We can define arbitration as “a legal proceeding whereby two or more parties voluntarily submit the resolution of their current or future disputes to an individual known as arbitrator; so their disputes may be resolved in accordance with the procedural rules selected by the parties (conventional proceeding.)” This proceeding may be agreed through the addition of an arbitration clause in the agreement executed by the parties, or through a separate arbitration agreement for cases where the dispute arisen between the parties and they want to resolve it through arbitration.
The arbitration may be used to resolve commercial disputes arising between national or international parties. The arbitration proceeding may apply in both cases, from an international arbitration point of view, there are two main legal tools for our country: The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 1958, and the Inter-American Convention on International Commercial Arbitration, subscribed in 1975 in Panama by the member states of the Organization of American States, to which Mexico is a party. For national arbitrations, we may see as legal grounds the provisions of the Code of Commerce, the procedural civil laws supplying any deficiency of the law and the civil codes or special laws depending on the matter of the dispute.
Currently, with the energy and telecommunications reforms, this legal method to solve disputes has become more interesting and important.
There are certain problems in the recently issued laws, which the legislators did not know how to resolve, but hopefully they will be humble enough to admit their mistake and sufficiently wise to solve it. These are contained in the writing of the article about arbitration in these matters, but the law is limited in case of any Administrative Rescission of the agreements.
In Mexico, we have private organizations acting in institutional arbitration proceedings such as the National Chamber of Commerce (CANACO) and the Arbitration Center of Mexico (CAM). At an international level, we may mention the International Chamber of Commerce (ICC) with venue in Paris, France; the ICDR and the American Arbitration Association in the United States of America (AAA) as the most known.
Each one of the institutions mentioned above has its own structure, procedural regulations, and organic rules, which enable them to operate as arbitration administration institutions; however, the international trend is to standardize the procedural laws for arbitration proceedings at least in commercial matters; such as the Uniform Commercial Arbitration Act, which was approved in session of the United Nations Commission on International Trade Law.
Other arbitration proceedings that are currently duly regulated in Mexico are those for solving disputes on banking, insurance, financial, stock-market, trademark and intellectual property matters, which pursuant to the applicable laws establish that the government agencies that regulate certain activity may act as arbitrators between private individuals, so they may resolve any disputes or conflicts resulting in connection with the provision of services or the enforcement of contractual provisions assumed by the parties. In this case, we have the National Banking and Securities Commission, the National Insurance and Bond Commission through the CONDUSEF (National Commission for the Protection of Users of Financial Services), the Federal Consumer Protection Agency, the General Administration of Patents and Trademarks, etc.
When we discuss arbitration, it is quite important to emphasize the significance of guaranteeing the arbitrators’ credibility and impartiality, since they must resolve the disputes in an effective, impartial, fair and equitable manner, but without putting aside the fact that the capacity and experience an arbitrator must have to solve specific disputes brought before him/her is a golden opportunity for the parties, given that such experience translates into more certainty on the subject matter of the conflict and thus an award more in compliance with the law. As a result, for the arbitration proceeding to actually work in Mexico, we believe institutional arbitration organizations should keep recruiting principled men of high moral values and experience, who may guarantee the parties in conflict that their matter will be duly analyzed and resolved with no favoritism.
Arbitration is certainly a need in Mexico, given that the state and federal court systems are overloaded with legal cases, which makes the administration of justice more slow and even of bad quality at times. In fact, arbitration has its advantages, and for that reason the parties submit to it to prevent their cases to be brought to the judicial authorities only to fatten the files of cases left behind. Besides, the arbitration proceedings agility and versatility are unquestionable, because the parties set the terms and conditions for its development and the weighting of evidence, etc., or they may submit to the procedural provisions previously established by the arbitration institutions, which have less formalities than any other procedural law and avoid abusing the court systems by filing trivial, inadmissible remedies and ancillary proceedings.
We believe that for the use of commercial arbitration proceeding to proliferate in our country as a viable alternative resolution to the Mexican court system, a new culture in favor of arbitration must be encouraged by both, the court system and the private organizations specialized in this matter.
A fundamental aspect of the arbitration proceeding is the enforcement of the award issued to solve the dispute in question, either it is an award issued abroad or within national territory. In this regard, it is important to point out that for a long time our internal laws and legal background in the Federal Courts were behind as to the international law, but the most recent reforms to the Code of Commerce have updated our law to make it safe and amiable.
As you may see, Mexico intends to promote commercial arbitration as an alternative means to resolve judicial disputes, so it decided to make the Code of Commerce equivalent to the arbitration model law of the UNCITRAL. Likewise, there are many professionals who want to be members of the arbitrators’ lists of the most prestigious arbitration administration institutions.
In conclusion, the arbitration greatest advantages are:
- A proceeding that in most cases is much more shorter than any legal proceeding set forth in the Mexican laws.
- Appointment of arbitrators with excellent academic and professional credentials.
- Recognition of national and foreign arbitration awards by the Mexican judicial authority.
- Confidentiality in the information used in the arbitration proceedings and in the Award, in case the proceeding is not resolved.
I invite you to visit the arbitration centers and talk to arbitration lawyers to increase your understanding of this matter. image