Special report: Arbitration
‘Reliability and honesty’ of arbitrators appealing to
clients
Arbitration is less rigid than litigation and consequently an increasing number of Mexican clients are
adopting it as there preferred method of resolving disputes
Alfonso Sepúlveda
The flexibility of arbitration, in addition
to the “reliability and honesty” of
arbitrators means that it is becoming
an increasingly popular method of
resolving disputes in Mexico, according
to Alfonso Sepúlveda, partner at law
firm Sepúlveda Díaz Noriega, which
is based in Mexico City. Sepúlveda
believes that arbitration offers a
more flexible, modern approach to
dispute resolution than traditional
court proceedings. “Arbitration
lacks the inflexibility and rigidity of
litigation, which is subject to a range of
formalities,” Sepúlveda explains.
“Unfortunately, these persist in
Mexican court proceedings, even
though sometimes they verge on
the absurd.” He continues: “And an
additional advantage is the reliability
and honesty of arbitrators, both in their
thinking and actions.” Sepúlveda says
the increase in the use of arbitration for
dispute resolution in Mexico has been
an ongoing trend since the country
incorporated the United Nations’ Model
Law on International Commercial
Arbitration into its legislation in 1993.
Meanwhile, Mexico is a signatory to
the Convention on the Recognition
and Enforcement of Foreign Arbitral
Awards, which has been signed by
more than 140 countries. “This has
facilitated the acceptance, recognition
and execution of final arbitration
awards in practically any jurisdiction in
the world,” Sepúlveda says.
He adds that the use of arbitration
in Mexico is growing. “There has
been a marked increase in arbitration
proceedings in recent years, and now
close to 50 per cent of disputes are
heard before Mexican or international
arbitration tribunals,“ Sepúlveda says.
He adds that arbitration institutions
should be credited with having played
a key role in establishing arbitration as
an alternative to litigation. “Arbitration
institutions have made great efforts in
this respect, for example by organising
seminars and training programmes
attended by judges and magistrates,”
Sepúlveda explains. “This has
improved knowledge of arbitration
among Mexico´s legal community,” he
adds.
Furthermore, Sepúlveda points
to the fact that there are many legal
30 • THE LATIN AMERICAN LAWYER • December 2018
precedents in Mexico that favour
arbitration. “Judges are highly
respectful of submission to arbitration
agreements and of provisional and
final orders made by arbitrators,” he
says. Meanwhile, for clients, arbitration
offers a number of advantages that
traditional litigation proceedings do
not, according to Sepúlveda. These
include the expedient resolution of
cases and, more importantly, the fact
the parties involved can appoint an
arbitrator with expertise in a particular
area.
Big incentive
Sepúlveda explains: “One of the big
incentives offered by arbitration is
that the parties are often allowed to
select an arbitrator who has specific
expertise. This is crucial to understand,
and successfully resolve, complex
disputes.” Meanwhile, another
advantage of arbitration is the privacy
it allows. “This encourages negotiation
between the parties, and also prevents
the breakdown of commercial
relationships, both while proceedings
are ongoing and once the dispute has
been resolved,” he says.
Sepúlveda Díaz Noriega has handled
a significant amount of work related
to commercial arbitrations, before both
Mexican and international tribunals,
Sepúlveda says. “The only limits to
commercial arbitration in Mexico are
those set out by the law on freedom
of contract,” he explains. “Therefore,
we have handled a very wide range
of disputes, both as arbitrators or as
counsel acting for one of the parties
involved.” For example, the firm
recently advised on a number of
commercial, civil and administrative
disputes, and it has particular expertise
in the resolution of conflicts in the
agricultural sector, and this type of
work is on the rise, Sepúlveda says.
He adds that disputes have increased
as a result of the “execution of energy
projects, which required the installation
of pipelines for the transport and
distribution of hydrocarbons”. There
are also a significant number of product
liability disputes and product recalls,
while law firms are also advising on the
enforcement of international arbitration
awards.