Choice of Court Agreements (Forum Selection Clauses), by Jorge Sánchez Cubillo

January 25, 2016
Choice of Court Agreements (Forum Selection Clauses), by Jorge Sánchez Cubillo

On October 1, 2015, the Decree Promulgating the Convention on Choice of Court Agreements was published in the Official Journal of the Federation, the same which was adopted by the 20th Session of the Hague Conference on Private International Law on June 30, 2005.

This Decree forms part of the international effort to standardize the law and the jurisdiction of courts in various countries in civil and mercantile matters in order to guarantee reciprocal recognition and enforcement of judgments issued by the participating countries for controversies between individuals on such matters. It is important to note that the U.S. and Canada are not currently signatories to such Convention.

The Convention expressly excludes from its purposes matters related to the marital status of individuals, family law, transportation of people and goods, environmental matters, non-pecuniary damages, in-rem rights, shareholder rights, nuclear damages, anti-trust matters and arbitration, among others.

While the Commerce Code and the Federal Code on Civil Procedure recognize choice of court agreements and provide for “International Procedural Cooperation,” specifically, the recognition and enforcement of judgments issued abroad and/or court settlement agreements establish many limitations and requirements that can, in many cases, complicate the enforcement of such judgments.

With the enactment of this Convention, the parties to a contract may establish a choice of court agreement (also known as a forum selection clause) establishing the competent court and/or courts in any of the countries that are parties to the Convention for the resolution of any dispute, thereby waiving the jurisdiction of any other court that could apply. Once the dispute has ended with the issuance of a final judgment issued by a court in a country that is a party to the Convention, such judgment may be recognized and enforced by another participating country, without the need to review the substance of the issue, so long as certain requirements established by the Convention are met.

In addition to making forum selection more flexible to administer justice and enforce judgments and/or court settlement agreements on mercantile and civil matters, and in some cases international civil matters, the Convention complies with constitutional reforms on human rights; specifically the protection of human rights as to effective access to justice and due process, given that choice of court agreements may be declared void when such rights are not observed.

Sources of information and disclaimer: The following sources of information, among others, have been used in preparing this document: Official Journal of the Federation, the Bank of Mexico, Supreme Court of Justice of the Nation, Department of Finance and Public Credit. The CCN MéxicoReport ™ does not constitute legal or tax advice and should not be used for purposes other than as purely informative for the general public. For more information on the CCN MéxicoReport ™, any of the issues mentioned therein or to inquire about legal services, please contact Robert M. Barnett (rbarnett@ccn-law.com) or Mario Melgar (mmelgar@ccn-law.com), phone (210) 222-1642.

© Copyright 2016, CCN. All Rights Reserved.

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