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The revaluation of alternative means of dispute resolution in the face of the imminent collapse of the Mexican courts

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Esteban Maqueo Barnetche
Maqueo Barnetche Aguilar & Camarena, Mexico
emaqbar@mbac.mx

Jorge I. Aguilar Torres
Maqueo Barnetche Aguilar & Camarena, Mexico
jorgeiaguilar@mbac.mx

José Iván Magdaleno Camacho
Maqueo Barnetche Aguilar & Camarena, Mexico
imag@mbac.mx

The revaluation of alternative means of dispute resolution in the face of the imminent collapse of the Mexican courts for the resolution of civil and commercial disputes

On 11 March 2020, the World Health Organization classified the disease caused by the new coronavirus as a pandemic. In Mexico, the General Health Council issued on 30 March 2020 a nationwide declaration of a health emergency by force majeure due to the epidemic of the disease (Covid-19) caused by the SARS-CoV2 virus, starting an economic paralysis that has affected all citizens socially and economically.

The local and federal judicial system has not been indifferent to this paralysis. The courts were closed in mid-March 2020 and, with some exceptions, they remained closed until the start of August 2020. This was a period in which procedural deadlines have not been applied, hearings have not been held, proceedings have not received any impulse and new claims have not been admitted (with some caveats – electronically and only for urgent matters). Consequently, the majority of Mexicans have been deprived of exercising their human right of access to the administration of justice, causing a significant judicial backlog which is expected to increase exponentially due to breaches in contractual relationships caused by social isolation and its impact on the country’s economy.

The reopening of the courts is expected to be gradual and slow, with the application of measures to prevent the usual crowds in justice centres and allowing only restricted access to the public (parties, their lawyers, witnesses, experts etc) to the courts in number and on alternating weekdays. For example, the courts with even numbers are open to the public on Tuesdays and Thursdays, and the odd-numbered courts on Mondays and Wednesdays, in addition to holding only one or two hearings per day. This will foreseeably cause a collapse of the Mexican judicial system in most local and federal court.

In Mexico City, the local courts that settle civil and commercial disputes already had a workload that exceeded their capacity, before the pandemic. In 2019, 109,197 new civil and commercial lawsuits were filed before the Superior Court of Justice of Mexico City.

Because of the lag in the final decision of ongoing lawsuits, added to the avalanche of lawsuits that are coming, it can be predicted that initial service to defendants may take from one to six months (in optimal conditions and when a defendant does not place obstacles to service or hides) and from three to eight months to set a date for the evidentiary hearing. Therefore, difficult times are ahead for the solution of civil and commercial conflicts in Mexico.

At the state level (with the exception of Nuevo León, and to a limited extent Querétaro and the State of Mexico), the courts do not have a digital platform that allows for the normal progress of online trials. Their legal operators (attorneys, court clerks, paralegals etc) are not familiar with online processes, and although the heads of some superior courts have already stated that they are working on the digitisation of their procedures, progress is slow and it will not be ready to be implemented immediately.

In this context, alternative dispute resolution (ADR) will be re-evaluated. Attorneys and the general public will consider these mechanisms as an alternative of constitutional rank in accordance with Article 17 of the Federal Constitution, bearing in mind the havoc caused by the current pandemic, the possibility of outbreaks or new pandemics and the impending judicial saturation and delay.

Among the useful alternatives to consider are mediation, staggered clauses and arbitration. In mediation, the parties are assisted by an impartial third party to settle a conflict, and if an agreement is reached, it becomes res judicata, which means that it can be executed by a judge without the need for a long trial. Instead in arbitration, the impartial third party(ies) appointed by the parties comes to a decision in much the same way as a judge would, based on the evidence presented by the parties, but through a process much more agile and flexible than a trial. In addition, the decision (award) cannot be appealed except in exceptional cases, which greatly shortens the process. Some of the institutions which can manage arbitration in Mexico are the Chamber of Commerce of Mexico City (CANACO), the Arbitration Center of Mexico (CAM) or the International Chamber of Commerce (ICC).

Both mediation and arbitration have the advantage that they do not necessarily stop activities due to any declaration of a pandemic. They are also much more flexible, the use of information technologies is privileged, hearings can be held by video conference and the parties can be assisted by all means that they agree upon to achieve a solution.

The parties can always use any of these means if they so agree, even if a trial is already underway (although it may be very rare to go to arbitration). The award or agreement will have res judicata status, which makes it an efficient option to access justice in the face of the collapse that will take place in the courts in the coming months.

In a post-pandemic world, it is important for attorneys to advocate to their clients the addition of ADR clauses in future contracts, allowing them to solve an eventual conflict in a prompt, expedited and fair manner. However, the possibility of agreeing on this type of ADR method for ongoing conflicts should not be lost from sight if there is the interest of the parties in accessing a forum that allows them to obtain a decision that settles their dispute without waiting for judicial stabilisation.

Therefore, those who need to immediately solve disputes are invited to consider these alternative means of conflict resolution, so that they may reciprocate concessions and may reach a solution to an ongoing conflict. As for future contracts, parties are also invited to include an arbitration or staggered clause of mediation and arbitration.

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