Commercial Law in Mexico

Marco Tulio Venegas - Von Wobeser y Sierra SC

The main characteristic of the Commercial Law that distinguishes it from others branches of law is its dynamism, which is a result of its sphere of regulation defined in article 75 of the Mexican Commerce Code as the resolution of disputes arising from commercial acts or when one of the parties is a merchant, which refers to a person who is engaged in some commercial transaction.

Therefore, since the sphere of regulation is in constant evolution, the law governing it must be constantly updated to reflect the changing circumstances that generate new types of commercial transactions subject to regulation.

In Mexico the Commerce Code dates from 1890, but it has suffered almost since its issuance a phenomenon known as decoding, as a result of the specialisation and diversification of laws in commercial matters, which involves the creation of new specific laws that regulate specific commercial matters, such as the General Law of Negotiable Instruments and Credit Operations issued in 1932 and the Law of Business Corporations issued in 1934. This decoding, along with amendments to the existing laws, is how Commercial Law in Mexico is kept current and up-to-date.

Another important characteristic of the Commercial Law in Mexico is that, unlike some other countries, commercial matters in Mexico are distinguished from and governed separately from strictly civil matters (which are considered to include family, property, contract, tort and inheritance issues). The Political Constitution of the United Mexican States has established that civil law matters, both substantive and procedural, are of local jurisdiction, which means each state and the Federal District has its own civil code and code of civil procedures (even though there is also a Federal Code of Civil Procedures which applies to the resolution of federal administrative and civil conflicts). Commercial matters, on the other hand, are governed by federal law, which means that commercial matters are regulated in the Commerce Code that applies to the entire country, although the judges that resolve commercial disputes are civil judges, both local and federal.

RELEVANT AMMENDMENTS TO THE COMMERCE CODE DURING THE YEARS 2008 AND 2009

During 2008 and 2009, some important amendments have been made to the Commerce Code in an attempt to update the legal system to ensure an impartial and expeditious enforcement of the law, providing legal certainty and security to its citizens.

The following are the most significant recent changes to the Commerce Code:

•Inclusion of the local codes of civil procedures as supplemental to the Commerce Code, when the matter in question is not regulated in the Federal Code of Civil Procedures.

The purpose of this amendment was to regulate what was actually occurring when a matter was deficiently regulated by the Commerce Code and was not regulated by the Federal Code of Civil Procedures, which consisted of the courts applying the local legislation that regulated such matter. This amendment provides the parties in a commercial dispute greater legal certainty.

•Expansion of the term granted to the defendant for responding to lawsuits to 15 working days (formerly nine) in an ordinary proceeding and eight working days (formerly five) in a summary proceeding.

This amendment addresses the principle of “procedural equity between the parties”, providing more time to the parties for structuring their defence.

•Establishing as a general rule that the appellate review will be analysed at the same time as the final resolution and as an exception at the time of the filing of such appeal.

The purpose of this amendment is to provide a more expeditious and transparent procedure by avoiding loss of time in the filing of pre-trial procedures. Before this amendment, all appeals were reviewed at the time of their filing. This amendment consists of creating a new system where the appeal can be processed immediately only in the cases where the law specifically indicates it, when the resolution of such appeal is so important and relevant to the trial that it cannot wait until the final judicial ruling, or because the immediate processing of the appeal will lead to the termination of the trial at that moment or when the appeal is directed to a provisional remedy.

•Subjecting legal representatives and paralegals to the rules of civil liability in terms of the Federal Civil Code.

The objective of this amendment was to make previous changes in the regulations consistent. The 2000 reform separating the Civil Code of the Federal District from the Federal Civil Code had left legal representatives and paralegals subject to the Civil Code of the Federal District, and the recent amendments correct this oversight. The effect of this amendment is to extend the circumstances of liability for the legal representatives and paralegals and to make the application of this rule consistent with the Mexican legal system.

•Establishing new conditions for the offering of testimonial and expert evidence.

This amendment is intended to reinforce the constitutional rights related to due process and the fair application of the law. The conditions established by this amendment consist of the following actions, among others:

•Attach to the writ where the experts accept their appointment and attest to the truth of their testimony, the original or a certified copy of their professional licence or documents that prove they are an expert in the indicated area.

•The sanctions to be applied if such documents are not attached to the writ are specified.

•The consequences of not presenting the above-mentioned writ are specified.

•The consequences of not presenting the statement of the expert in the form and within the time period allowed is specified.

•The term “Offerers of the evidence” is changed to “Parties”, because the obligation to offer evidence applies to both parties and not just the offerer.

•In the testimonial evidence the questions asked by the other party should be filed in a closed envelope.

•Establishing a minimum amount in commercial trials for a party to be able to file an appeal; the amount determined was 200,000 Mexican pesos, which must be updated annually according to the National Consumer Price Index (Indice Nacional de Precios al Consumidor).

The objective of this amendment was to fix a specific amount for the filing of appeals. This amendment was one of the measures adopted in order to avoid confusion between the requirements for filing an appeal and the requirements for filing claims in commercial matters. In this case the amount to file appeals is expressly determined so that the parties in a dispute will not confuse that amount, which prior to the amendment was not defined, with the amount required for filing claims. Another main point of this amendment was to establish the obligation of the Federal Judicial Council and the presidents of the Federal and Local Superior Courts of Justice to give notice to the different courts of their jurisdiction of the annual updating factor of the above-mentioned amount.

•Expanding the admission of appellate reviews regarding provisional remedies.

Provisional remedies are contemplated in legal systems in order to ensure a fundamental principle of law: justice. Although it is important to provide provisional remedies in a legal system in order to maintain the object in dispute alive during a trial, it is also true that sometimes such provisional remedies are used only to abuse that principle.

With this amendment when an appellant considers that the ruling that provides for the provisional remedy violates judicial procedure, it can appeal such ruling without expressing the grievances at the time of the admission of such appeal, but will need to express such grievances together with the grievances against the final judicial ruling when that is issued.

•To promote arbitration as an alternative means for private parties to resolve disputes.

Prior to this amendment the Fourth Part of the Commerce Code regulated the circumstances under which arbitration is appropriate in commercial matters, and also regulated the national and international arbitration procedures regarding a single part or the whole dispute in commercial matters. This amendment was needed in order to correct the deficiencies in commercial arbitration regulation, consisting mainly in its lack of diffusion as an alternative means of resolving disputes and uncertainty regarding its effectiveness and efficiency, which is reflected in the large caseload in the Mexican commercial courts and in the delay of these courts in resolving judicial disputes.

This amendment attempts to expand the use of arbitration for resolving judicial by spreading its benefits, such as: the rapidity and certainty of its awards which are not subject to appeal; that it has the same legal force as a judicial resolution; it can be enforced internationally; and that the arbitration procedure is less expensive than the common judicial procedure.

•Specifying the documents and actions that need to be registered in the electronic folio of the Public Commercial Registry.

This reform attempts to establish better control of properties and assets. Its main objective is to determine which acts of corporations must be registered. Before this amendment such acts were not specified. Now, for example, with this amendment it is specified that it is not necessary to register the reduction of the variable capital, the granting of a special power of attorney or the granting of a general power of attorney in civil matters.

***

The above-mentioned amendments to the Commerce Code were the response to recurring complaints of Mexican society which demanded expeditious and fair trials that satisfied their needs. Therefore, with these amendments Mexico is attempting to provide greater certainty, integrity and consistency in judicial resolution of disputes. Mexico took a big step in its commercial and procedural law towards creating a legal system that promotes equal treatment of the parties in a dispute, equity in judicial procedures, and fair and enforceable judicial resolutions, by improving trial procedures guaranteeing citizens, specifically merchants, their rights.

The reform of the Commerce Code enriches and improves the consistency of the Mexican legal system in commercial matters, specifically in the administration of justice, streamlining and adapting the implementation of the procedural law, which is reflected in fairer and more expeditious trials, and as a consequence increases the level of legal certainty and security that is provided to merchants in Mexico. This updating of the Commercial Code allows merchants in Mexico to meet the challenges of global competition and to meet the national objective that Mexico have a more important position in the world and become a country that is a safe place to invest and engage in business because of the effective Commercial Code Mexico has created.

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