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A.1       Legislation

International arbitration in Mexico continues to be governed by the Code of Commerce, which incorporates the provisions of the UNCITRAL Model Law of 1985 in its relevant section. The Code of Commerce was enacted in 1889, and its last amendment on arbitration took place in 2010.

Mexico is also a signatory to the New York and Panama Conventions on the enforcement of foreign arbitral awards.

Regarding Investment Arbitration, Mexico is a party to the ICSID Convention, welcoming foreign investments, and also, allowing foreign investors from countries that are parties to the treaty to access dispute settlement mechanisms in case of breaches of obligations.

The head of The Mexican Federal Executive Branch proposed a constitutional reform on the energy sector on 30 September 2021. The reform purportedly seeks to strengthen the Federal Electricity Commission (CFE), a state-owned entity and retain 56% of the market.[1]  The latter could represent violations of International Investment Treaties, like the USMCA.

A.2       Institutions, rules and infrastructure

Some of the most prominent local arbitration institutions in Mexico are the Centro de Arbitraje de México (CAM) and the Cámara Nacional de Comercio de la Ciudad de México (CANACO). There is also a Mexican Chapter of the ICC in Mexico City. The arbitration rules of CANACO have been the same since 2013 for regular proceedings and for expedited arbitrations they have not changed since 2018. The rules of the CAM have not changed since 2009 but reform is expected for next year.

Additionally, most of the major arbitration institutions operate in Mexico. The ICDR and the LCIA are better known and widely chosen. Mexican users and lawyers are familiar with these institutions and their rules. Each arbitration institution has its own infrastructure that is currently expanding to other major cities in the country, as arbitration is more commonly resorted to as an alternative means to resolve disputes.


B.1       Lion Mexico Consolidated L.P. v. United Mexican States (ICSID Case No. ARB(AF)/15/2)

On 11 December 2015, Canadian investor Lion Mexico Consolidated L.P. (LMC) brought arbitration proceedings against Mexico. LMC alleged that it had invested around USD 800 million in beachfront real estate developments. Specifically, two projects – the “Nayarit Project” which consisted in building a resort on Bahía Banderas in front of the ocean and the “Guadalajara Project” which consisted in building two skyscrapers. Both owned by a Mexican businessman Héctor Cárdenas Curiel. LMC made the investment through three payments, each had a promissory note and three mortgages on different properties to secure payment of the investments. The debtor companies defaulted on their obligations and LMC demanded payment. Again, the debtors failed to pay and LMC initiated proceedings to foreclose on the mortgages.

Later on, LMC became aware that the mortgages had been canceled through a judgment issued by the Ninth Commercial Judge of the First Judicial District of the State of Jalisco, which declared the loans liquidated and determined that the promissory notes and mortgages were canceled. This order was executed by the Public Registry of Property. However, LMC did not have the opportunity to defend itself in the lawsuit since it was never even notified. After becoming aware of the situation, LMC filed an amparo indirecto for the lack of notice, however, the district judge determined that LMC had been properly summoned but had not appeared or defended itself and therefore rejected the claim. LMC also filed a criminal complaint against Mr. Cárdenas, the prosecutor’s office initiated a criminal action but the judge dismissed the proceeding without analyzing the merits of the case.

For all of the above, LMC alleged that it was totally ignored by the courts and that since it was deprived of obtaining such promissory notes and mortgages, an illegal expropriation had been caused through irregular procedures that were not even notified. Specifically, LMC argued before the ICSID that the right to compensation for expropriation was violated.[2]  It also argued that the fair, equitable treatment and denial of justice standards were breached.[3]  About what has been stated, the arbitral tribunal decided that Mexico had indeed violated its treaty obligations regarding fair and equitable treatment since Mexico denied access to justice[4] and determined that LMC should be compensated for USD 47 million and that the costs of the arbitration should be pursued by the event and therefore paid by the respondent and that Mexico should reimburse LMC for the totality of the costs incurred by LMC.

Recently, México asked a US court to vacate the USD 47 million award, claiming that the arbitral tribunal exceeded its authority and that the award was unreasonable and unjustified.[5]

B.2      If a party invokes foreign law it has the burden of proving its existence and applicability           

The Mexican Commercial Code clearly states that whoever invokes foreign dispositions must prove their existence and applicability to the case at hand. In that sense, a Collegiate Circuit Court stated that if an arbitral proceeding is being conducted under Mexican law and one party refers to a foreign law has the duty to prove the existence and applicability of the law rests on the party citing the provision and not on the arbitrator. The fact that the arbitrator does not have this duty does not imply the violation of any fundamental right such as the right of access to justice and therefore the claim of the award annulment was dismissed.

Also, the Collegiate Circuit Court dismissed the annulment proceeding considering correct the assessment that the arbitrator made when deciding that she did not have the powers to declare void a public deed, since the law states that the only way to annul a public deed is through an enforceable judicial sentence according to the article 114 of the Notary Law of the State of Mexico.[6]

 B.3      PACC Offshore Services Holdings v. United Mexican States

On 4 May 2018, PACC Offshore Services Holding (POSH) submitted a notice of arbitration against Mexico. POSH argued that Mexico had violated the Bilateral Investment Treaty between Singapore and Mexico. The arbitral tribunal found that Mexico had arbitrarily confiscated some of POSH’s vessels during a criminal investigation involving POSH’s subsidiary, Oceanografía.[7] Thus, the Tribunal held that Mexico had violated the treaty and ordered it to pay damages to compensate POSH.

 [1] “Reform initiative presented to strengthen CFE and lithium protection“, October, 1, 2021,

[2] NAFTA; Art. 1110.

[3] NAFTA; Art. 1105.

[4] ICSID Case No. ARB(AF)/15/2; Award ¶ 824.

[5] “Mexico challenges NAFTA denial of justice award”, 08 December 2021;

[6] Thesis I.3o.C.121 K (10a.) of the Collegiate Circuit Courts, published in the weekly Gazette of the Federal Judiciary on January 2022 named under: “Action for Annulment of Arbitral Award. Even if the National Law is Not Subject of Proof, If Either Party Invokes a Foreign Law, It Has the Burden of Proving Its Existence, As Well As Its Applicability to the Case, Without Such Duty Falling On the Arbitrator.” And ” Action for Annulment of Arbitration Award. Arbitrators Lack Powers to Declare a Public Deed Null and Void (Legislation of the State of Mexico).”

[7] “Mexico liable over vessels seized in fraud probe“, January 12th, 2022;


Alfonso Cortez-Fernandez is a partner in Baker McKenzie's Monterrey office, a member of the litigation and Government Enforcement Steering Committee for North America and the chair of that practice at the five Mexican offices. Alfonso has been acknowledged by Chambers & Partners from 2016 to 2021. Best Lawyers have recognized him as "one of the best lawyers in commercial litigation in Monterrey." He specializes in domestic litigation and arbitration proceedings. Alfonso advises on alternative means of dispute resolution and handles litigation in the areas of insolvency, civil, commercial, real estate and constitutional law.


Francisco Franco is an associate in Baker & McKenzie’s Mexico City office. His practice focuses on international investment and commercial arbitration. He has represented states and corporations in complex international arbitrations under various rules, including: ICC, LCIA, ICSID and UNCITRAL. Francisco is admitted to practice law in Mexico and New York. Before joining Baker McKenzie in Mexico City, Francisco worked for top tier international arbitration firms in Paris, London and New York.