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.
In recent years, Mexico has been rated as having one of the highest rates of credit card fraud in the world. The National Banking and Securities Commission recently published the Resolutions that Modify the General Rules Applicable to Credit Institutions, which require credit institutions to verify information and documentation filed by users and customers with different government bodies in order to assure the identity of each prospective customer.
The recently published draft Financial Technology Law will regulate the organisation, operation, function and authorisation of companies that offer alternative means of access to finance and investment, the issuance and management of electronic payment funds and the exchange of virtual assets or cryptocurrencies. Among other things, the initative aims to take advantage of the opportunity to expand the financial market to include segments not covered by traditional banking institutions.
President Enrique Peña Nieto recently presented the Financial Reform Bill to Congress. The government stated that the bill would encourage the country's development banking system to lend more actively. At the same time, the government proposes to reduce the cost of borrowing by promoting greater competition among the largely foreign-owned banks.
An executive order promulgating the Federal Act to Prevent and Identify Illegally Funded Transactions was recently published in the Federal Official Gazette. The purpose of the act is to detect and investigate activities and transactions involving resources that have been illegally obtained.
One of the main purposes of the Basel III agreement is to improve the regulatory framework of banks and strengthen the global financial system. Although Basel III will not become effective until 2013, Mexico intends to implement its guidelines during the second semester of 2012. This is largely due to the favourable conditions prevailing in the Mexican banking system.
A real estate investment trust ('FIBRA' in Spanish) is a real estate investment vehicle that can be managed through a stock exchange trust. Three FIBRAs are currently listed on the Mexican Stock Exchange; the outlook for further FIBRA development in Mexico is highly favourable, due to increased interest from both domestic and foreign investors seeking to diversify their portfolio risks.
The investment regime has been modified for Mexican investment companies specializing in pension funds, known as sociedades de inversión especializada en fondos para el retiro (SIEFOREs). The changes create a new form of trust securities certificate, allow SIEFOREs to invest directly in individual shares of companies on the Mexican Stock Exchange and change the calculation of a SIEFORE's value-at-risk.
Mexico's Securities Market Law seeks to facilitate access to the securities market for medium-sized companies or corporations by encouraging them to adopt sound corporate practices, including measures to protect the rights of minority shareholders.
The new Securities Market Law, due to come into effect on June 28 2006, provides corporate governance provisions applicable to investment promoting corporations with regard to, for instance, the board of directors and disclosure to shareholders. Investment promoting corporations grant increased protection to minority shareholders and reflect an advance in good corporate practices.
The Mexican Congress has passed the new Securities Market Law. The Chamber of Deputies made several amendments to the Securities Market Bill and returned it to the Senate, where it was approved. The amendments increased the level of uncertainty over the bill, and this uncertainty continues to surround the new Securities Market Law.
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.