Introduction

The last years have been challenging for the Supreme Court of Justice (the “Supreme Court”) and the Federal Judiciary in Mexico. First, the COVID-19 pandemic and a novel and generalised closing of activities forced courts and tribunals to speed up the transition to electronic justice; second, the Congress enacted a bill that amended the organic law of the Federal Judiciary to improve justice administration and, third, the Judicial Branch has been in a constant conflict with the President and his political party.

Previous Mexico Trends & Developments chapters in this guide (2019, 2021, 2022 and 2023) have focused on the challenges the Judicial Branch faced with the COVID-19 pandemic and the modifications to its organic law; as well as the actions it took to successfully navigate these challenges. In this article, we focus on the biggest challenge that the Judicial Branch has faced yet, which could impact its survival as an independent arbitrator.

At the time of writing, the unionised staff of the Judicial Branch went on strike because the Congress has proposed to terminate 15 trusts managed by the Supreme Court and the Federal Judiciary. The purpose of most of these trusts is to act as collateral of labour benefits of the Judicial Branch and funds the Judicial Branch uses for implementing the reforms to its organic law or other procedural laws – ie, the transition to oral trials in commercial and criminal matters and the implementation of electronic systems. The strike is a movement rarely heard of in the Judicial Branch and will probably not have the desired effects for the unionised staff. The President and his political party are using the termination of these trusts as a campaign slogan for the upcoming federal elections in 2024 and they constantly repeat that such trusts were created to keep the privileges of the Supreme Court’s justices.

President Lopez Obrador’s dislike of the Supreme Court is a matter of public knowledge. The Supreme Court has stopped his administration and his political party – which hold the majority in Congress – from executing their most questionable decisions during their administration, such as (i) the implementation of certain modifications to the Electoral Regulator (Instituto Nacional Electoral) that could have compromised the upcoming Federal Elections; (ii) the militarisation of the National Guard and other civil entities; (iii) the President and Senate’s failure to appoint new commissionaires in the Antitrust Regulator (Comisión Federal de Competencia Económica) and the Governmental Transparency Supervising Body (Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales), that rendered such bodies inoperable; and (iv) the termination of the asymmetric rules imposed on Petróleos Mexicanos (PEMEX) to promote free market conditions in the oil and gas sector, among many other questionable decisions of the current administration. 

As will be mentioned below, the Supreme Court has still to decide on several matters of the utmost importance to the economic development of the country such as the amendments to the Power Industry Law and the Mining Law that are seen by licence holders as nationalisations or regressive measures that compromise investments in those sectors.

The future of the Judicial Branch will be subject to the upcoming elections. The President and his party have proposed to pass constitutional amendments to revamp the Supreme Court and the Federal Judiciary with, among others, a formula to select justices, magistrates and district judges through public elections. Such proposal requires a super-majority approval in Congress, and it is not only dangerous but could hamper the checks and balances required in every free democracy.

Although the administration of justice in Mexico is far from perfect and certain processes could be improved, the attacks by the Executive and Legislative branches pretend to undermine its legitimacy and independence from the current political parties. 

Below, we give some examples of recent activity by the Supreme Court and Federal Courts that evidence the importance of having an independent and true arbitrator.

Due Process in Legislative Processes

In December 2022 and March 2023, the Congress amended different laws on electoral matters. The amendments were approved by the President’s political party without the participation of the opposing parties, civil organisations and without respecting the rules for a true democratic analysis and debate. A minority in Congress filed an Unconstitutionality Action before the Supreme Court, arguing violations to due process.

These amendments, commonly known as “Plan B” were enacted after the President and his party failed to pass an amendment to the Constitution on electoral matters. Such amendments sought to restructure the Electoral Regulator, which to this date is a constitutional autonomous body, including a reduction of its staff, changes to the vote-counting process and limitations to its attributions on elections.

In May 2023, the Supreme Court ruled with a super-majority vote that the legislative procedure must guarantee the plural and equal participation of all the groups represented in Congress. More so, the Supreme Court found that the Congress breached the legislative procedure for the following reasons.

• The initiatives were presented for approval without being published before the session was begun to discuss them. This prevented the congresspersons from having the opportunity to know the initiatives, and consequently from issuing a reasoned vote.
• The initiatives were classified as urgent without complying with the requirements and justifications to do so. Such classification meant that the Commissions of the Chamber of Deputies and the Senate did not analyse, discuss or approve the initiative before passing it to rest of the congress for approval, even though the minorities repeatedly requested the appropriate time to review the initiative.
• The Chamber of Deputies and the Senate eliminated articles, although the text had been approved by both chambers.

The Supreme Court ruled that the legislative procedure is the basis of the democratic regime and not a mere formalism, and that compliance with the principles of legality, representation and deliberative democracy is the foundation for the direction of public affairs. The Supreme Court found that the minimum essential requirements that any legislative procedure must comply with, are: (i) respect for voting rules; (ii) publicity in the development of the legislative process and in voting, and (iii) the participation of all political forces represented in the Chamber (deputies or Senate) in the process of creating laws or amendments under conditions of freedom and equality, in a context of democratic deliberation.

This is a relevant precedent because the violation to the legislative procedure has a consequence, namely the unconstitutionality of the whole amendment or new law and not only certain provisions or articles. More importantly, with this decision the Supreme Court ensured that majorities in Congress do not abuse their position and approve any law or amendment without following a democratic process, ensuring that all voices are heard.

Energy Sector

During the current administration, modifications and amendments to laws and rules in the energy sector have been highly contested by permit holders. That tendency continues without a final decision by the Supreme Court or by Collegiate Tribunals at the time of writing.

In 2013, the Congress amended the Constitution to open the energy sector to private investment (including the power and oil and gas sectors). Although this has benefited the sector and consumers, the current administration continues its attempts to strengthen the role and market power of state-owned enterprises in the electricity market, the Federal Commission of Electricity (CFE), and in hydrocarbons, Pemex.

The government’s actions have forced permit holders to keep filing constitutional appeals to defend their rights. Probably the most important case is the amendment to the Power Industry Law (Amended LIE). In addition, Canada and the United States began a proceeding through the United States-Canada-Mexico Trade Agreement (USMCA) that could end with the imposition of trade sanctions against Mexico for the discrimination against international companies in favour of the CFE.

The legal proceedings are far from over and will become one of the most relevant decisions by the judicial branch that could influence the USMCA panels and imminent international arbitration disputes.

Ongoing amparos challenging the Amended LIE

Almost all private participants in the electric market filed amparos against the Amended LIE. The amparos have been submitted before the Specialised District Courts since 2021. District Courts have ruled in some of these cases that the Amended LIE is unconstitutional and therefore granted constitutional relief to the permit holders (protection against the Amended LIE). The government appealed such decisions and to this date, the Judicial Branch still needs to decide on the same.

Such decision is currently in the hands of the Second Chamber of the Supreme Court. This Chamber decided to attract (ie, certiorari) the appeals and issue a decision that will constitute the precedent required by the Collegiate Tribunals to decide on the remaining cases.

At the time of writing, Justice Perez Dayan and Justice Laynez Potisek have drafted opinions to declare the unconstitutionality of the Amended LIE, though such opinions still need to be discussed by the Chamber.

Justice Perez Dayan and Justice Laynez Potisek’s opinions on the Amended LIE

Justice Laynez Potisek’s opinion proposes to declare the unconstitutionality of several provisions of the Amended LIE and proposes the following.

• That, save from certain transitory articles, the articles that compromise the Amended LIE can be challenged through constitutional appeal at this point. That is, contrary to the arguments of the government, permit holders do not need to wait for the issuance of secondary rules or the application of each provision to have standing to appeal the same.
• The opinion exposes that the provisions of the Amended LIE affect the operation of the electricity industry, as they:
1. introduce a new model of agreement (ie, agreements with commitment to physical delivery), that can be entered into only by certain participants (ie, CFE);
2. grant preference to such agreements for the use of power transmission and distribution lines, as well as to legacy and external power plants that enter into such agreements;
3. remove the obligation of suppliers of basic services to enter into power purchase agreements through auctions;
4. introduce obligations to the regulatory authorities of the wholesale electricity market to consider agreements with commitment to physical delivery as a priority; and
5. modify the mechanism for granting clean energy certificates, so that generators not previously contemplated are included.
• That the Amended LIE is a regulatory system that modifies the dispatch criteria in breach of free market conditions – as it grants preference to the state-owned company, CFE – and to environmental principles – as it discriminates renewable generation to benefit conventional power plants.

Likewise, Justice Perez Dayan’s opinion also proposes to grant protection against most of the provisions of the Amended LIE. The difference between the opinions is that Mr Perez Dayan proposes general effects to the constitutional relief. In other words, that the constitutional relief should not be limited to the plaintiff but should have ripple effects for all participants in the power market.

Mining Sector

In May 2023, the President’s political party approved several amendments to the law and regulations in the mining sector following an initiative presented by the President (the “Mining Bill”). Like the “Plan B” on electoral matters, the Congress approved the Mining Bill without following the appropriate legislative procedure and without the participation of the opposing parties.

Some of the most relevant modifications that the Mining Bill introduces, which harm permit holders, are the following.

• Establishment of a public bidding scheme for granting mining concessions, which replaces the scheme of granting them to the first applicant. Those bidding procedures will be carried out by the Geologic Service System (Servicio Geológico Mexicano).
• Nationalisation of exploration activities. The Mining Bill reserves exploration activities for the Geologic Service System and limits the participation of private entities to exploitation and benefit activities. This modification limits the possibility for mining companies to find viable mining sites.
• Reduction of the term of mining concessions. Before the Mining Bill, concessions were granted for a term of 50 years, extendable once. The Mining Bill reduces the term of mining concessions to 30 years, extendable once for 25 more years.
• Creation of new causes for cancelling the mining concession and a new water concession for mining use, which includes stricter limitations for water use.
• Establishment of new social and environmental requirements for licence holders, as well as payment of 5% of the profits of the mining site to the indigenous communities on site.

Current mining concession holders consider the Mining Bill to be a regressive measure that ignores the reality of mining activity, as well as the constant need for investment. The Mining Bill caused a halt in foreign investment in new and current mining sites because of the lack of clarity of several provisions and the possibility that the government acts arbitrarily against mining companies.

As in the energy sector, this situation caused mining companies and the minority in Congress to file constitutional relief measures against the Mining Bill. Such constitutional means of defence are still under review by the Supreme Court (ie, unconstitutionality action filed by the minority in Congress) and by District Courts (ie, amparo trials filed by mining companies). 

At the time of writing, the Supreme Court has not issued an opinion yet on this matter and no Federal Court has issued a first instance ruling. On the injunctions requested by mining companies to avoid the application of the Mining Bill, District Courts and Collegiate Tribunals have had opposing decisions; some have granted injunctions to plaintiffs while others have rejected the same under public order arguments. This contradiction is currently under review by the Regional Plenary of Collegiate Tribunals.

As mentioned, the Congress approved the Mining Bill in the same session that it approved the “Plan B”, so a possible outcome of the unconstitutionality action is that the Supreme Court will invalidate the Mining Bill because of the violations to the legislative proceeding.

The lack of clarity on the decision of the injunctions along with the expectation that the Supreme Court will invalidate the Mining Bill has contributed to a situation of legal uncertainty for mining companies, some of which have decided to stop investing in mining sites while the controversy continues.

Together with the aforementioned cases, where the Supreme Court will decide on highly relevant matters, there are certain developments that could improve the administration of justice in the coming years: (i) the implementation of the National Code of Civil and Familiar Procedures, and (ii) the need to assess the possibility to limit endless amparo proceedings, when the Congress or the President enacts new laws to avoid judicial control (ie, minimum modifications to existing laws to create “new legislative acts”).

National Code of Civil and Familiar Procedures

In 2017, the Congress enacted certain constitutional amendments to improve the administration of justice. One such modification included enabling the Federal Congress to enact a single procedural code for civil and familiar matters. Before such modification, every State could adopt its own procedural code, which created contradictory provisions on similar matters that applied all across the country (eg, reasons to file a divorce petition, evidence requirements, etc).

Those constitutional modifications required the Congress to issue a National Code of Civil and Familiar Procedures before 16 March 2018, but the Congress ignored the deadline. Therefore, it was not until 2023, and after the Supreme Court ruled on amparo 265/2020 and obliged the Congress to act, that the National Code of Civil and Familiar Procedures was enacted.

Under the National Code of Civil and Familiar Procedures transitory articles, Local Congresses and the Federal Judiciary have until April 2027 to implement the Code in their jurisdictions.

The National Code of Civil and Familiar Procedures includes provisions to: (i) facilitate access to justice, such as the obligation of local judicial entities to implement electronic systems, (ii) make changes to the admission of evidence that breaks a formalistic tradition and ensures that the judicial branch decides on the merits rather than formal aspects; (iii) include additional protection for children and persons in vulnerable conditions; (iv) make rules for meetings with judges and magistrates in their private chambers, and among others, (v) make rules around evidence standing by non-governmental entities in collective actions.

These changes are relevant because they create better conditions for access to justice and because the provisions of the National Code of Civil and Familiar Procedures will apply consequentially to all other federal procedural laws (eg, amparo law).

Endless Amparo Proceedings

The road to make the amparo procedure an effective remedy for protecting human and constitutional rights constantly seems to have setbacks. Under a recent mandatory precedent issued by the Plenary of the Supreme Court – jurisprudence – Congress (federal or local) is enabled to enact the same content over and over even though it has been declared unconstitutional in a previous amparo proceeding.

One of the most important characteristics of the final resolutions issued by the judiciary, necessary for the existence of the rule of law, is the obligation to comply with the resolution and its force as law. Because of this and the relevance of amparo proceedings, the Amparo Law establishes severe consequences for the authorities that do not comply with the resolution (once it is decided definitively) and an expedited procedure in case the authorities state that the act/norm is to be ruled unconstitutional.

Through the jurisprudence, “when a law declared unconstitutional is amended or replaced by a law of similar or same content, a new trial is proceeding because it is a different legislative act”, the Plenary of the Supreme Court of Justice established that a new amparo lawsuit has to be filed against the amendment of a law or the enactment of a new one, “whatever its similarities, essential or accidental differences with the previous text” which was ruled as unconstitutional. This means that plaintiffs are not allowed to file the expedited procedure against the legislature for repeating the act declared unconstitutional. This decision was justified under the principles that amparo rulings may only benefit the plaintiff (principle that the court has recognised and admits modulation) and legal certainty because, in this way, the plaintiff will not be left without a challenge in case the Collegiate Court decides that the act declared unconstitutional was not repeated.

While it is true that different legislative acts constitute different manifestations of the will of Congress, the Plenary of the Supreme Court failed to set a safeguard for the plaintiffs to avoid endless procedures. Contrary to what the court allegedly intended, legal certainty is seriously hindered, as each time a new amparo proceeding will have to be filed, with the associated costs and time. In recent cases, the legislature does abuse the jurisprudence and before it must comply with the definitive resolution, it enacts a new law or an amendment with some form and minor changes but with the same material content so that the plaintiff must start a new amparo proceeding over and over. In most cases, as the authorities claim that the regulation serves the purpose to protect public health, security or the environment, the injunction is hard to obtain, even if the content between the two acts is equal. This not only harms the plaintiff but also the whole legal system, due to a large number of proceedings before the court.

This jurisprudence is particularly important in a context such as the one in Mexico, where the President has more than 55% of approval and condemns every judge, the legislature and political actor that does not agree with his views or policies. Even if final decisions issued by the courts are not complied with, there will be no legal certainty for the governed and, more importantly, there will be no rule of law, which is necessary so that individuals can carry out their business.

Under Article 17 of the Constitution and Article 25 of the American Convention on Human Rights, amparo proceedings must be a truly effective judicial remedy, so that the constitutional protection contained in the amparo judgment fulfils the purpose for which it was created. Therefore, the jurisprudence creates a state of legal uncertainty and undermines the amparo as an effective judicial proceeding as it allows the legislature to impose provisions that have been declared unconstitutional and to the detriment of the rule of law.

As can be seen from the topics discussed above, the coming years will be decisive for the Judicial Branch and for the checks and balances in place in Mexico. The Executive and Legislative Branches have the obligation to respect the Constitution and act accordingly and, in the past years, the Judicial Branch has been the brake which ensures the Federal Government does not act arbitrarily.