COVID-19 has already had a dramatic and profound impact on commercial operations and even on the solvency of many businesses in various sectors of the Mexican economy. For contracting parties, it will be of vital importance that their commercial partners continue to comply with their contractual obligations during the crisis and do not lose their credits in the event of the insolvency of their commercial partners. To effectively protect the rights of such businesses, it may be necessary to obtain
Considering that the Mexican judiciary is in a state of paralysis, arbitral institutions, including the International Chamber of Commerce (ICC), the Arbitration Center of Mexico (CAM), and the Mediation and Arbitration Center of CANACO, remain open and fully operational. For its part, the ICC has adapted to these changes and has published guidance materials designed to mitigate the effects of the crisis on the efficiency of arbitral proceedings. Appropriately, in accordance with Article 1421 of the Mexican Commercial Code, arbitrations may be commenced, conducted, and resolved, in principle without any need for judicial intervention and, therefore, when contracts provide for the resolution of disputes by means of arbitration, this may provide a valuable avenue to obtain protective measures in the immediate term. In this sense, under Article 1479 of the Mexican Commercial Code, it is possible to obtain from an arbitral tribunal urgent measures to maintain the status quo, pending the final resolution of the principal dispute. If one party’s contracts provide for the resolution of disputes under the ICC rules, they may be able to obtain such protective measures from an “emergency” arbitrator in as little as 15 days from the commencement of the proceeding. Consequently, if any of your contracts provides for arbitration as a means to resolve disputes, and your counterparty is failing to comply with its obligations, it is advisable that you seek urgent advice to ensure that your position is protected. Our experts would be glad to offer you their immediate support. For those already involved in an ongoing arbitration proceeding, there is a possibility that COVID-19 may have an impact on how the principal proceeding is conducted. Generally speaking, under the main institutional rules, arbitral tribunals have the obligation to conduct proceedings in an expeditious and cost-effective manner and, equally, to act fairly and impartially – ensuring each party “a reasonable opportunity to present its case.” The COVID-19 pandemic may affect the speed with which an arbitral proceeding is conducted; however, excessive countermeasures may also have an impact on procedural fairness. Under the Mexican Commercial Code and generally under the procedural rules of arbitral institutions, an arbitral tribunal has the right to conduct the arbitral proceeding in the manner it deems appropriate. The ICC has already recommended that, in exercising this right, arbitral tribunals may implement some of the following measures (among others) that the parties should bear in mind, in order to mitigate the effects of the pandemic: • Expeditiously dismissing certain claims or defenses deemed manifestly without merit; • Ordering that the entire dispute, or certain specific aspects thereof, may be resolved solely on the basis of documentary evidence, without an evidentiary hearing; • Ordering that witness or expert evidence not be required to decide on certain aspects, or ordering that such evidence take the form of responses to the questions posed by opposing counsel and/or the arbitral tribunal; • Limiting the number and volume of written submissions; or • Using audio conferences or video conferences in lieu of in-person hearings. Arbitration proceedings must be approached with strategic nuance and a thorough understanding of the applicable contractual regimes and legislation. In these times, those demands only increase. The dispute resolution team of Von Wobeser y Sierra, S.C. has extensive experience and specialization in such matters and is available to offer its immediate advice to domestic and foreign companies doing business in Mexico and abroad. For additional information, please contact our experts: Claus von Wobeser, Partner: +52 (55) 5258 1011 | cvonwobeser@vwys.com.mx Adrián Magallanes, Partner: +52 (55) 5258 1077 | amagallanes@vwys.com.mx Montserrat Manzano, Partner: +52 (55) 5258 1018 | mmanzano@vwys.com.mx Diego Sierra, Partner: +52 (55) 5258 1039 | dsierra@vwys.com.mx
