In Mexico, there are several mechanisms via which the assets owned by the counterparty in a court case can be identified. Such information can generally be accessed through public records that are available to any person or, where it is in the hands of private parties (or even the State), through court orders. The following is a summary of the sources of information and the ways in which a private individual can access various types of information.
Legal status of real estate
This information is available in the public property registries of each Mexican state. Each of these public registries contains information regarding the legal status of any real estate property, such as the owner or co-owners and the location of the property. Each public property registry allows users to ascertain what real estate an individual or legal entity owns, as well as the existence of third-party charges over such real estate or any other encumbrances.
Legal status of patents and industrial property records
The Industrial Property Gazette of the Mexican Institute of Industrial Property is the means of national communication through which information on patents and industrial property registrations is made public. This Gazette can be consulted through the Industrial Property Gazette Information System (Sistema de Información de la Gaceta de la Propiedad Industrial, or SIGA), which contains collected information dating back to 1873 on registered patents and – more importantly – their owners. This public system allows users to learn which patents and registrations an individual or legal entity owns, as well as the validity of such patents and registrations.
Legal status of rights related to copyright
Copyright has two facets protected by the Federal Copyright Law: moral rights and economic rights. The economic right of copyright is the recognition of the exclusive enjoyment of economic prerogatives and privileges by virtue of the creation of a literary or artistic work. The economic right of a literary work or creation is its value for pecuniary purposes.
The Public Registry of Copyright is the means by which all acts related to the ownership and alienation of the economic rights of authors are publicly recorded. Therefore, the Public Registry of Copyright, managed and administered by the National Copyright Institute, allows users to learn which individual or legal entity holds the economic rights to a literary work and to find out whether a person or legal entity holds any economic rights subject to seizure.
Legal status of commercial transactions and securities subject to public offering and intermediation
In Mexico, the Public Registry of Commerce is a universally accessible system through which acts of commerce in Mexican territory are made public and the creation of legal entities under Mexican law is recorded. This registry reveals a legal identity’s shareholders, as well as its main corporate acts and the amount of its capital stock. This information is relevant to the determination of the asset position of a party.
The National Securities Registry (Registro Nacional de Valores, or RNV) is a public means of dissemination administered by the National Banking and Securities Commission, via which the legal status of investment funds organised under the Investment Funds Law and securities of authorised issuers is made known. This registry enables individuals to identify securities issued (bonds, stock certificates, debentures, etc).
Legal status of assets subject to a guarantee
The Sole Registry of Personal Property Securities (Registro Único de Garantías Mobiliarias, or RUG) is a section of the Public Registry of Commerce through which financial institutions and creditors publicise the guarantees over movable assets they receive from their debtors. This registry provides information on the status of encumbrances on any movable property that may be subject to seizure. Although the main users are creditors and public notaries, the information contained in this registry is available to anyone.
National Transparency Platform
A final mechanism for the identification of assets, information on which may be accessed by any third party that submits a request for information, is the use of the National Transparency Platform. Although publicising the assets of legal entities is not the main purpose of the platform, it is possible to obtain information on legal relationships and assets derived from governmental relationships. The platform is administered by the National Institute of Transparency, Access to Information and Protection of Personal Data and enables the content of any government document (including public contracts) to be viewed – with special protection for sensitive information.
Banking or financial information held by credit institutions
In accordance with the fundamental rights recognised in Mexican law, banking information is classified as confidential information, protected by a principle known as “banking secrecy”. This principle prevents individuals from immediately accessing information related to financial transactions processed by credit institutions. However, as it is one of the most valuable and relevant assets in judicial proceedings, there are regulated mechanisms for access to this type of information.
Article 142 of the Credit Institutions Law establishes that credit institutions are obliged to provide information related to their banking operations (eg, current account contracts, credit contracts, trust operations) when requested by the judicial authority via a court order –provided the owner of the information, settlor, beneficiary, trustee, or agent is a party to the court case. The request for this information is made through the National Banking and Securities Commission. This mechanism is extremely relevant because it allows individuals to:
Information on foreign investment in Mexican companies
This information is not of a public nature – however, it is contained in the National Registry of Foreign Investments (Registro Nacional de Inversión Extranjera, or RNIE), which is administered by the Ministry of Economy and regulated by the Foreign Investment Law. Reliable information on the legal status of Mexican companies with foreign investment is registered in the RNIE, including:
A private individual may only obtain access to this information through a court order, mediated by judicial process. In such cases, the court must treat the information in a manner that safeguards the confidentiality of the entity.
In Mexico, judicial proceedings in all matters – especially civil and commercial – provide for precautionary measures. These judicial tools allow judges to secure the subject matter of the litigation by:
The purpose of these securing measures is – through a preliminary examination of the appearance of a good right of the subject to claim for payment of a benefit from another – to enable creditors to obtain the effective collection of the payment. The granting of this type of provisional measure during the process of issuing the judgment does not imply an advance or preliminary pronouncement on the nature of the judicial decision.
Under Mexican law, there are two types of judgments: interlocutory and final.
Interlocutory judgments are the procedural act by which the judge decides on some incidental issue that arises during the process, such as:
Final judgments are the culminating act by which the proceeding is terminated, in which the judge decides definitively on the subject matter of the litigation. Even though the judge makes a definitive decision regarding the dispute through the final judgment, it can only be executed once the parties have exhausted the available means of appeal within the time periods prescribed by law.
Judgments are categorised, based on their content, into the following classes.
Secondly, the Federal Code of Civil Procedures defines a judgment as a judicial resolution that determines the merits of the case. The code recognises that the resolution of judicial disputes may be carried out through the following three mechanisms.
New National Code of Civil and Family Procedures
Owing to the need to harmonise local and federal justice throughout Mexico, the National Code of Civil and Family Procedures (the “National Code”) was officially published in the Official Gazette of the Federation on 7 June 2023. This marks a significant change in the country’s legal landscape.
Once it comes into force, the National Code will repeal the Federal Code of Civil Procedure, as well as the civil and family procedural legislation of the federal entities. However, ongoing civil and family procedures at the time of the National Code’s entry into force will continue under the applicable legislation unless the parties jointly choose to adhere to the regulations of the new code. It is also worth noting that the accumulation of civil and family cases will not be allowed under the new legal framework.
The validity of the National Code does not imply the immediate repeal of the previously existing substantive and procedural laws. Therefore, the applicable substantive and procedural laws continue to be applied at both the federal and state levels in civil and family matters.
Therefore, for the purpose of the study at hand, the application of the Federal Code of Civil Procedure regarding national judgments remains in force.
The enforcement of judgments is carried out through foreclosure. Enforcement can be divided into procedural and extra-procedural. Procedural executions come from a jurisdictional authority where judgments, agreements and transactions are included. Extra-procedural executions arise from entities other than judges or courts, such as public notaries, mediators, or certain government agencies. However, prior to the execution of the judgment, the following conditions must be met:
Court Order to Enforce Compliance/Specific Performance
Following the final judgment in a court case in Mexico, the procedure by which the original judge who first heard the dispute proceeds to the compliance stage and then – if the defendant fails to comply voluntarily with the ruling – enforces the final ruling is known as via de apremio (foreclosure). The process begins with obtaining a judgment that can no longer be modified. Once this is obtained, the winning party must ask the original judge to request voluntary compliance with the judgment by the condemned party.
In the event the losing party does not voluntarily comply with the judgment, the judge will proceed to initiate a compulsory enforcement stage. For this purpose, the judge may use any appropriate enforcement measure to force the condemned party to comply with the judgment (eg, fines, seizure or even arrest). As a rule, in ordinary civil and commercial court cases, if the parties allow more than five years without seeking execution of the judgment, they will lose their right to do so. In executive, oral, or abbreviated court cases, if the parties allow more than three years to pass without seeking execution, they will generally lose their right to do so.
If the winning party seeks the anticipated execution of the judgment without it being final and irrevocable, it must grant a bond or guarantee to cover the damages caused by the anticipated execution. This bond or guarantee will be delivered to the party that is subject to the execution in the event the condemnatory judgment is revoked. However, the judge has the power to deny an anticipated execution so as to avoid unnecessary use of judicial resources.
The authors note that there are special conditions that apply to the enforcement of Mexican judgments.
There is no average timeframe for the enforcement of a judgment delivered by a domestic judge, as various factors can modify the time – and the cost – on a case-by-case basis. However, the following considerations should be taken into account.
There are approximate procedural times for the intermediate steps between obtaining the judgment and its enforcement.
The timeframe and costs for enforcing a judgment in each specific case will also be affected by:
Once the court issues the final judgment and the period for voluntary compliance granted by the judge to the condemned party has elapsed, different scenarios may unfold at the enforcement stage. This enforcement procedure or stage is the final phase of any judicial proceedings and its purpose is to use force to obtain compliance with the final judgment. This is why, depending on the content of the judgment, the authors can premise the following.
Please note that, pursuant to case law issued by the Supreme Court of Justice and the collegiate courts in Mexico City, the suitable remedy against the resolutions in the post-judgment procedures for determining defendants’ assets is the amparotrial if:
Enforcement is the mechanism available to the parties that obtained a favourable judgment in the event that the condemned party refrains from voluntarily complying with the judgment within the term granted by the judge. As such, the condemned party has three ways of preventing the enforcement of a judgment in which its assets are secured and taken to public auction:
The person subject to the final judgment may only question or challenge the process of enforcing the judgment if the acts therein do not comply with the law or violate constitutional principles, such as privacy, confidentiality, or bank secrecy. However, through such challenge (appeal and amparo proceedings), the finality of the judgment and the existence of an enforcement procedure cannot be questioned – rather, only the guidelines issued by the judge to achieve its performance.
Mexico does not have a catalogue of judgments that are unenforceable. However, the judgment can only be enforced by the judge of origin – ie, by the judge who originally heard the dispute – except in cases of extinction or reassignment of judicial bodies. Additionally, in order to be enforceable, the judgment must be final – ie, the legal term must have elapsed without the parties having challenged the judgment or, if they have done so, the remedy must have been declared unfounded or insufficient by a final judgment. If it has been modified, only the content of the last decision delivered in the court case may be taken into account.
In Mexico, there is no central record of each judgment delivered by judges. On the other hand, when judgments order the seizure of real estate, such seizure must be registered in the corresponding Public Registry of Property. However, such registries do not register judgments –only property of a specific nature.
Mexico has ratified several international treaties regarding the enforcement of judgments, including:
Likewise, the national legislation in civil matters has adapted its internal framework to recognise the enforcement of judgments within national territory, as well as delimit the procedure and requirements. In this sense, it sets forth that foreign judgments, private arbitral awards of a non-commercial nature and jurisdictional resolutions will be executed by means of an enforcement. The ancillary proceedings to enforce a foreign judgment will be limited to examining the authenticity of the foreign final judgment and whether it must be enforced in accordance with the provisions of Mexican territory.
Among the necessary conditions for executing a foreign judgment, Article 571 of the Federal Code of Civil Procedures and Article 1347-A of the Commercial Code set forth the following requirements:
In the realm of the enforcement of foreign judgments and arbitral awards, The National Code (see 2.1 Types of Domestic Judgments (New National Code of Civil and Family Procedures)) introduces significant contrasts to the Federal Code of Civil Procedure. These changes aim to harmonise the recognition of foreign judgments in Mexico, expand the jurisdictional authority’s options, and strengthen international judicial co-operation.
Therefore, it is essential for parties involved in the enforcement of foreign judgments to familiarise themselves with the provisions and procedures of the National Code. When the new code is implemented throughout the federal entities, it will be necessary to adapt legal practices and strategies to the changes introduced as a result.
In matters of a civil and commercial nature, including bankruptcy proceedings, the law imposes the same burden of exhausting the ancillary proceedings to enforce a judgment on the parties. Therefore, the approach to enforcing foreign judgments is comparable in each specific case.
Furthermore, it is important to highlight that Articles 1181 to 1191 of the new National Code provide for the recognition and enforcement of foreign judgments and present innovative approaches compared to the Federal Code of Civil Procedure. The main provisions are as follows.
There are four types of foreign judgments that cannot be enforced within Mexican territory.
Requirements to Initiate the Enforcement Procedure
For the process of enforcing a foreign judgment to begin, the judge or court must issue a letter rogatory, to which the petitioner must attach:
Likewise, for proceedings within Mexican territory, the plaintiff must indicate an address for service of notice in the jurisdiction of the court before which it is requesting the enforcement of the foreign judgment.
Jurisdiction for Enforcement Proceedings
In terms of determining which court has the jurisdiction to enforce the foreign judgment, it will be sufficient to take into consideration the national address of the defendant or, where this is unknown/absent, the location of the defendant’s assets. A local judge or a federal judge may deal with commercial matters.
The ancillary proceedings to enforce a judgment will begin with a personal summons to the executing party and the executed party, who may present their defences and exercise their corresponding rights and – if applicable – offer the pertinent evidence. In this part of the process, it is important to reiterate that neither the court of first instance nor the appeal court may review the merits of the judgment or the reasons or grounds of fact or law.
Additionally, the decision delivered in the first instance may be appealed in both eventualities – ie, whether it denies or grants the execution. Questions relating to attachments, seizure of assets, appraisal, auction and other matters concerning the liquidation and enforcement of a judgment delivered by a foreign court will be resolved by the court in charge of the enforcement process. The distribution of funds resulting from the auction will remain at the disposal of the foreign judge delivering the judgment.
The length of time taken to enforce a foreign judgment – and the costs involved – will vary from case to case. Fundamentally, however, costs and waiting time will ultimately depend on:
Any estimate of the cost of enforcing foreign judgments must also take into consideration the individual cost of the translation of the foreign court decision (if applicable). One way of reducing costs is to find an official expert translator recognised by the judge in charge of the judicial enforcement procedure. This will avoid the need to opt for a second translation if the corresponding judge does not recognise the expert nature of the translator.
Likewise, in terms of reducing times and costs, another viable alternative is the use of Mexico’s emerging online court case systems. In the authors’ experience, the federal online court case system is more efficient and contains more functions than those available in local jurisdictions. The adoption of an online court case system is a key means of achieving efficiency and low cost in a judicial proceeding, even more so if the enforcement of a foreign judgment is involved. It is possible for the parties to view notices, pleadings and judicial resolutions – as well as file initial pleadings and motions – through an online court case system known as the “Online Services Portal”, thereby avoiding unnecessary transfers to the court and greater agility for the filing of judicial motions.
The only grounds for challenging and opposing the enforcement of a foreign judgment are those contained in Articles 571 of the Federal Code of Civil Procedures and 1347-A of the Commercial Code, ie:
However, Mexican judges are prevented from analysing the merits of the case or the subject matter of the foreign judge’s decision. Likewise, the judgment by which the Mexican judge orders the execution or denies it may be challenged by means of an appeal by the non-complying party. Once notified of the decision, the party will have 12 days to appeal in civil matters and nine days in which to appeal in the case of commercial matters.
The Principle of Minimum Intervention in Mexican Judicial Practice
In recent years, the judicial criteria issued by Mexican judges and courts in commercial arbitration matters have been highly criticised, on the grounds that their interpretation strays far from the principle of “minimum intervention”. The principle of minimum judicial intervention (or minimum intervention) is based on Article 17 of the Mexican Constitution, which recognises ADR mechanisms and affords them a status comparable to centralised dispute resolution before the courts. Therefore, ADR mechanisms are not subsumed by the state jurisdiction but merely contribute to its execution and collection.
Although the latest legislative reform on commercial arbitration in Mexico – through which several provisions of the Commercial Code were amended to adopt the UNCITRAL Model Law on International Commercial Arbitration 1985 (the “UNCITRAL Model Law”) – established the principle of minimum intervention as a fundamental and guiding principle for jurisdictional function in commercial arbitration, the judicial criteria that have been developed around it hinder compliance with such principle. As an inherent consequence of the aforementioned improper judicial practice, the authors have identified the following main complications that litigants may encounter when appearing before a Mexican judge to request the recognition and enforcement of an arbitral award.
Five Main Complications When Enforcing an Award in Mexico
Simultaneous enforcement and annulment of arbitral awards
In Mexico, the simultaneous processing of an enforcement proceeding and a nullity proceeding with regard to the same arbitral award is not prohibited. This could potentially lead to contradictory rulings on the validity of an arbitral award by different Mexican judges.
It is important to note that Mexican law provides a mechanism for the joinder of both proceedings (enforcement and annulment). However, such procedure is only feasible if the hearing of pleadings has not been held in either proceeding. Several Mexican collegiate courts have established that, in these cases, it must be understood that the enforcement and nullity proceedings are autonomous and deal with a different issue.
The challenge to the enforcement of an arbitral award is not resolved immediately
The amparo proceeding is a judicial procedure aimed at the control of constitutionality, whereby a district judge reviews whether the challenged acts of the authorities are constitutional and protect the human rights of individuals. Otherwise, they must revoke such acts of authority. Previously, case law considered that the enforcement of an award could be challenged through a “direct” amparo proceeding – in other words, a single-instance amparo proceeding.
However, in a new case law, the Mexican Supreme Court of Justice determined that the enforcement of an award can be challenged through the “indirect” amparo proceeding and not the “direct” amparo proceeding. Under Mexican law, even though both types of amparo proceedings have the same purpose, the indirect amparo proceeding has two instances, whereas the direct amparo proceeding has only one instance (with exceptions).
The foregoing implies that the judgment delivered in an indirect amparo proceeding is not final and may be subject to a motion for reconsideration of an administrative decision. Consequently, this revision by the Supreme Court of Justice forces the parties to face a double-instance amparo proceeding. Instead of a single-instance amparo proceeding to obtain a final judgment for the enforcement of the award, the arbitrability of the matter depends on the arbitrability of the case.
The arbitrability of the matter depends on Mexican law
Before Mexican courts, the enforcement of the award depends on whether the subject matter of the dispute settled in the award can be arbitrated under Mexican law, even in the case of international commercial arbitration. This implies that, even if the dispute was subject to arbitration under the law of the forum where the arbitral award was rendered, the award will not be enforceable in Mexico if Mexican law does not allow the dispute to be subject to arbitration.
In this respect, Mexican law adopted a centralised position concerning the performance of arbitral awards in Article 1462 of Section II of the Commercial Code. This is due to the fact that an award’s capacity to be enforced depends on the arbitrability of the matter according to Mexican law – regardless of whether the award is included in a valid decision by the arbitral court. This creates a conflict when enforcing an arbitral award, as – despite the fact that an arbitral tribunal with competent jurisdiction has definitively issued the award – it cannot be enforced within Mexican territory unless the dispute is subject to arbitration under domestic law.
This limitation was included as a basis for the denial of awards by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”) – specifically, in Article V. However, the New York Convention states that the judge may refuse to enforce the award in these cases but does not have to (ie, it is not mandatory).
Uncertainty concerning the concept of public order
This complication when enforcing arbitral awards does not derive from the prohibition established in the Commercial Code, as the Mexican legislator sought to safeguard the fundamental rules of Mexican law. The problem derives from the lack of a clear and binding judicial criterion as to what falls under the undefined concept of “public order”.
The party opposing the enforcement of the award has in its hands a tool that has not been clearly defined, as the judge may interpret the concept of “public order” as broadly as possible, depending on the needs of the parties. The difficulty of handling this concept has caused problems in other jurisdictions, as well as Mexico. By way of an example, the Swiss Federal Tribunal has emphasised the complexity of this issue in Tensaccia SPA v Terra Armata RL (dated 8 March 2006).
Meaning of arbitration agreement in Mexican courts
It should be emphasised that Article 1416 of Section I of the Commercial Code establishes that the arbitration agreement is, specifically, a clause or independent agreement by which the parties decide to submit to arbitration all or certain disputes that have arisen or may arise between them. In this respect, the wording of the article is clear and firm.
One of the grounds for non-enforcement of an award that the Commercial Code sets forth – the origin of which derives from the New York Convention – is if the award contains decisions that exceed the terms of the arbitration agreement. Therefore, according to Article 1416, the most logical interpretation would be that the award should not be enforced if it concerns matters that are specifically not included in the arbitration agreement.
However, some courts have established that the judicial review of the concordance of the award with the arbitration agreement implies the power to review whether the decision of the arbitrators is also in accordance with the binding conditions of the legal relationship of the parties beyond the mere arbitration clause.
In conclusion, the aforementioned complications are not exclusive to Mexico. However, they have particular potential to violate the rights of the parties that decided to submit their dispute to arbitration. Their concurrence demonstrates the urgency for Mexican judges to adhere more closely to the principle of “minimum intervention” that prevails in arbitration matters.
Under Mexican law, the approach to enforcing arbitral awards varies depending on the type of award. The authors believe that there are four main categories into which arbitral awards can be classified, according to their subject matter:
The main differences in their enforcement are as follows.
Domestic or International Commercial Arbitration Awards
The enforcement of arbitral awards in commercial matters (domestic or international) must be carried out through the bodies belonging to the federal judicial power or the state judicial powers in each state, through a specialised judicial proceeding (see 4.4 Process of Enforcing Arbitral Awards). The court responsible for the enforcement of a commercial arbitration award will be the court located in the jurisdiction where the arbitration takes place or, failing that, where the defendant’s address or assets are located (in that order).
For the enforcement of the award, Mexican commercial law only requires the presentation of the duly authenticated original award (or certified copy thereof) and the original arbitration agreement (or a certified copy thereof), which is in accordance with the New York Convention. If the award is in a language other than Spanish, it will be necessary to submit a translation by an official expert translator.
Labour Matters Awards
For the resolution of labour disputes, the Mexican Federal Labour Law allows the parties to settle the dispute through an arbitration award before the conciliation centres (Article 939). In this respect, owing to the 2019 amendment to the Federal Labour Law, new conciliation and ADR agencies were created – namely, the Federal Centre for Labour Conciliation and Registration and state conciliation centres.
Pursuant to Article 939 and Article 940 of the Federal Labour Law, the federal labour courts will be in charge of proceeding with the enforcement of such arbitration awards – enforcing them in the same way as a judgment delivered in a labour law court case would be enforced.
Consumer Protection Awards
Mexican consumer protection legislation – specifically, the Federal Consumer Protection Law – allows for a specialised procedure for the enforcement of awards delivered to settle consumer disputes. In this respect, it is important to emphasise that the arbitral awards referred to in this law are delivered solely and exclusively by the Federal Consumer Protection Agency (Procuraduría Federal del Consumidor, or PROFECO) or by the arbitrator appointed by the parties (Article 121).
The enforcement of this type of arbitral award must be carried out within 15 days following service of notice, unless otherwise expressly agreed by the parties. For the enforcement of arbitral awards issued by the PROFECO, the courts also have competence, but enforcement will be carried out through an executive proceeding as though the award were an enforceable title that entails execution – that is to say, through an abbreviated judicial procedure that allows for a provisional seizure.
Financial Services User Protection Awards
Finally, Mexican legislation on the protection and defence of users of financial services also provides for the issuance of an arbitration award as an alternative means of resolving disputes. The arbitration procedure is carried out by the regional, state or local delegations of the National Commission for the Protection and Defence of Users of Financial Services (La Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros, or CONDUSEF). The amiable compositeur resolving the arbitration procedure is CONDUSEF itself – the arbitration awards of which will have the status of an enforceable judgment (pursuant to Article 73 of the Law for the Protection and Defence of the Financial Services User).
As to the issue in question, the enforcement of such awards is overseen by CONDUSEF, which may adopt all necessary measures to ensure the execution and collection of the final arbitral award, including enforcement measures. In the event that an award is made against a financial institution, CONDUSEF can appeal to the courts that have competent jurisdiction. In the authors’ opinion, such courts may be the courts in charge of commercial or administrative matters, depending on the subject matter of the arbitration award.
Pursuant to Mexican commercial law, certain domestic and international commercial arbitration awards will not be enforced by Mexican judges despite the initiation of the corresponding lawsuit. For the purposes of this chapter, awards are not enforced for the following reasons.
Defects in the Arbitration Proceedings
Awards will be unenforceable where defects in their structure, processing or issuance do not affect the decision itself but, rather, form the circumstances that led to the arbitral decision. The main distinctive feature of this category is that the defect that causes the award’s non-enforcement is not in the reasoning or decisions of the arbitrators but in the process or framework within which the decision was made.
Awards with pathological arbitration agreements
Awards may not be enforced if the arbitration agreement is defective. An example of a pathological arbitration agreement would be where one of the parties to the arbitration agreement was affected by some disability. Although the commercial legislation is not clear in this respect, the authors believe that judges must determine whether a person is incapable according to the law governing the contract or legal act in which such arbitration clause is included. Another example of a pathological arbitration agreement would be one that is not valid by virtue of the law governing the contract or legal act in which the arbitration clause is included.
Awards that violate due process
Awards will not be enforceable where there has been a procedural violation in the arbitration process, including violation of the essential procedural formalities (eg, service of notice, guarantee of hearing, and opportunity to prove and deliver a final decision).
Defects in the Arbitral Decision
This second category includes all those awards whose grounds for non-enforceability derive from the decisions made by the arbitrators. Although Mexican judges are prevented from reviewing the merits of the case, the following defects can be found in arbitral decisions.
Arbitral awards will not be enforced where there is a disparity between the decision of the arbitral tribunal and any of the following:
Awards are unenforceable where their subject matter cannot be subject to arbitration under Mexican law. Therefore, even if such award is in accordance with the law agreed upon by the parties, a Mexican judge may not enforce the award if it deals with any matter the arbitrability of which is prohibited by Mexican law.
Awards that violate the public order
Awards are unenforceable if their content is in violation of public order. An award may be in violation of public order – understood for practical purposes as violating prohibitive and mandatory provisions of Mexican law – but its subject matter cannot be arbitrated, and vice versa.
Annulment by Res Judicata
Awards that have been annulled or suspended by a judge in the country in which they were rendered may not be enforced under Mexican law. Even if a Mexican judge has annulled an award, the enforcement of which is also being processed by Mexican courts, such award will be unenforceable – given that, under Mexican commercial law, judges must suspend the enforcement of an arbitral award in the event that they are notified of its nullity. It is important to mention that courts in some countries have nonetheless taken the decision to enforce annulled awards in common law, in view of the pro-arbitration principle – for example, France (in the “Hilmarton” case), Austria (in the “Zdravilisce Radenska” case), Belgium (in the “Sonatrach v Ford” case) and the USA (in the “Chromalloy” case).
For the enforcement of an commercial arbitral award, the Commercial Code established a specialised procedure with few procedural stages. This is regulated by Article 1472 of the Commercial Code.
Requirements of the Initial Brief
The initial brief submitted by the plaintiff must indicate the following:
Likewise, the evidence and documents in support of the action – along with enough simple copies of the claim and its annexes to be delivered to each defendant – must be attached to the initial brief. It is necessary for the admission of the claim that the plaintiff exhibits the duly authenticated original award (or a certified copy thereof) and the original arbitration agreement (or a certified copy thereof).
If the parties do not file an amparoproceeding against the final judgment delivered by the judge within 15 business days following service of notice, the judgment will become final – meaning that it may be enforced voluntarily or by force.
There is no clear parameter by which to determine the average time it takes enforce an award in Mexico nor the costs involved. However, several factors influence the cost and duration of the procedure.
In Mexico, judges cannot review the merits of the award. Once the arbitral tribunal issues the final award, the parties cannot challenge it through an ordinary appeal. However, the parties may challenge the judicial resolution that orders the enforcement of an arbitral award by the means of an indirect amparo proceeding, which has two instances – given that the judgment delivered therein may be subject to review by a collegiate court.
On the other hand, the parties have the option of invalidating the award through a nullity proceeding, without this allowing the judges to review the merits of the case. The provisions adopted in the Commercial Code for such a proceeding are equivalent to those contained in the New York Convention – ie, such court case will only consist of analysing the validity of the award but it is not an ordinary means to achieve its enforcement.
One Step Back: Competence-Competence
The principle of “competence-competence” has been embodied in Article 1432 of the Commercial Code since 1993. In spite of this, in 2006, the Supreme Court of Justice determined that arbitration agreements must be annulled by a judge rather than an arbitration court.
Today, such criterion of the Supreme Court is understood to have been superseded, as it was established in the Commercial Code in 2011 that any matter in which there is an arbitration agreement must be referred to arbitration at the request of any of the parties. This request can only be denied if there is a final decision declaring the nullity of the arbitration agreement or because the nullity, ineffectiveness or unenforceability of the arbitration agreement is notorious.
The provisions that govern the recognition and enforcement of foreign judgments in Mexico are:
Mexico is a party to the following international treaties related to enforcement of foreign judgments.
The courts that have jurisdiction to recognise and enforce foreign judgments are:
Foreign Judgments: Enforceability
In Mexico, foreign judgments can be recognised and executed, although those foreign judgments arising out of an in rem action cannot be recognised and executed.
A foreign judgment, before being recognised and executed, must be final and binding; ie, it must be res iudicata in the country where it was rendered.
A foreign judgment is not enforceable if it is subject to any kind of appeal in in the country where it was rendered.
In order to make an application for the recognition and enforcement of a foreign judgment, Mexican law establishes different statutes of limitations, depending on the subject matter of the judgment.
In commercial matters, the limitation period for making an application for recognition and enforcement of a foreign judgment is three years, if the judgment is issued in an executive proceeding, and five years if the judgment is issued in an ordinary proceeding.
In civil matters, the limitation period for making an application for recognition and enforcement of a foreign judgment is ten years.
Process of Recognition and Enforcement of Foreign Judgments
Recognition and enforcement of a foreign judgments is carried out through the same process.
The proceeding for recognition and enforcement of foreign judgments is as follows:
The judgment issued by the court is appealable.
If the judgment denies execution of the foreign judgment, such judgment is appealable, and the proceeding will be stayed.
If the judgment decrees the execution of the foreign judgment, such judgment is appealable, and the proceeding will continue.
In order to file a lawsuit requesting the recognition and enforcement of a foreign judgment, the following documents have to be attached to the lawsuit: (i) a letter rogatory issued by the requesting judge; (ii) authentic (original) copy of the judgment that will be executed; (iii) authentic (original) copy of the document where it is proven that the defendant was personally served summons of the lawsuit (according to Mexican law); (iv) authentic (original) copy of the document where it is proven that the foreign judgment is res iudicata, or that there’s no recourse against such judgment; (v) Spanish translation of all of the documents previously mentioned (in (ii), (iii) and (iv) above)); and (vi) that the person that wishes to execute such foreign judgment establishes an address in the place of the jurisdiction of the tribunal that will recognise and enforce such foreign judgment.
In Mexico, there are no fees payable to Mexican Courts for recognition and enforcement of foreign judgments, or for any other case.
The court of first instance takes approximately three months to issue a judgment related to the declaration of enforceability.
As previously mentioned, the declaration of enforceability or not, can be appealed and the parties can file an amparo suit against the judgment of the court of appeals.
The appeal and amparo can take up to 12 months to be resolved.
The plaintiff seeking the declaration of enforceability of a foreign judgment can seek injunctive relief while the recognition and enforcement process is ongoing.
Recognition and enforcement of a foreign judgment can be challenged by the defendant on the following grounds: (i) if formalities established in the procedures for letters rogatory are not met; (ii) if the foreign judgment was issued by an in rem action, as previously mentioned; (iii) if the judge or tribunal that issued the judgment to be enforced was not competent to try and issue a judgment according to the international laws that are accepted and adopted by the Procedural Code (Under Mexican law it is considered that the judge or tribunal is not competent when the parties expressly agreed that the competent courts are the Mexican courts); (iv) if the defendant was not personally notified or served according to Mexican law, so that the right to be heard and defended was denied; (v) if the foreign judgment is not res iudicata in the country where it was issued or that there is still some ordinary recourses against such foreign judgment; (vi) if the cause of action is still pending between the same parties before the Mexican courts, and the Mexican courts had first heard about such case, or at least the letter rogatory to serve summons had been given to the Secretary of Foreign Affairs or to any authority of the state where summons should be served. If a final judgment has been already issued by Mexican courts in the same cause of action: (vii) if the obligation basis of the recognition and enforcement is against Mexican public policy; and (viii) if the documents filed cannot be considered as authentic.
Notwithstanding the previous elements are met, Mexican courts can refuse the recognition and enforcement of a foreign judgment if the defendant proves that in the country where the judgment is issued, judgments and awards issued by foreign authorities are not recognised and executed in similar cases.
In any case, the defendant can seek injunctive relief to prevent enforcement while a challenge is pending.
Judgments of Recognition and Enforcement of Foreign Judgments
The first thing that the Mexican judge will review when receiving the letter rogatory of the foreign court is if service of process in the foreign proceeding was made correctly, notwithstanding that the parties request it or not.
It should be noted that Mexico has filed a Reserve in the issue related to serving of summons to defendants residing in Mexican Territory when a proceeding in a foreign country has been initiated against such individual, stating that summons should be served personally and according to Mexican laws.
The court that will recognise and enforce the foreign judgment will review the jurisdiction of the foreign court in the initial proceedings, only if the defendant opposes an affirmative defence in such sense.
Mexican courts cannot examine or decide if the foreign judgment or award is fair or unfair, or the reasons and law applied by the judge. Mexican courts can only examine the authenticity of such judgment and if it should be executed or not according to Mexican Law.
Mexican Courts can review the foreign judgment for compliance with public policy if the defendant brings such issue as a defence and proves that Mexican public policy has been breached, and if it is the case, the courts can deny execution of the judgment.
Mexican courts cannot examine or decide with respect to the merits of the foreign judgment.
If the foreign judgment conflicts with a previous judgment in relation to the same dispute between the same parties, then Mexican Courts will deny recognition and execution of such foreign judgment. In this case it is important to determine which court heard first about such case, or if the letter rogatory to serve summons had been given to the Secretary of Foreign Affairs or to any authority of the state where summons should be served.
Aside from what has previously mentioned, there are no other grounds for a Mexican Court to refuse execution of a foreign judgment.
If a foreign judgment cannot have full recognition, partial recognition and enforcement is possible, if the plaintiff request such partial recognition and enforcement.
The award of costs is only granted in very specific cases in Mexican Courts.
The general principle of costs is that the losing party should pay costs to the other party.
However, such principle is decided on a case-by-case basis, depending on if the plaintiff and/or the defendant acted in bad faith or not.
The judgments related to recognition and enforcement of foreign judgments can be appealed.
If the judgment denies execution of the foreign judgment, such judgment is appealable, and the proceeding will be stayed.
If the judgment admits the execution of the foreign judgment, such judgment is appealable, and the proceeding will continue.
As also mentioned, the applicant may seek injunctive relief while the appeal is pending if the judgment accepts the execution of the foreign judgment.
Enforcing a Foreign Judgment
Any issues related to seizure of assets, deposit, appraisal, sale in public auction and any other related to the liquidation and execution of the judgment issued by a foreign tribunal will be resolved by the judge in charge of the recognition and enforcement of such judgment.
The monies that are received due to the sale in public auction of the assets of the defendant will be sent to the foreign court.
The foreign judgment will only produce effects between the parties that were part of the original foreign proceeding, it cannot damage or undermine any other individual/company.
Mexican law is extremely formalistic when dealing with serving summons, as previously mentioned, therefore it is imperative that local counsel be hired when serving summons to the defendant in a foreign proceeding.
Public policy is a very foggy issue that has to be addressed when the arbitration takes place; we recommend that local counsel be hired in order to review and make an analysis of the merits of the arbitration and its role before Mexican Public Policy.
A new National Code of Civil and Family Proceedings has been enacted in Mexico, which will come into force within the next four years, at the most.
Some of the most important issues that will impact the recognition and execution of foreign judgments in Mexico, as it relates to the Mexican Courts not recognising and enforcing a foreign judgment, are the following: