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Guide to Regional Arbitration (volume 5 - 2017)

Worth a Closer Look: Latin America and the Caribbean

02 November 2016

CENTRO DE ARBITRAJE DE MÉXICO (MEXICO ARBITRATION CENTRE) (CAM)

When was it founded?

1997.

Why is it worth a closer look?

It’s a strong and well-run organisation with well-drafted rules, based on the 1998 ICC Rules of Arbitration, if on the small side.

It’s had good leadership too, in the form of Carolina Castellanos López, for many years and more recently Myriam Rosales, formerly of the transparency board for contracting and public works. It also benefits from an oversight council that contains some illustrious names – including two former Supreme Court justices: Ulises Schmill Ordóñez and Carlos de Silva y Nava (both of whom are former presidents of the Supreme Court). Guillermo Aguilar-Álvarez (former chief legal counsel to Mexico during NAFTA negotiations) is on the same oversight board.

What does the council actually do?

Its role is similar to the ICC’s Court: affirming and removing arbitrators, scrutinising awards. If the dispute is under Mexican law, then the scrutiny function is doubly useful, as it increases the likelihood of compliance with the content of Mexican law, which smooths enforcement.

What other things make it popular?

By local standards it is a highly professional and responsive organisation, although views are a little mixed here. And it’s very affordable.

What’s its track record like?

It’s not the busiest – it gets about 12 new cases a year. But that figure has been steady for the past 10 years. What’s more, no CAM arbitral award has ever been annulled by either a Mexican or a foreign court, or refused for enforcement.

And how big are the cases going there?

The largest has been about US$750 million. The average value, though, is about US$11 million.

What are the cases about?

The most commonly seen subjects are telecoms, franchising, construction, energy and IP, according to the most recent statistics.

Who uses it, aside from Mexicans?

To date, 12 per cent of CAM parties have been foreign. Recent users have hailed from the US, Switzerland, Germany, Spain, Scotland and Guatemala.

What sort of person does CAM Mexico appoint as an arbitrator?

Mexican nationals for the most part, with the occasional US lawyer. It’s trying to expand its arbitrator pool.

Do parties control the appointment process?

Yes, although the appointee has to be approved by the general council. One obstacle is the fees, which are a little lower than top arbitrators may like. It may have to do something about that if it’s to realise its ambitions.

So what’s holding it back?

There are some concerns about the size of its staff. Officially it has five full-time lawyers running case work, who are multilingual, but some think the true number is a bit lower. The council’s expertise on arbitral procedure has also been called into question a few times. But a bigger issue when it comes to international cases is Mexico’s reputation as a seat.

What’s wrong with Mexico’s reputation as a seat?

It’s on the decline, thanks to court interference. In the past three years a number of arbitrators (usually sitting solo) have been forced to suspend proceedings after receiving personal injunctions. One took advice on whether he could simple ignore the order and reported the implications would have been “severe”. As a result, a lot of work has moved from Mexico to Miami.

What’s the most popular institution in Mexico?

Local lawyers say that the first choice for most serious Mexican parties remains the ICC (although there is an element of ignorance in the decisions. Some think choosing “ICC” means the case will automatically be heard in Paris).

Lima Chamber of Commerce’s Arbitration Centre

Why’s it worth a closer look?

It’s one of the busiest centres in Latin America thanks to a migration – by business and government in Peru – away from the local court system.

How many cases does it hear per year?

It’s managed some 3,000 now in 23 years.

How international is it?

 It could be more so, and soon may be more so. It’s expected to release new rules soon that are better designed for international disputes. The centre has also helped to organise a regular international conference in Lima each year, which has helped to bring its excellent track record to wider attention. It also has one of the better arbitrator lists, when it comes to international talent. Various international arbitration lawyers who practise in the region now feel, if the option of Lima comes up, it’s not one you immediately dismiss.