MEXICO Trends and Developments Contributed by: Marco Tulio Venegas, LITREDI, S.C.
A second limit concerns the law the tribunal must apply. Arbitral jurisdiction should be kept distinct from the substantive law governing the dispute: consent may authorise a tribunal to decide contractual claims without displacing the mandatory rules of Mexican public law that bear on the validity, performance or termination of the underlying arrangement. The dis - tinction matters most where contractual rights depend on permits, planning determinations, interconnection decisions, or other regulatory acts whose legal effects originate outside the contract. A third limit is structural rather than jurisdictional. Mixed generation projects frequently spread obliga - tions across several contracts, concluded by different entities and governed by distinct dispute resolution provisions. Such fragmentation invites parallel pro - ceedings, inconsistent findings and uncertainty over which tribunal may decide a common question of fact or law. The effectiveness of arbitration here rests less on the wording of any single clause than on the com - patibility of consent, joinder, consolidation and confi - dentiality provisions across the project’s contractual structure. A final distinction binds the foregoing from outside the contract altogether. The consent examined so far governs contract arbitration, which does not exhaust the remedies potentially available to a foreign investor in a mixed project. Contract arbitration and invest - ment arbitration remain distinct mechanisms: the first derives from consent given in the project agreement, while the second depends on an applicable treaty, a protected investor and investment, and the treaty’s jurisdictional conditions. Conclusion The Sheinbaum administration’s electricity policy constitutes a state-directed mixed model rather than a restored monopoly: CFE’s institutional prevalence and the State’s binding planning authority define a framework within which private capital continues to participate through the wholesale market, long-term contractual arrangements, and mixed projects under majority public participation. The 54% benchmark is its most visible expression, but not its most con - sequential feature. What distinguishes the model is the relocation of the co-ordinating function itself:
investment that once responded to price signals now responds to a plan, and the contract has replaced the market as the principal instrument through which public direction and private capital are reconciled. That displacement assigns arbitration to a defined and comparatively modest role: it reaches the com - mercial dimension of public-private co-operation, not the exercise of public authority, and its practical value depends on the coherence of that boundary across interdependent project contracts. Arbitration is there - fore neither a guarantee against regulatory risk nor a peripheral formality, and accounts that treat it as either misdescribe its function. Whether the wider framework performs as intended remains genuinely open. Binding planning may narrow the gap between generation projects and transmission capacity, and mixed investment may mobilise capital and expertise; working in the other direction are the concentration of planning authority, CFE’s dual position as market par - ticipant and state public enterprise, implementation rules still in movement, and the uncertain legal bound - ary between contractual conduct and public authority. The evidence that would settle the question – the final distribution of capacity among CFE-owned, mixed and private projects, the governance rights adopted in mixed-development vehicles, the consistency of permitting decisions with binding planning, and the wording of dispute resolution provisions in executed contracts – is not yet public. The wider implication is methodological. A state that plans while inviting capital, and that submits the resulting contracts to consensual adjudication within limits it continues to define, is doing something more particular than reversing the reform of 2013; assess - ments that ask only whether the framework favours investment will miss what is at stake, because its coherence will be tested not at the level of ownership percentages but at the points where planning, con - tract and public authority meet. Those are the points at which the framework has placed its dispute reso - lution provisions. The arrangement’s durability is not something the present evidence can settle; the terms on which it should be judged, however, can be fixed in advance – and this article has sought to design a path to fix them.
625 CHAMBERS.COM
Powered by FlippingBook