MEXICO Law and Practice Contributed by: Julián J. Garza Castañeda and Paulina Bracamontes Belmonte, Nader Hayaux & Goebel
actions through other types of documents, including certified account statements and loan agreements. With regard to collateral documents, certain security instruments, including mortgages, pledgor-in-posses- sion pledge agreements and guarantee trusts on real estate assets, are required to be formalised before a Mexican notary public and registered with the corre- sponding Mexican public registry (ie, the local Public Registry of Property or the Federal Registry of Mov- able Property). A lien on other assets may require additional formali- ties – for example, registration with intellectual prop- erty registries if such lien is created on certain intel- lectual property rights. A guarantee trust permits a borrower and a lender to agree on the terms and conditions to conduct an out- of-court foreclosure procedure, which may consist of a sale process to third parties or a direct transfer of collateral to a lender. Any agreed-upon out-of-court foreclosure procedure must comply with very specific rules and may be subject to challenges in a Mexican court. Challenges to the enforcement of a security include gaining possession over the collateral to be realised either due to statutory restrictions or because the col- lateral is in the possession of a third party. 6.2 Foreign Law and Jurisdiction Under Mexican law, the choice of foreign law should be recognised and enforced, other than in specific cases, such as, for example, collateral instruments that create a security interest over assets located in Mexican territory, which shall be generally subject to Mexican law. Regarding submission to foreign jurisdiction, Mexican parties face no specific restrictions. A judgment rendered by a foreign court, pursuant to a legal action instituted before such court in connec- tion with an outstanding loan, would be enforceable against the borrower in the competent courts of Mex- ico, provided that:
• such judgment is obtained in compliance with: (a) the legal requirements of the jurisdiction of the court rendering such judgment; and (b) all legal requirements of the respective trans- action documents; • such judgment is strictly for the payment of a cer- tain sum of money, based on an in personam (as opposed to an in rem) action; • the judge or court rendering the judgment was competent to hear and judge on the subject matter of the case in accordance with accepted princi- ples of international law that are compatible with Mexican law; • service of process is made personally on the defendant or on its duly appointed process agent; note that service of process by mail does not con- stitute personal service of process under Mexican law, and, given that such service of process is considered to be a basic procedural requirement, a final judgment based on such process would not be enforced by the courts of Mexico; • such judgment does not contravene Mexican law, the public policy of Mexico, international treaties or agreements binding upon Mexico, or generally accepted principles of international law; • the applicable procedure under Mexican law is complied with when enforcing foreign judgments, including: (a) the issuance of a letter rogatory by the com- petent authority of such jurisdiction requesting enforcement of such judgment; and (b) the certification of such judgment as authentic by the corresponding authorities of such juris- diction in accordance with the laws thereof; • the action in respect of which such judgment is rendered is not the subject matter of a lawsuit between the same parties that is pending before a Mexican court; • such judgment is final in the jurisdiction where it is obtained; • the judgment fulfils the necessary requirements to be considered authentic; and • the courts of such jurisdiction recognise the princi- ples of reciprocity in connection with the enforce- ment of Mexican judgments in such jurisdiction.
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