A. LEGISLATION AND RULES
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 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 continues to be a party to the ICSID Convention, welcoming foreign investments while allowing foreign investors from countries that are parties to the treaty to access dispute settlement mechanisms in cases of breaches of obligations.
According to the 2024 ICSID Caseload — Statistics, in ICSID cases registered until 30 June 2024, Mexico was the state with the most cases in which they were registered as the respondent. Mexico had nine new cases acting as the respondent party.
In September 2024, Mexican Congress passed a bill that substantially changed the Federal Judicial Branch (“Judicial Branch“), particularly in the way of appointing Supreme Court Justices, Federal Magistrates, and Federal Judges.[1] As a consequence of this bill, all federal judges (including the Supreme Court justices), will be elected through popular vote. In fact, by September 2025, the entire Supreme Court (Mexico’s highest court) will be replaced with 9 new justices; and nearly 900 new federal magistrates and judges (half of the federal judges in the country) will also assume office. The other half will be elected by 2027. Only the candidates approved by the President of the Republic, the Federal Congress, and the Judicial Branch will have the opportunity to run for these seats, and all Mexican citizens registered to vote before the National Election Institute will be able to cast a vote for each of the vacant positions.[2]
This structural change in the Judicial Branch has eroded a portion of the people’s trust in Mexico’s justice system and its independence. This could lead to an increase in arbitration cases (both domestic and international) within the coming years.
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.
Furthermore, most of the major arbitration institutions operate in Mexico. The ICDR and the LCIA are particularly well-known and frequently selected. Mexican practitioners and legal professionals are well-versed in these institutions and their respective regulations. Each arbitration institution possesses its own infrastructure, which is currently being expanded to other major cities within the country, as arbitration increasingly becomes a preferred alternative for dispute resolution.
B. CASES
B.1 Almaden Minerals Ltd. and Almadex Minerals Ltd. v. United Mexican States (ICSID Case No. ARB/24/23)[3]
Almaden and Almadex are Canadian-based exploration companies that focus on the acquisition, exploration, evaluation, and development of mineral properties in Mexico. Both companies are headquartered in Vancouver.
On 14 March 2024, Almaden and Almadex delivered a written notice of its intention to submit a claim to arbitration against Mexico under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Almaden and Almadex claim that Mexico has breached its obligations under the CPTPP through actions which blocked the development of the gold and silver Ixtaca project and retroactively terminated the company’s mineral concessions, causing the loss of the company’s investments in Mexico. The arbitration proceedings are still pending.
B.2 Fotowatio Renewable Ventures S.L.U., FRV Solar Holdings III, S.L.U. and FRV Solar Holdings VI, S.L.U. v. United Mexican States (ICSID Case No. ARB/24/5)[4]
Fotowatio Renewables Ventures and FRV Solar Holdings and ORS are two Spanish companies specializing in the development and operation of solar plants. They are involved in various projects aimed at providing clean and sustainable energy solutions.
On 13 March 2024, the Secretary-General registered the request for the institution of arbitration proceedings from Fotowatio Renewables Ventures and FRV Solar Holdings against Mexico under the BIT Spain – Mexico (2006). There are no further details on the merits of the case.
The tribunal was constituted on 23 July 2024, and the proceedings are still pending.
B.3 AXA, S.A. v. United Mexican States (ICSID Case No. ARB/24/49)[5]
AXA S.A. is a French multinational insurance corporation headquartered in Paris. They are one of the world’s leading insurance and asset management groups, serving 94 million clients in 51 countries.
On 5 December 2024, they filed a request for arbitration against Mexico under the BIT Mexico – France (1998). The case relates to tax treatment, according to ICSID’s website, although further details have not been confirmed. The process is still pending.
B.4 Odyssey Marine Exploration, Inc. v. United Mexican States (ICSID Case No. UNCT/20/1)[6]
Odyssey Marine Exploration is an American corporation, a global leader in deep-ocean survey, scientific investigation, exploration and the development of seabed resources. Odyssey filed its notice of arbitration in April 2019 under NAFTA.
On 17 September 2024, the tribunal rendered its award with a dissenting opinion by arbitrator Phillippe Sands. In essence, the tribunal decided that: (i) Mexico failed to accord Odyssey’s investment fair and equitable treatment under NAFTA article 1105(1); (ii) ordered Mexico to pay the sum of USD 37.1 million and all of the costs of arbitration, including the arbitrators’ fees and ICSID’s administrative fees; (iii) ordered each party to bear its own fees and expenses; and (iv) denied all other claims for compensation.
[1] “DECRETO por el que se reforman, adicionan y derogan diversas disposiciones de la Constitución Política de los Estados Unidos Mexicanos, en materia de reforma del Poder Judicial” https://www.dof.gob.mx/nota_detalle.php?codigo=5738985&fecha=15/09/2024#gsc.tab=0;(September 15, 2024) see also ” DECRETO por el que se expide la Ley Orgánica del Poder Judicial de la Federación”https://dof.gob.mx/nota_detalle.php?codigo=5745906&fecha=20/12/2024#gsc.tab=0; (December 20, 2024)
[2] “DECRETO por el que se reforman y adicionan diversas disposiciones de la Ley General de Instituciones y Procedimientos Electorales, en materia de elección de personas juzgadoras del Poder Judicial de la Federación” https://www.dof.gob.mx/nota_detalle.php?codigo=5741085&fecha=14/10/2024#gsc.tab=0 (October, 14, 2024)
[3] https://www.italaw.com/cases/12208
[4] Fotowatio Renewable Ventures S.L.U., FRV Solar Holdings III, S.L.U. and FRV Solar Holdings VI, S.L.U. v. United Mexican States (ICSID Case No. ARB/24/5) https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/24/5
[5] AXA, S.A. v. United Mexican States (ICSID Case No. ARB/24/49 https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/24/49
[6] Odyssey Marine Exploration, Inc. v. United Mexican States (ICSID Case No. UNCT/20/1) https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=UNCT/20/1
