Mexico updates

Arbitration & ADR

Contributed by Becerril Coca & Becerril SC
When can an arbitration tribunal's competence be challenged?
  • Mexico
  • 10 December 2020

By signing an arbitration clause, the parties to the arbitration agreement freely and voluntarily grant an arbitrator or arbitration tribunal full and sufficient competence to resolve conflicts that might arise between said parties due to the execution of a commercial contract. The parties' choice of arbitrator is crucial because the validity and soundness of the final arbitration resolution will depend on their experience.

Tribunal dismisses all of investor's claims under NAFTA and orders him to pay more than $2 million in costs
  • Mexico
  • 17 September 2020

In 2016 Joshua Dean Nelson commenced arbitration against Mexico on behalf of Telefacil México, SA de CV and himself under the North American Free Trade Agreement (NAFTA). According to Nelson, the Federal Telecommunications Institute had prevented him from participating in the telecoms market by issuing measures that he alleged violated Chapter 11 of NAFTA. However, the tribunal recently rejected the claims and held that Telefacil owed Mexico $2.05 million in arbitration costs.

Positive aspects of arbitration during COVID-19 crisis
  • Mexico
  • 18 June 2020

Since 11 March 2020 dispute resolution in Mexico has been significantly affected due to the COVID-19 crisis. In such exceptional circumstances, alternative dispute resolution has taken on greater importance, as it offers parties the chance to continue proceedings (with restrictions) as efficiently as possible without having to wait for the judicial branch to resume operations.

ADR: pros and cons
  • Mexico
  • 19 March 2020

Over the past three decades, alternative dispute resolution (ADR) has increased in popularity to the point that most parties appear to prefer it to having the courts resolve their conflicts. The benefits of ADR are flexibility, reduced costs and the opportunity to actively participate in the resolution of the dispute. However, these benefits depend on the parties voluntarily honouring the commitments adopted during the ADR proceedings.

Use of precautionary measures in arbitration
  • Mexico
  • 30 January 2020

Precautionary measures are an essential way in which to preserve assets that are subject to dispute or ensure that a final award is enforceable. Arbitration offers many advantages over judicial proceedings. However, in practice, such measures need to be issued more quickly in order to achieve the objectives for which they are designed. Notably, under Mexican law, such measures are issued much faster and more effectively than those issued under the International Chamber of Commerce arbitration rules.

Banking & Financial Services

Supreme Court strengthens interest rate rules
  • Mexico
  • 20 September 2019

The Mexican courts have issued several precedents to eradicate the existence of usury, allowing judges to discretionally reduce interest rates agreed by the parties. However, some of these precedents contradict each other as to whether the usury prohibition applies to default interest. As such, the First Chamber of the Supreme Court recently issued a decision to clarify these inconsistencies.

Cashless money transactions – Mexico's new payment method
  • Mexico
  • 19 July 2019

Digital collection (CoDi) is the latest electronic payment method developed by the Mexican Central Bank, designed to reduce the use of cash and promote competition, while incorporating larger sections of the population into the formal financial sector. It seems that Mexico is moving forward in financial technologies, such as CoDi, and using these developments to promote larger inclusion, competition and transparency for every sector in the country.

Competition & Antitrust

Contributed by SAI Law & Economics
COFECE releases market study on food and beverage sector
  • Mexico
  • 10 December 2020

The Federal Economic Competition Commission (COFECE) recently released a market study on the food and beverage sector (specifically, focusing on the 'modern channel' – that is, self-service stores). Through the study, COFECE noted that few self-service chains have a national presence, warned of regulatory barriers that harm competitive conditions and favour market concentration and issued recommendations to address these identified problems.

Amparo actions against CENACE act's impact on competition in electricity industry
  • Mexico
  • 08 October 2020

Many renewable energy investors have challenged the National Energy Control Centre (CENACE) act before the constitutional courts through various amparo actions. Moreover, the Federal Economic Competition Commission has held that the CENACE act affects competition in the electricity industry by indirectly denying solar and wind power plants the possibility of beginning operations and favouring the dispatch of energy from conventional power plants.

COFECE penalises cartel in public procurement for health sector: integral services for laboratory studies and blood bank
  • Mexico
  • 27 August 2020

The Federal Economic Competition Commission (COFECE) recently issued a press release informing that 11 companies and 14 individuals had established a non-aggression pact in order to distribute items from seven tenders previously called by the Mexican Institute of Social Security and the Institute of Security and Social Services of State Workers. The applicable fine was the highest that COFECE has imposed in the past 10 years for cases relating to public procurement in the health sector.

Three for one: austerity initiative to blend regulatory and antitrust institutions
  • Mexico
  • 16 July 2020

Senator Ricardo Monreal of the National Regeneration Party recently presented a reform initiative to amend Articles 27 and 28 of the Constitution to join (and extinguish) three state organs which he believes share certain powers and competencies – namely, the Federal Economic Competition Commission, the Federal Telecommunications Institute and the Energy Regulatory Commission. The resulting organ would be the National Institute of Markets and Competition for Welfare.

COFECE deemed to have jurisdiction to review Uber-Cornershop merger
  • Mexico
  • 25 June 2020

In November 2019 the Federal Economic Competition Commission (COFECE) and the Federal Telecommunications Institute asked the First Collegiate Court Specialised in Economic Competition, Broadcasting and Telecommunications to determine which authority has jurisdiction to review the merger of Uber and Cornershop. After a long procedure and delays owing to the COVID-19 pandemic, the specialised court recently ruled in favour of COFECE.

Employment & Immigration

Contributed by Creel, Garcia-Cuellar, Aiza y Enriquez, SC
Remote working reform enters into force
  • Mexico
  • 03 March 2021

An amendment to the Federal Labour Law was recently published in the Federal Official Gazette, regulating employment relationships under the modality of remote working. This article answers employers' and employees' questions on the reform, including with regard to the definition of 'remote working', employers' special obligations with respect to remote workers and the introduction of flexible working hours for remote workers.

New criteria for vulnerable individuals to return to work amid COVID-19 pandemic
  • Mexico
  • 07 October 2020

Mexico has recently issued a wide range of regulations to contain the COVID-19 pandemic and protect public health. Notably, the Federal Health Ministry and the Mexican Social Security Institute have issued special restrictions and recommendations with regard to the return to work of individuals classified as part of vulnerable groups, who, due to pre-existing conditions or illnesses, are at a greater risk of complications or even death if they contract COVID-19.

COVID-19 FAQs: are you up to date with your obligations?
  • Mexico
  • 19 August 2020

With the COVID-19 pandemic continuing to affect every aspect of life, employers must ensure that they are up to date with their obligations towards employees. This article answers employers' FAQs, including with regard to the financial support available to employees, the measures introduced to facilitate remote working, the processes for implementing dismissals during the pandemic and employers' obligations in terms of health and safety during the return to work.

2019 in employment law and what to expect in 2020
  • Mexico
  • 15 April 2020

As a result of the negotiations of the US-Mexico-Canada Agreement and the amendment to the Constitution on 1 May 2019, a decree amending, supplementing and derogating from several provisions of the Federal Labour Law on labour justice, freedom of association and collective bargaining was published in the Federal Official Gazette. This article highlights changes that employers should expect to come into force in 2020.

Energy & Natural Resources

Contributed by Ramos, Ripoll & Schuster
What's next for Hydrocarbons Law reforms?
  • Mexico
  • 31 May 2021

Since the commencement of the current federal administration, there have been clear signs that Mexico's energy policy will undergo a radical change of focus to restore the dominance of the state energy companies instead of developing the liberalised energy markets implemented in the 2013 energy reform. During the past year, the power sector has received the most attention in this regard. However, in recent months, the oil sector has regained the administration's focus.

Power market war and outlook for 2021
  • Mexico
  • 22 February 2021

The year 2020 was one of conflict for the Mexican power sector. This article summarises the government's main attempts to undermine the electricity market's competitiveness in favour of the Federal Commission of Electricity, the status of said actions, the new law reform initiative and expectations for the Mexican electricity market in 2021.

Green CUFIN: tax incentive for renewable generation companies
  • Mexico
  • 26 October 2020

Green Net Tax Profit Accounts (CUFINs) were established in 2016 as a double tax incentive. The effect of a Green CUFIN is deferral of income tax payment at the corporate level while the shareholders anticipate the benefits of their participation in the entity. This is a valuable incentive for power generation companies and its requirements can be easily complied with through an adequate corporate structure.

Counter-reform: latest developments in battle that has become war
  • Mexico
  • 28 September 2020

The new federal government has taken many actions in an effort to prioritise the Federal Commission of Electricity, Mexico's state-owned power company, over other participants in the open electricity market implemented by the 2013 to 2014 energy reform. Now, despite multiple promises from the president that Mexico's energy legislation would not be reformed, his party has announced a legislative plan to embark on a new energy reform.

Crowdfunding as an investment and alternative financing tool for energy projects
  • Mexico
  • 03 August 2020

Due to the excessive exploitation of finite resources such as coal and oil, alternative sources of renewable energy are required to satisfy the high demand for energy. However, the creation and use of alternative sources of renewable energy require significant investment, which has become a major obstacle. Against this background, crowdfunding platforms have become an excellent financing option to develop projects focused on generating alternative energy.