Conflict resolution

The court system in Mexico is divided into two tiers: federal and local courts. Both federal and local courts are divided according to the nature of the cases they resolve. In federal cases they are categorised into civil, administrative, labour and criminal courts. In local cases, there are civil, family, criminal and labour courts.

Federal courts resolve all the issues that are of federal nature or when the government, acting as an authority, is involved. Commercial matters can be heard by either the federal or local courts. Court procedures go through five main steps. In order these are the lawsuit, answer to the lawsuit, evidence period, allegations, and final judgment. The rules governing the court procedure are different from one state to another, and also according to the nature of the conflict.

Commercial proceedings take place when the basis of the claim has a commercial nature or when one of the parties is a merchant. The Commerce Code establishes the rules for commercial proceedings. The Commerce Code regulates three different types of proceedings: ordinary proceedings, executive proceedings and special proceedings, each one of them having their different set of rules.

Ordinary proceedings

Commercial proceedings begin with a lawsuit. After the lawsuit is accepted by the court, the court orders the serving of a summons to the defendant and grants the defendant a period of 15 days to answer the lawsuit, oppose exceptions and defences, and file a counterclaim (if appropriate). After the lawsuit is answered, if the defendant counterclaimed, the court gives the defendant in the counterclaim nine days to answer the counterclaim. In any case, claim or counterclaim, the court grants the plaintiff three days in order to determine what it deems appropriate with respect to the exceptions and defences opposed by the other party. This period is also for naming the witnesses that have any knowledge regarding the answer, as well as mentioning the documents that relate to the answer. Afterwards the court, ex officio or by request of the parties, will open the evidence period, which in most cases is 40 days – the first 10 days to offer evidence and the next 30 to take the evidences offered. The court can open the evidence period for a shorter time. If the evidences have to be taken outside of the jurisdiction where the litigation has taking place, the court may grant an extension of time in order to take such evidences. This is up to 60 days if evidence has to be gathered in the Republic of Mexico, and up to 90 days if they have to be gathered abroad.

After the evidence period is over, the court grants the parties three days to file their allegations, and after those three days have elapsed, the court gives notice to the parties that it is ready to enter judgment, which shall be rendered within the next 15 days.

Once the judgment is entered, any of the parties in the litigation, or even a third party can appeal against the final judgment. The party that won the litigation can also adhere to the appeal made by the losing party within three days following notification of the appeal. When adhering to the appeal, the party that adheres to the appeal gives more arguments that sustain or reinforce the opinions of the judge. A third party with a legitimate interest can also appeal, if the resolution harms his rights.

An appeal can only take place in those cases where the principal amount of the litigation is more than a certain amount of pesos, as established by law. Appeals have to be filed within a period of nine days after the notification of the final judgment is considered to be in full force and effect. The period for appealing interim judgments or any other court orders is six days if the appeal should be decided at such time. In both cases the parties have to express the legal violations they consider the judgment has. If the appeal will be studied together with the appeal against the final judgment, the period for appealing is three days and the parties don't have to express legal violations, since they will be expressed when they appeal the final judgment.

Once a party has appealed the final resolution, the court will grant the other party a period of six days to answer the writ of appeal filed by the appealing party. After the six day period has elapsed, the court will send the judicial docket to the court of appeals, so that the court of appeals studies it and issues a final judgment. The court of appeals, when studying the appeals first has to study the procedural violations claimed. If it finds the existence of such violations and considers that they are fundamental to the merits of the case, it will issue a final judgment, ordering that the final judgment issued by the lower court be invalidated so that the proceeding be restored and a new judgment be issued.

It's important to know that the appeal filed against a final judgment suspends any execution of the lower court.

Executive proceedings

Executive proceedings take place when one of the parties has an executive title (examples include promissory notes, judicial confession of a debtor, invoices duly signed and judicially acknowledged by the debtor). They begin with a lawsuit, and to that lawsuit the executive title has to be attached. In these kinds of proceedings the plaintiff has to offer his evidences in the lawsuit. After the lawsuit is accepted by the court, the court will issue an order requesting the debtor to pay, and the summons will be served to the debtor or defendant. The court clerk will first request the payment of monies owed. If the debtor doesn't pay, then the court clerk will proceed to seize assets from the debtor (the debtor will be the first to name the assets to be seized, but if he doesn't that right will be transferred to the plaintiff/creditor). Once assets have been seized the debtor will be served with a summons and granted a period of eight days to answer the lawsuit, and oppose exceptions and defenses. In executive actions only very few exceptions are admitted by the court. When answering the lawsuit the defendant has to offer evidence. After the defendant answers the lawsuit, the court grants the plaintiff a period of three days in order to determine what he deems appropriate with respect to the exceptions and defences opposed by the other party, as well as for offering evidence related to the answer of the lawsuit. Afterwards the court will open the evidence period, for 15 days, so that all of the evidence can be considered during that term, but the court can accept evidence after those 15 days.

After the evidence period is over, the court grants the parties two days to file their allegations, and after those two days have elapsed, the court gives notice to the parties that it is ready to enter judgment, which shall be rendered within the next eight days. Once the judgment is entered, if the plaintiff proved his action, the judge will declare that the assets seized should be sold in public auction. Following the declaration, the parties will appoint experts in appraisal and in case the experts' valuations of the assets differ, the judge will appoint a third expert. Once the value of the assets is obtained, the court will announce the legal sale of the goods via a publication. This is made three times in three days if the assets to be sold are not real estate. In case of real estate, the announcement will be published for nine days. After the publication period the goods will be sold at a public auction.

With respect to appeals, the same rules mentioned for the ordinary proceeding apply to executive proceeding.

Special proceedings

The special proceedings contemplated by the Commerce Code are extrajudicial execution of guarantees granted through a pledge without transmission of the asset and guarantee trust, and the judicial execution of guarantees granted through a pledge without transmission of the asset and guarantee trust.

The purpose of these proceedings is to claim payment of credits that are due and payable and to obtain possession of the assets that have been given as guarantees in trusts. It's important to point out that ancillary proceedings are not admitted in these kinds of proceedings and they cannot be suspended under any circumstances.

Urgent or interim applications

Interim remedies can be requested and granted by the court if certain criteria are satisfied. These are: a threat that the person against whom the lawsuit will be filed or has been filed will hide or leave the place where litigation is taking place; a threat that assets will be hidden or deteriorate in such cases when an in rem action will be brought; and, a threat that assets will be hidden or sold in such cases when a personal action will be brought and those are the only assets of the debtor.

The only interim remedies available are confinement and provisional seizure of assets. In order for the confinement to take place, the party requesting it should post a bond in order to guarantee possible damages and profits that could be caused to the other party due to such an order. The amount of the bond is established by the judge at his discretion. In order for the provisional seizure of assets to take place, the party requesting it should express the value of the claim or of the thing that is claimed, and the judge will determine the amount of the seizure. If the provisional seizure is not claimed based on an executive title, the plaintiff has to post a bond in order to guarantee the possible damages and loss of profits that might be caused. If the defendant deposits the value or object claimed, or gives sufficient bond or proves that he has sufficient assets (real estate) to pay the amounts claimed, the judge will either deny the interim injunction requested, or leave without effects the interim injunction previously granted. If the interim remedy is requested and granted before the litigation takes place, the party that requested it has to file the lawsuit within the next three days if the litigation will take place in the same jurisdiction. If it's in a different jurisdiction the court will extend that period of time according to the distance where the litigation will take place (one additional day for each 200 kilometres or fraction exceeding 100 kilometres).

Interim injunctions can be obtained without prior notice to the defendant, but not on the same day they are requested. Confinement is a mandatory interim injunction that compels a party not to leave the place where the litigation is taking place, without leaving a sufficiently instructed representative and with the sufficient funds to be responsible of the outcome of the case.

In federal civil procedures the judge can grant all of the appropriate injunctions in order to maintain the status quo. These kinds of injunctions are granted without prior notice to the defendant. During the proceeding or before it, the judge can grant the interim injunctions consisting of a seizure of assets in order to guarantee the outcome of the case, and deposit or seizure of things, books, or documents, including documents that are the subject matter of the litigation. These interim injunctions can be granted if the party that requests them guarantees the possible damages and loss of profits that the defendant may suffer.

Enforcement of foreign judgments

The Federal Code of Civil Procedures establishes that foreign judgments can be enforced in Mexico as long as they comply with the following requirements:

• formalities related to letters rogatory
• they were not issued in an in rem action
• the foreign judge had jurisdiction according to international rules consistent with those mentioned in Mexican law
• the defendant was notified or served personally
• the judgment cannot be overturned or modified by any means in the jurisdiction where it was issued
• the action brought in such jurisdiction is not pending, between the same parties, before Mexican courts, and in which Mexican courts had heard first about such case
• the fulfillment of the obligation ordered is not contrary to Mexican Public Policy
• the judgment fulfills the conditions as to be considered authentic

Mexican courts can deny the execution of foreign judgments – even if they comply with all of the requisites mentioned above – if it's proven that Mexican judgments are not enforced in the jurisdiction where the judgment was issued.

In order for a foreign judgment to be executed, it has to be requested through letters rogatory and such letters rogatory have: an authentic copy of the judgment, award or judicial resolution; authentic copies proving that summons were served personally and that the judgment cannot be overturned or modified by any means; and have been translated into Spanish. Also, the party that wishes to execute such judgment must give an address where the homologation will take place.

A foreign judgment should be enforced in the court of the domicile of the defendant or where the defendant has his assets. Once the court receives the request for executing the foreign judgment, it will grant the parties a period of nine days in order to oppose defenses or exercise their rights. If they offer evidences the court will set a date for a hearing. After the hearing the court will issue its judgment.

Assistance to foreign courts

Mexican courts are very open to assisting foreign courts. The Federal Code of Civil Procedures has a chapter devoted to assisting foreign courts, and it establishes that requests from foreign courts don't have to be legalised if they are transmitted by official authorities, but that they have to be translated into Spanish.

Mexican courts can assist foreign courts in any aspect, since the Federal Code of Civil Procedures doesn't establish any prohibition for assistance. Letters rogatory have to be delivered to the required authority either through the parties, judicially or by diplomatic or consular agents, or by the central authority of any of the countries involved in this process.

Once the letters rogatory are received by the assisting court, it can assist the foreign court according to the applicable laws. However, the foreign court can request the local court to avoid local formalities or to use specific formalities different than local formalities, if this is not harmful to Mexican public policy.

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