Issue #
October 2010

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Replacement of a Justice on Mexico’s Supreme Court

October 17, 2010

A Justice of Mexico’s Supreme Court, Jose de Jesus Gudiño Pelayo, recently died unexpectedly, thus, creating a vacancy that will need to be filled in the near future. Justice Gudiño Pelayo was appointed to the Supreme Court following constitutional reforms in 1995 when the Supreme Court changed from 24 to 11 members and received its authority to resolve constitutional controversies and actions alleging unconstitutionality. Such reforms have tended to convert Mexico’s Supreme Court into a Constitutional Court. Justice Gudiño Pelayo distinguished himself as an apolitical judge, with independent and juridical conviction. His individual votes showed this judicial temperament. Remaining outside of political affairs, his career was always linked to the judiciary and legal academia. An author of various books on human rights and technical issues, especially those related to the Mexican amparo (constitutional writ of appeal) procedure, he enjoyed well-deserved professional, judicial and academic respect. The replacement will be designated through a process that is similar to that used in the U.S., in which the President and the Mexican Senate will participate. In Mexico, the President presents a slate of three candidates to the Senate from which such legislative body elects the new Justice for Mexico’s Supreme Court. Candidates must appear before the Senate before the election, and a quorum of at least two thirds of the Senate must be present. The Senate has thirty days to make its designation, and if such period runs without the Senate selecting a new Justice for Mexico’s Supreme Court, the President may then make the designation from the three persons who comprise the candidate slate. If the Senate rejects the slate, the President must send another slate of candidates. Is such new slate is rejected, the President may directly appoint the new justice from the three candidates listed on the slate. The justice who is selected must then take an oath before the Senate to faithfully uphold the Constitution. The question presented in Mexican legal and political arenas whether the new judge who will replace Justice Gudiño will come from the judiciary, academia, the political world or a professional practice. In Mexico, justices of the Supreme Court are designated to occupy their posts for a term of fifteen years, which contrasts with the U.S. practice of designating federal judges for life.

Reforms to Regulations on Public Registries of Commerce and New Single Registry for Security Interests in Personal Property

October 17, 2010

On September 23, 2010, Mexico’s Department of the Economy (Secretaria de Economía) published a decree amending regulations governing Public Registries ofCommerce (Registros Públicos del Comercio). The purpose of such amendment is to create a Single Registry of Guaranties over personal property (or RUG by itsinitials in Spanish) within a separate section of the Public Registry of Commerce. The RUG will be public and available every day of the year. Entries will be made inelectronic record files of parties granting security interests in personal property. In this manner, security interests in personal property, including pledges withouttransfer of possession, guarantees based on factoring loans, industrial mortgages, security interests in aircraft and vessels, reservations of ownership clauses in thepurchase and sale of identifiable personal property, among others, are covered in the new procedures. The RUG will show security interests in personal propertycreated after the effective date of the decree.. This means that security interests granted before the RUG’s initial date of implementation will not necessarily appear in the RUG. As such, creditors holding security interests in personal property prior to the RUG’s beginning of operations should exercise caution and verify if theirsecurity interests in personal property has been included into the new RUG system.

Recent Jurisprudence – Notices of Assignment of Debtor Rights

October 17, 2010

Recently, Mexico’s Supreme Court of Justice (Suprema Corte de Justicia de la Nación or SCJN) published, in the Judicial Weekly of the Federation, case decisionnumber III.2o.C.J/29 under the heading, “Assignments of rights to third parties. Notice to the debtor is not a necessary requirement for such assignment to take effect.”In this case, the SCJN confirmed that, as provided in articles 2030 through 2034 and 2036 of the Federal Civil Code, “notice of an assignment of rights does not constitute a transfer, so that the only consequence of the omission of such notice is that the debtor will be released from its obligation to pay the creditor by paying the original creditor to the detriment of the assignee.” In this sense, Mexico’s highest court deems a notice of assignment of rights to a debtor as an act that benefits the assignee of the original creditor and not the debtor because a debtor’s lack of a notice implies that such debtor only has an obligation to pay the original creditor to the detriment of the assignee, who would not receive payment on the rights assigned from the assignor and, as a consequence, would have to pursue its rights against the assignor or the original creditor.