On July 23, 1993 amendments to the Mexican Commercial Code and the federal Code of Civil Procedure further liberalized Mexico's arbitration law. This endorsement of arbitration should reassure foreign businesses interested in expanding trade with Mexico.

The amended Commercial Code incorporates many rules in the UNCITRAL Model Law on International Commercial Arbitration. Canada and several states in the United States, including California and Texas, have also adopted the Model Law. This growing uniformity removes potential legal barriers to the expansion of trade.

Two decades of change

Modernization of Mexican arbitration law began in 1971 when Mexico acceded to the New York Convention. Mexico subsequently ratified the 1975 Panama Convention and 1979 Montevideo Convention in 1978 and 1987 respectively. These changes were limited, however, to international commercial arbitration proceedings.

A Decree of January 4, 1989 amended the Commercial Code by adding a new Title IV on "The Arbitral Procedure." These amendments extended principles found in international treaties and the UNCITRAL Model Law to both domestic and international arbitrations. The new provisions gave private parties considerable flexibility in structuring dispute resolution proceedings.
More recent liberalization

The July 1993 amendments addresses several shortcomings in the 1989 law.

Private parties have even greater freedom to shape arbitral procedures under the new law. The parties are free to agree on the procedures to be followed. When parties do not choose the procedures, the new law now provides that the arbitral tribunal itself may conduct proceedings as it deems appropriate. The older law provided that in the absence of express agreement the procedural rules of the Commercial Code applied.

Other provisions also provide the parties with greater flexibility. The parties may choose to conduct the proceedings in a language other than Spanish, to select the number of arbitrators, and to designate the place of arbitration. No longer must the arbitration proceeding be completed in 60 working days when the parties have not agreed on a longer time. There are no longer limits on when a counterclaim can be presented.

The new Mexican law expressly provides that courts may intervene in the arbitral process only when specifically authorized. Courts are directed to enforce an arbitration agreement, even if broadly drafted, unless the agreement is void, inoperative, or incapable of being performed.

A court may grant interim relief, but the law also provides that an arbitral tribunal itself may order a party to take interim measures to protect property if the other party so requests. Courts may hear challenges to arbitrators or appoint an arbitrator if a party has failed to do so. They may also assist a tribunal with the gathering of evidence.

The Mexican legislation was published in the Diario Oficial for July 22, 1993 and came into force on the following day. Lic. Jose Lu¡s Siqueiros, a member of the ITA board, is preparing an English translation.