1 Legal framework
1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
The arbitration regime is set out in Book 5, Title 4 of the Commerce Code (Articles 1415–1480). A significant limitation in the arbitration regulation is Article 1423 of the Commerce Code, which requires the arbitration agreement to be in writing.
1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
The Commerce Code provides for a monist system, which does not differentiate between domestic and international arbitration; it applies to both, pursuant to Article 1415.
1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
Yes, the Commerce Code implemented the UNCITRAL Model Law in 1993.
1.4 Are all provisions of the legislation in your jurisdiction mandatory?
No, only certain provisions of the Commerce Code are mandatory and establish limits to party autonomy, such as Article 1434, which provides for the principles of party equality and due process.
1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?
No.
1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
Mexico ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 14 April 1971. No reservations were made.
1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?
Yes, Mexico has ratified the following conventions:
- The Inter-American Convention on International Commercial Arbitration (Panama Convention) in 1978;
- The Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards (Montevideo Convention) in 1987; and
- The Convention on the Settlement of Investment Disputes between States and Nationals on Other States in 2018.
2 Arbitrability and restrictions on arbitration
2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?
The Code of Commerce does not specify which subjects are not arbitrable; it states only that if a subject is not capable of being settled by arbitration, there will be grounds to set aside the award and reasons to refuse its enforcement. It is generally accepted in Mexican jurisprudence that parties may submit to arbitration matters of free disposition (capacity to undertake legal transactions), limited only by:
- Norms of mandatory application – for example, Article 568 of the Federal Code of Civil Procedures; or
- Matters of criminal justice.
2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?
No.
3 Arbitration agreement
3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?
The arbitration agreement must:
- Comply with the requirements set out in the Federal Civil Code (ie, capacity, form, licit purpose and absence of defects in consent), given that, in essence, it is a contract; and
- Be executed in writing, in terms of Article 1423 of the Commerce Code.
3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
Yes, Article 1432 of the Commerce Code follows Article 8 of the UNICTRAL Model Law and states that the arbitration clause is an independent agreement to the contract of which it is a part.
3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
The arbitral tribunal will determine the place of arbitration, taking into account:
- The circumstances of the case; and
- The convenience of the parties.
The tribunal will also determine the language of the arbitration, unless the parties have agreed otherwise.
4 Objections to jurisdiction
4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
A challenge should be raised no later than the submission of the response to the request for arbitration. If a matter exceeds the scope of the authority, the party must present the challenge immediately. The arbitral tribunal may admit challenges at a later stage if the delay is justified.
4.2 Can a tribunal rule on its own jurisdiction?
Yes, in terms of Article 1432 of the Commerce Code, the arbitral tribunal may rule on its own jurisdiction following the competence-competence principle.
4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
Once the tribunal rules on its own jurisdiction before issuing the final award, the parties have 30 days to file a petition so the court can determine definitively whether the arbitral tribunal has jurisdiction.
5 The parties
5.1 Are there any restrictions on who can be a party to an arbitration agreement?
The parties to an arbitration agreement must have the capacity to bind themselves to the agreement, as with any other contract.
5.2 Are the parties under any duties in relation to the arbitration?
The Commerce Code does not impose any mandatory duties on the parties in relation to the arbitration.
5.3 Are there any provisions of law which deal with multi-party disputes?
The Commerce Code does not include any provisions on multi-party arbitration disputes.
6 Applicable law issues
6.1 How is the law of the arbitration agreement determined in your jurisdiction?
By party autonomy, given that the Commerce Code does not explicitly state the applicable law to the arbitration agreement. However, Articles 1457 and 1462 can be interpreted to determine that if the parties fail to select an applicable law, Mexican law will govern the arbitration agreement.
6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
Yes; however, if the substantive law is not determined, the arbitral tribunal will determine the applicable law considering the characteristics and relevant connection of the case, in terms of Article 1445 of the Commerce Code.
7 Consolidation and third parties
7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
The Commerce Code does not regulate the consolidation of separate arbitrations. However, the parties may determine in the arbitration agreement the applicability of
7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
The Commerce Code does not regulate the joinder of additional parties to an arbitration.
7.3 Does an arbitration agreement bind assignees or other third parties?
As a general rule, the arbitral tribunal only has jurisdiction over the signatory parties to the arbitration agreement. This principle was recognised by the Mexican courts in the judicial precedent with digital registry: 2021201. However, there have been cases that require further analysis in which a subrogee, heir or assignee has been bound by the arbitration agreement.
8 The tribunal
8.1 How is the tribunal appointed?
The decision as to whether to proceed with a sole arbitrator or a tribunal is at the discretion of the parties.
According to Article 1426 of the Commerce Code, if the parties fail to reach agreement on the matter, a sole arbitrator will be appointed.
If the parties disagree on the sole arbitrator, the court will make the appointment.
If the parties decide on a tribunal, the third arbitrator will be appointed by the two other arbitrators. If they fail to agree on the presiding arbitrator, the court will make the appointment. The local court may also appoint a party arbitrator if that party fails to appoint one.
8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
There are no legal requirements that a person must fulfil in order to be appointed as an arbitrator, unless the parties have specified certain qualifications in the arbitration agreement.
8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
An arbitrator may be challenged if:
- Their independence and impartiality are justifiably put in doubt; or
- They lack the qualifications agreed by the parties.
The party that challenges the arbitrator has 15 days to present a written submission after learning of:
- The tribunal's constitution; or
- Any events that raise concerns regarding the arbitrator's:
-
- Independence;
- Impartiality; or
- Lack of qualifications.
If the challenge is rejected and the arbitrator does not resign, the interested party has 30 days to file a request in court.
8.4 If a challenge is successful, how is the arbitrator replaced?
The arbitrator will be replaced by a substitute who will be appointed in accordance with the same procedure provided for in Article 1431 of the Commerce Code.
8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?
Arbitrators' obligations include the following:
- To disclose any circumstances that may give rise to justifiable doubts as to their independence or impartiality in terms of Article 1428 of the Commerce Code;
- To decide on the issues raised by the parties in accordance with the applicable law pursuant to Article 1445 of the Commerce Code; and
- To issue a reasoned award, unless otherwise agreed by the parties, which is in writing and signed by them in accordance with Article 1448 of the Commerce Code.
8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
(a) Procedure, including evidence?
An arbitrator has the power to:
- Decide on their jurisdiction in terms of Article 1432 of the Commerce Code; and
- Determine the manner in which the procedure will be handled, including the admissibility, relevance and weight of any evidence, per Article 1435.
(b) Interim relief?
Arbitrators can grant interim measures, unless otherwise provided in terms of Article 1433 of the Commerce Code. Given that arbitrators lack imperium, if a measure is not voluntarily complied with, a court may enforce it.
(c) Parties which do not comply with their orders?
No provision in the Commerce Code grants the arbitral tribunal the power to sanction a party. However, it is generally accepted that the only tool that arbitrators possess to enforce their decisions is adverse inference.
(d) Issuing partial final awards?
In the judicial precedent with digital registry 162029, the court recognised the power of the tribunal to issue partial final awards in terms of Article 1432 of the Commerce Code.
(e) The remedies they can grant in a final award?
The tribunal may grant any remedies available under the substantive law applicable to the dispute.
(f) Interest?
Book 5, Title 4 of the Commerce Code does not address the imposition of interest; this will depend on the law applicable to the substance of the dispute.
8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
Unless otherwise agreed by the parties, the arbitral tribunal will continue with the proceedings without the non-participating party in terms of Article 1441, Sections II and III of the Commerce Code.
8.8 Are arbitrators immune from liability?
No, Article 1480 of the Commerce Code states that the arbitral tribunal is liable for any damage caused by interim measures.
9 The role of the court during an arbitration
9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
The local court will remit a case to arbitration at the request of a party if there is an arbitration agreement, unless:
- It is proven that the agreement was declared null or void through a binding judgment; or
- The agreement is manifestly:
-
- Null;
- Void;
- Inoperative; or
- Impossible of being performed.
9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
The Commerce Code follows the principle of no court intervention, except in matters provided for by law.
The following rules apply to arbitrations seated in Mexico:
- The courts can aid in the appointment of arbitrators.
- The courts can answer consultations on the tribunal's fees.
- The courts can resolve a challenge against an arbitrator.
- The courts can review the tribunal's competence where this has not been determined in the final award.
- The courts can aid in the taking of evidence.
- The courts will decide on the setting aside of the award.
The following rules apply to arbitrations seated outside Mexico:
- The parties may request interim measures before or during the arbitral proceedings, pursuant to Article 1415 of the Commerce Code.
- The courts can enforce interim measures granted by a tribunal seated abroad.
- The courts will remit a case to arbitration if there is an arbitration clause.
- The courts will decide on the recognition and enforcement of an arbitral award.
9.3 Can the parties exclude the court's powers by agreement?
This issue is not expressly regulated in the Commerce Code; however, since these are rules of public order, they generally may not be waived.
10 Costs
10.1 How will the tribunal approach the issue of costs?
According to Article 1455 of the Commerce Code, costs will be borne by the losing party. However, the tribunal may distribute the costs between the parties on a pro rata basis, taking into account the particular circumstances of the case.
10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
Parties can determine the terms of the costs; if they fail to do so, the Commerce Code will apply (Article 1416, Section IV).
11 Funding
11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?
The Commerce Code does not regulate third-party funding.
12 Award
12.1 What procedural and substantive requirements must be met by an award?
The award must comply with the following requirements:
- It must be made in writing and signed by the arbitrator. If there is an arbitral tribunal, the award requires:
-
- The inclusion of a majority of the members' signatures; and
- An explanation of the reasons why some signatures were omitted.
- It must establish the reasons for the award, unless the parties have agreed otherwise.
- It must state the date of the award and the seat.
- A signed copy must be delivered to the parties by the arbitrators.
12.2 Must the award be produced within a certain timeframe?
The Commerce Code does not specify a timeframe in which the award must be delivered.
13 Enforcement of awards
13.1 Are awards enforced in your jurisdiction? Under what procedure?
The Commerce Code establishes the framework for the recognition and enforcement of arbitral awards in Mexico in terms of the special procedure set forth in Articles 1472 to 1476.
Article 1422 states that the party enforcing the award may choose from either state or federal first-instance courts at the place:
- Of the domicile of the party against which enforcement of the award is sought; or
- Where the assets to be seized are located.
The plaintiff must:
- File the application in writing; and
- Attach:
-
- The original authenticated award or a certified copy thereof; and
- The original or a certified copy of the arbitration agreement in terms of Article 1461.
If the award or the arbitration agreement was executed in a foreign language, the plaintiff must also attach a translation, given that all documents submitted to the Mexican courts must be in Spanish. The respondent can resist enforcement only on the grounds established in Article 1462, which are limited and similar to the grounds for nullity.
Pursuant to Article 1476 of the Commerce Code, the parties cannot appeal the decision issued in the special process to request recognition and enforcement. However, the losing party may file a constitutional proceeding, known as an 'indirect amparo'.
14 Grounds for challenging an award
14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
Article 1457 of the Commerce Code sets out the grounds to set aside an award, as follows:
- One of the parties lacked the capacity to execute the arbitration agreement or the arbitration agreement is invalid.
- The parties were not duly notified of the appointment of an arbitrator or of the arbitral proceedings and did not have the opportunity to assert their rights.
- The tribunal resolved a matter that exceeded the terms of the arbitration agreement.
- The composition of the tribunal or the conduct of the proceedings did not accord with the terms of the agreement.
- The subject matter of the dispute is not arbitrable or the award goes against matters of public policy.
The first four grounds for setting aside an award require proof by the plaintiff, while the last one must be reviewed ex officio by the court.
14.2 Are there are any time limits and/or other requirements to bring a challenge?
Yes, the request to set aside an award must be filed within three months of notification of the award.
14.3 Are parties permitted to exclude any rights of challenge or appeal?
No case law addresses this issue; however, it could be argued that the parties may exclude the grounds to challenge an award contemplated in Article 1457(I) of the Commerce Code but not those contemplated in Article 1457(II), given that their analysis is ex officio.
15 Confidentiality
15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
The Commerce Code does not establish that arbitrations are confidential; therefore, the parties must include a clause to this effect in the arbitration agreement.
15.2 Are there any exceptions to confidentiality?
N/A.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
