties requesting the amparo can request the suspension of the order that is contested through the amparo proceedings, so that the subject matter of the amparo is not changed, modified or terminated.

The purpose of the amparo is to restore the party requesting the amparo to the same status that he or she had before the constitutional violation took place. This restoration of the status quo is achieved by issuing a new judgment or order complying with the applicable laws. Under the new A mparo Law, the amparo court is very specific when ordering the authority to issue a new judgment or order. The judgment issued by the district court is not a final judgment since it can be modified through the review process, which is decided by the collegiate court or the Supreme Court of Justice.

Urgent or interim applications

The only urgent or interim applications that can be granted according to the Commerce Code are the order to a person to stay where litigation is taking place, and confinement of assets.

Order to a person to stay where litigation is taking place

The order to a person to stay where litigation is taking place will only be granted when there is reasonable fear that the person against whom a lawsuit will be initiated, or has been initiated, will leave the jurisdiction of the judge or will hide.

When a request is made that a person stay in the jurisdiction of the judge, it has to be demonstrated that the requester has the right to request such a measure. The Commerce Code establishes that proof of such a right might be established through documents or witnesses.

If the request is made before filing the lawsuit, the party that requests such a measure will have to guarantee payment of damages and lost profits if the lawsuit is not filed.

If the request is made when filing the lawsuit, the request of the plaintiff and the guarantee will be sufficient for the measure requested to be granted.

The order to a person to stay where litigation is taking place means that such person cannot leave the jurisdiction of the judge where the litigation takes place unless he or she leaves a representative with instructions and duly funded to comply with the judgment, if any.

If the person requested not to leave the jurisdiction of the judge violates the prohibition, he or she will be responsible for a felony according to the Criminal Code, regardless of whether enforcement measures are taken to return that person to the place where the judgment is taking place.

Confinement of assets

Confinement of assets will take place when there is reasonable fear that the assets given as guarantee, or against which an action in rem will be executed, will be disposed of, hidden, dissipated, transferred or be insufficient; or when exercising a personal action, if the person against whom such an action is brought has no other assets except those against which the action will be executed, and there is reasonable fear that they will be disposed of, hidden, dissipated or transferred.

The judge will always grant the request of confinement of assets if the party that so requests (1) demonstrates that he or she has credit that has matured; (2) expresses the value of the claims or the things claimed, giving specific details of the things claimed; (3) claims under oath the reasons why he or she has reasonable fear that the assets given as guarantee, or against which the action in rem will be executed, will be disposed of, hidden, dissipated, or transferred; (4) in personal actions, states under oath that the debtor has no other known assets different from those against which the action will be brought; he or she will also state the reason why he or she has reasonable fear that the debtor will hide, dissipate or transfer the assets, unless it is cash or a deposit made with credit institutions or other assets dissipated that can easily be replaced; and (5) guarantees damages and lost profits that the measure could produce for the debtor if the lawsuit is not filed in the following three days or, if the lawsuit is filed, the other party is acquitted.

Interim measures

Interim measures can be granted either before the proceedings or during the proceedings. If requested before the proceedings, the measure will be granted without hearing from the other party, if all of the requisites are met. If requested after the proceedings have commenced, the judge will notify the other party of the request and will give him or her the right to answer to such a request.

iii Class actions

Class actions are duly regulated in Mexico in the Code of Civil Procedure.

The main guidelines for class actions are as follows:

  • a the competent courts to review class action claims are federal courts;
  • b class action claims can only be brought with respect to relations of consumers of goods or services, private or public and environmental;
  • c the entities or persons that can bring a class action are very limited;
  • d there are only three types of class action: ‘diffuse’ class actions, class actions ‘in the strict sense’ and class actions of an ‘individual homogeneous nature’;

• diffuse class actions are indivisible and are brought to claim diffuse rights, and the holders of such rights are an undetermined collectivity with the purpose of claiming the repair of the damage caused to a group of persons;

• class actions in the strict sense are indivisible and are brought to claim rights and collective interests, and the holders of such rights are a determined or determinable collective with the purpose of claiming the repair of the damage caused to individuals within such a group;

• actions of an individual homogeneous nature are divisible and are brought to claim rights and individual interests that have a collective incidence, with the purpose of obtaining from a third party forceful compliance with an agreement or its rescission;

  • e class actions can be of a declarative, constitutive or condemnatory nature;
  • f in class actions interim measures can be requested; and
  • g the judges have the right to issue interim measures.
iv Representation in proceedings

Anyone can act by himself or herself, or through an attorney in fact, in proceedings as long as he or she has legal capacity to do so. In the case of corporations or legal entities, they have to be represented either by their legal representatives, which could be their directors, or by anyone with sufficient powers granted by such a corporation.

v Service out of the jurisdiction

Any person may be served with documents outside the jurisdiction, as long as their domicile is located outside the jurisdiction of the competent court that will hear the case at stake.

In such cases, the requesting party should inform the court that the address of the defendant is outside its jurisdiction, provide to the court the address of the defendant and request the court to issue a formal written request to the competent judge to serve summons to such a party.

vi Enforcement of foreign judgments

The Federal Code of Civil Procedure establishes that foreign judgments can be enforced in Mexico if they comply with the following:

  • a formalities related to letters rogatory were complied with;
  • b they were not issued in an in rem action;
  • c the foreign judge had jurisdiction according to international rules consistent with those mentioned in Mexican law;
  • d the defendant was notified or served personally;
  • e the judgment cannot be overturned or modified by any means in the jurisdiction where it was issued;
  • f the action brought in such a jurisdiction is not pending between the same parties before Mexican courts, and the case was not first heard in Mexican courts;
  • g the fulfilment of the obligation ordered is not contrary to Mexican public policy; and
  • h the judgment fulfils the conditions to be considered authentic (apostilled).

Mexican courts can deny the execution of foreign judgments, even if they comply with all of the requisites mentioned above, if it is proven that Mexican judgments are not enforced in the jurisdiction where the judgment was issued.

For a foreign judgment to be executed, it has to be requested through letters rogatory and these have to comply with the following:

  • a they have an authentic copy of the judgment, award or judicial resolution;
  • b they have authentic copies proving that summons were served personally and that the judgment cannot be overturned or modified by any means;
  • c they are translated into Spanish; and
  • d the party that wishes to execute such a judgment gives an address where the homologation will take place.

The competent court to enforce a foreign judgment is the court of the domicile of the defendant or where the defendant has its assets.

Once the court receives the request for executing the foreign judgment, it will grant the parties nine days to lodge defences or exercise their rights. If they offer evidence, the court will set a date for a hearing. After the hearing the court will issue its judgment.

vii Assistance to foreign courts

Mexican courts are very open to assisting foreign courts. The Federal Code of Civil Procedure has a chapter devoted to assisting foreign courts, and it establishes that requests from foreign courts do not have to be legalised if they are transmitted by official authorities but that they do have to be translated into Spanish.

Mexican courts can assist foreign courts in any aspect, since the Federal Code of Civil Procedure does not establish any prohibition of assistance.

Letters rogatory have to be delivered to the required authority either through the parties, judicially or by diplomatic or consular agents or by the central authority of any of the countries involved in this process.

Once the letters rogatory are received by the court that will assist the foreign court, the court will assist the foreign court according to the applicable laws, but the foreign court can request the local court to avoid local formalities or to use specific formalities other than local formalities, if this is not in violation of Mexican public policy.

viii Access to court files

During the proceedings, court files are private; that is, only the parties in litigation or those authorised by the parties in litigation can access the court files.

After the proceedings, the judicial docket becomes public.

ix Litigation funding

It is not common for a third party to fund litigation, but it is not prohibited in Mexico.

IV LEGAL PRACTICE

i Conflicts of interests and Chinese walls

An attorney helping or representing different or several parties with opposing interests, either in the same case or in different cases, or accepting to represent first one of the parties and then the other, is criminally liable for up to three years in prison, plus the payment of a fine and suspension of his or her right to exercise the profession of attorney for the same number of years.

Chinese walls are not employed in Mexico; as practitioners are aware of the broadness of the description of criminal liability in this area, members of the same law firm are very conscious of the need not to represent parties with opposing interests.

ii Money laundering, proceeds of crime and funds related to terrorism

Mexican law does not establish specific responsibilities for lawyers with respect to money laundering, proceeds of crime and funds related to terrorism.

Any parties involved in any of these activities are treated in the same way, with a penalty of up to 40 years in prison.

iii Data protection

The legal framework governing the processing of personal data is the Federal Law of Protection of Personal Data in the Possession of Individuals.

The Law is applicable to everyone, except credit bureaus and entities whose purpose is the collection and storage of personal data, for their own use, with no intention of commercial exploitation.

For the purposes of data protection, the individual whose data is being used can request that his or her information be deleted, and the entity that has such data has the obligation to delete it, unless:

  • a it is related to parties in a private, social or administrative agreement, and such information is necessary for the development and fulfilment of such a contract;
  • b the law requires it;
  • c it is a barrier to judicial or administrative acts related to tax obligations, the investigation of crimes and updating of administrative sanctions;
  • d it is necessary to protect the legal interests of the owner;
  • e it is necessary for the purposes of public interest;
  • f it is necessary to fulfil a legal obligation of the owner; or
  • g it is being used in a specific treatment for the purposes of prevention or medical diagnosis, or health issues, as long as such a treatment is made by a health professional subject to secrecy.

Transfer or sharing of personal data with third parties, national or foreign, can be made without the consent of the owner of such information in the following cases:

  • a when such a transfer is established in a law or treaty to which Mexico is a party;
  • b when such a transfer is necessary for the prevention of disease or for medical diagnosis, sanitary aid, medical treatment or sanitary services;
  • c when such a transfer is made to controlling companies, subsidiaries or affiliated companies under common control of the responsible individual or a flagship company or any other company of the same group of the individual responsible for the information that operates under the same principles and internal policies;
  • d when such a transfer has to be made by virtue of an agreement entered into or that will be entered into by the owner, the person responsible or a third party;
  • e when such a transfer is necessary and legally requested for the purpose of maintaining a public interest or for the administration of justice;
  • f when such a transfer is necessary for the recognition, exercise or defence of certain rights in judicial proceedings; or
  • g when such a transfer is needed to maintain and fulfil a legal relationship between the individual responsible for the information and the owner of it.

V DOCUMENTS AND PROTECTION OF PRIVILEGE

i Privilege

As a general rule all documents may be considered as privileged, understanding such a concept in the sense that parties have no obligation to give such documents to another party, unless so requested by an authority.

ii Production of documents

Even though parties do not have the obligation to open their files to other parties, this general rule has an exception. This exception exists where one of the parties requests specific documents from the other. The request has to be very clear; that is, establishing date, sender, recipient, etc.

Therefore, if parties in litigation do not have in their possession certain documents (documents that are the basis for their claim or defence), they can request certified copies of such documents from the person that has them in his or her possession. Once such a request has been made, if the requesting party can prove to the court that it has requested a document but the document has not been delivered by the other party, the court can order the other party to give the certified copy requested.

Full discovery is not permitted in Mexico.

VI ALTERNATIVES TO LITIGATION

i Overview of alternatives to litigation

Mexico accepts and to some extent encourages ADR procedures to alleviate pressure on the courts from the overwhelming number of cases that have to be resolved.

ii Arbitration

Arbitration is very widely used in important commercial transactions. The Commerce Code has a specific chapter dealing with arbitration, and which incorporated the UNCITRAL Model Law on arbitration.

Awards issued by arbitrators are unappealable in Mexico, but the parties to arbitration may seek to nullify awards issued by arbitrators if any of the following occur:

  • a the party that requests the nullity proves:

• one of the parties to the arbitration agreement is affected by some legal incapacity, or the arbitration agreement is invalid by virtue of the law to which the parties have submitted it, or Mexican law;

• it was not duly notified of the appointment of an arbitrator or of the arbitration proceedings, or has not been able, for whatever reason, to assert its rights;

• the award refers to a dispute not contemplated in the arbitration agreement or contains decisions that exceed the terms of the arbitration agreement; or

• the composition of the arbitral award or the arbitral proceeding does not comply with the agreement executed by the parties; or

  • b the judge verifies that under Mexican law the subject matter of the dispute cannot be agreed through arbitration or that the award is contrary to public policy.

The statute of limitations for filing the nullification of an award is three months computed from the date the award was notified to the parties. The time frame for a nullity action is around one year.

Enforcement of arbitral awards can be denied in Mexico if the party against whom the award will be enforced demonstrates any of the causes for nullifying an award.

The general trend is that arbitral awards are enforced in Mexico.

iii Mediation

In recent years, mediation has played a very important role in resolving conflicts in Mexico. Along with the Mexico City National Chamber of Commerce and the Mexican Mediation Institute, local courts encourage mediation through their Centres for Alternative Justice.

iv Other forms of alternative dispute resolution

There are several other forms of ADR, which may at some point have an involvement with judicial proceedings.

During judicial proceedings, the court encourages the parties to reconcile their differences in hearings. Conciliators try to get parties to finalise litigation amicably and enter into an agreement.

The law also accepts that the parties to a dispute may appoint one expert, so that the expert renders his or her expertise and his or her decision is binding for the parties.

VII OUTLOOK AND CONCLUSIONS

The evolving Mexican legal system aims to be considered one of the most modern legal systems in the 21st century, and to achieve this legislators have been working hard to approve up-to-date laws.

Footnotes

1 Miguel Angel Hernández-Romo Valencia is a partner at Bufete Hernández Romo.