1E9Ct5D

CHAPTER XXIIDispute Resolution1. IntroductionIn Mexico, as in other countries, there is a system for the determination of applicablelaw. The general principle in commercial matters is the freedom of the parties tochoose the law they prefer to govern their contracts. However, this freedom is subject,as in other legal systems, to public order or public policy regulations. In effect,the Commerce Code (Código de Comercio) establishes that in commercial agreements“each party is bound in the manner and terms that it intended to be bound and thevalidity of the commercial act does not depend on the observance of formalities orparticular requirements” (Article 78), which indicates a broad freedom for the contractingparties with respect to establishing the law applicable to their contract andrelief from formalities that could affect the liberty of contract. This broad latitude inthe Commerce Code is complemented by the freedom the parties have to submittheir contracts to dispute resolution by arbitration. As we will see throughout thischapter, Mexican law establishes, in addition to the above possibilities, rules for thedetermination of the jurisdiction of judges and for the recognition and enforcementof foreign judgments. We will also provide an overview of the different proceduresprovided for in the Mexican procedural system and we conclude with our legal treatmentof arbitration.3352. Choice of Applicable Law and Jurisdiction2.1. Applicable LawThe determination of applicable law is governed by the civil codes of the different statesof the Republic. In commercial matters the Federal Civil Code (Código Civil Federal, CCF)is applicable, Article 12 of which states: