The Supreme Court has reviewed the power of judges regarding arbitration procedures and arbitral awards issued under the terms of the Commerce Code, and the effects of resolutions ex aequo et bono or as amiable compositeur (ie, based on what is fair and just, rather than on the letter of the law). However, the court's arguments regarding resolutions ex aequo et bono have met with some criticism.
A Mexican court's annulment of a final arbitral award - which had granted around $400 million in damages to a company in dispute with the government agency Pemex - has become a highly controversial issue. This approach to arbitration puts future and current investments at risk, as a result of the lack of legal commitment and security that government agencies may be seen to offer.
The amendments to the International Chamber of Commerce Arbitration Rules finally measure up to international practice in jurisdictions such as Mexico, where the arbitration rules of the main local arbitral institutions had already included provisions for appointing emergency arbitrators and seeking interim relief.
The Law for the Protection and Promotion of Fair Business Practices was recently introduced to the legislative body. Unfortunately, the chapter on dispute settlement disregards the general principles of mediation. In particular, imposing a penalty on parties that fail to participate in an initial dispute resolution meeting contradicts the idea that mediation is a voluntary procedure.
Recent Commerce Code changes provide that an arbitral tribunal and a requesting party are liable for interim measures and any damages that such measures may cause to the other party. It has been argued that this will deter tribunals from granting interim measures. However, in practice an arbitral tribunal has a range of arguments at its disposal that may limit or exclude its liability.
The US Federal Aviation Administration has decided to restore Mexico's top safety category earlier that expected. All Mexican carriers can resume their plans for establishing new services to the United States or code sharing with their strategic partners. Moreover, a new group of investors and an agreement with trade unions have improved the chances of troubled airline Mexicana resuming operations.
The government faces one of the most challenging periods in the history of Mexican civil aviation. The Mexicana de Aviación debt reorganisation procedure and the downgrading of the Mexican General Directorate of Civil Aeronautics by the US Federal Aviation Administration have forced a reconsideration of the country's civil aviation policy. How can the authorities address the problems and strengthen the industry?
In 2007 Mexico and the United States signed a bilateral aviation safety agreement, allowing for the mutual acknowledgment of certification standards set by the US Federal Aviation Administration and the Mexican Civil Aeronautical General Directorate. As a result, certification procedures have improved for the wide range of aeronautical product components that are now produced in Mexico.
The Ministry of Communications and Transport has signed an agreement with the aviation authorities of Honduras, El Salvador and Guatemala to facilitate air transport services. The agreement will allow Mexican carriers to operate between a wider range of destinations and is intended to encourage tourism within the region.
An amendment to the regulations on the instruments, equipment, documents and manuals that an air carrier operating domestically or internationally into Mexico must keep onboard its aircraft postpones the requirement to carry dual-frequency Emergency Locator Transmitter equipment until mid-2008.
Many loans involve the transfer of assets to a collateral or payment-source trust, especially (but not exclusively) when dealing with cash-generating assets, such as long-term contracts or receivables. A 2016 federal collegiate circuit court decision could jeopardise these structures in the context of insolvency proceedings. However, new judicial guidance was recently issued to reinforce traditional considerations regarding trusts.
Andrés Manuel López Obrador was elected president on 1 July 2018 and will take office on 1 December 2018. Not only did López Obrador obtain more than 50% of the votes (approximately 30 million), his party and coalition also won an absolute majority in both the House of Representatives and the Senate. This is the first time in 20 years that a president will govern with this level of power. But what will this mean for the banking sector?
The funds of some participants of the Interbank Electronic Payments System (SPEI) were recently affected by a series of unprecedented cyberattacks. The Mexican Central Bank revealed that approximately $15 million (Ps300 million) had been involved in diverse irregular transfers, subject to investigation. The cybercriminals had identified a flaw in the system that permitted receivers of SPEI transfers to withdraw cash almost immediately after receiving the transfer so that the money could not be traced.
The president recently enacted the Financial Technology Institutions Law. The Senate had unanimously approved the bill on the law in December 2017 and sent it to Congress, which made no changes. The law seeks to build a regulatory framework that will encourage the development of innovative financial services, increase the level of competition and financial inclusion and place Mexico at the forefront of the industry.
There were a number of court precedents in 2017 concerning financial transactions. For example, a recent non-binding collegiate court precedent broadened the scope and source of information that judges should use to analyse and determine the existence of usury, while another validated judges' authority to use the annual interest rate published by companies that engage in vehicle financing. Further, a binding Supreme Court precedent dealt with the maturity date of promissory notes.
The Federal Competition Law provides that a resolution granting a leniency applicant the maximum reduction in a fine for cartel activities cannot be contested through administrative or judicial procedures. However, the wording of the provision is confusing and some commentators have sought to interpret it as offering immunity from civil claims by third parties for damages and lost profits.
The Federal Competition Law provides that filing thresholds for transactions are calculated annually on the basis of the general minimum daily wage in Mexico City. In 2010 the filing thresholds are 4.85% higher, as the general minimum daily wage has been increased.
The federal courts have offered guidance on when an economic group can be considered a single economic agent. The 'economic group' concept provides that group members are jointly liable for illegal practices. However, the Federal Competition Commission has also sought to use the principle as a basis for requesting information from an entity in Mexico about other entities in its international group.
The Federal Competition Law and its regulations make provision for reductions in fines for cartel participants that come forward with information about such practices. The commission has indicated that it may fine a cartel participant the equivalent of the daily minimum wage - a negligible amount, given that the commission has the authority to impose a fine of up to 1.5 million times this amount.
The public and private sectors have expressed their desire to increase competition in the Mexican economy. In order to do so, the powers of the Federal Competition Commission need to be strengthened. Therefore, Senator Santiago Creel has presented a proposal to amend the Federal Law of Economic Competition.
Foreign entities from the 158 member countries of the World Trade Organisation that wish to carry out commercial activities in Mexico can now benefit from a simplified process to establish a branch or agency in the country. The simplified procedure is also available to civil entities that do not carry out business activities.
One of the decisions that an investor must make is to choose the form of company through which it will do business in Mexico. A decisive factor in choosing a form of company is often the liability that its members may incur. Another significant issue is whether the members of the company can compete with the company's business.
Following a common international trend, the Senate has approved a bill that authorises the formation of stock corporations and limited liability companies with a single shareholder or member. The bill indicates some of the advantages for small businesses, which can limit the liability of their members and deal with public entities that are required to contract with companies rather than individuals.
Mexico City's legislative assembly has approved amendments to the Civil Code of the Federal District on contracts. Conceived as a response to the economic crisis, they provide that if an exceptional and unexpected event on a national scale has the effect of making one party's obligations more onerous, that party may request modification or recission of the agreement.
Mexican law requires that Mexican corporations have no fewer than two shareholders or partners. If a new proposal to allow the existence of single shareholder corporations is approved by Congress, Mexican and foreign investors will not be required to have two buyers when acquiring an existing company or creating a new one.