Measures foreseen in the Securities Market Act (“Ley del Mercado de Valores”) for preventing the hostile takeover of a public stock corporation (sociedad anónima bursátil)

The First Chamber of the Mexican Supreme Court of Justice has stated that the control of a stock corporation “may be actualized by the holding of a certain patrimonial power or by a power of management (administrative) direction“, and held that the plurality of types of control may be classified, depending on its cause or origin, in two groups:

(i) Corporate control derives from the holding of a certain percentage of shares representing the capital stock, which allows its holders to exercise the right to vote in shareholders’ meetings to impose decisions to such meeting, to the board of directors, to appoint and remove directors or to direct the corporate policies of the company.

(ii)Arrangements between shareholders contained in shareholders’ agreements, the company’s bylaws, or any other internal regulatory document of the company, which result in certain shareholders, regardless of whether they are minority shareholders, directing the company’s strategy or major policies.

On the other hand, according to the Supreme Court, the change of control of a stock corporation can also be distinguished, depending on whether it has the collegiate approval of the shareholders and the governing bodies of the company, or not, into hostile or undesired, and friendly or desired.

To ensure that takeovers are desired by the corporate governance bodies of the companies, Article 48 of the Securities Market Act establishes the possibility that the bylaws of public stock corporations may stipulate measures to prevent the undesired or hostile acquisition by third parties or by the shareholders themselves, of shares that grant control of the company, subject to the following requirements: 

  • The extraordinary general shareholders’ meeting has approved such measures, without 5% or more of the capital stock represented by the shareholders present having voted against them.
  • Do not exclude from the economic benefits resulting from the measures, the shareholders other than the persons who intend to acquire control of the company.
  • Do not restrict the acquisition of control in an absolute manner.
  • Do not contravene the provisions of the Securities Market Act regarding takeover bids.

In the event that they do not comply with the above-mentioned requirements, the measures established in the bylaws will be null and void.

Additionally, according to the same article 48, in order to preserve the principle of non-discrimination and the protection of minority rights, public stock corporations are prohibited from introducing certain provisions foreseen for stock market promotion corporations (“sociedades anónimas promotoras de inversion”), specifically those contained in sections I, II and III of Article 13 of the Securities Market Act, in the understanding that, in case such prohibition is not respected, the National Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores”) may authorize the adoption of clauses of such nature.

In analyzing the constitutionality of Article 48 of the Securities Market Act, the First Chamber of the Supreme Court of Justice of Mexico held that the measures of protection against the loss of corporate control derived from a “hostile” purchase of shares, established in such legal provision, are compatible with the economic freedoms recognized in Article 5 of the Mexican Constitution, since, among other matters, such measures “empower individuals to associate in order to voluntarily restrict their own contractual freedom for addressing the risk of sales of shares that may jeopardize the control of the company“, without incurring in absolute prohibitions.


Roberto A. Altamirano Fuentes



Proposal for amendments in the matter of housing lease agreements

As per the requests of associations and individuals promoters of the right to housing, on July 8, 2020, two deputies of the MORENA Parliamentary Group presented to the Mexico City Congress the “Initiative with the Draft Decree Amending and Adding Various Provisions of the Civil Code for the Federal District, in the Matter of Leasing to Ensure the Right to Housing in the Context of the Pandemic” (the “Initiative”).

The Initiative, according to its Statement of Reasons, is supported by the following:

(i) The health crisis resulting from the COVID-19 virus has caused the failure of housing tenants to comply with their obligations to pay rent, as a consequence of economic and social difficulties such as loss of employment, reduction in wages, and commercial inactivity.

(ii) Non-payment of rent can lead to (a) displacement of families with roots in neighborhoods, villages and colonies, (b) evictions, and (c) several people in a homeless condition.

(iii) The civil legislation of Mexico City in the matter of real estate leases does not provide tenants with the appropriate judicial guarantees, as it contravenes the principles of affordability, bearable costs, and legal security of tenure, all components of the human right to housing.

(iv) It is necessary to balance the relationship between the parties of a lease agreement in order to guarantee the right to adequate housing, which is foreseen in Article 4 of the Federal Constitution and Article 9 of the Political Constitution of Mexico City.

The Statement of Reasons of the Initiative refers to the Guidelines on the implementation of the right to adequate housing, issued during April 2020 by the former United Nations Special Rapporteur, which mention the need to take measures to guarantee the right to housing of individuals, such as (i) the cancellation, reduction and/or deferment of rents, and (ii) the implementation of supports and soft loans for homeowners.

In addition, the Initiative highlights the figure of mediation provided in the Alternative Justice Act of the Federal District Superior Court of Justice, as an effective instrument for resolving disputes arising from housing leases.

Specifically, the Initiative proposes to modify the Civil Code for Mexico City, in accordance with the following

  • Amendment to Article 2398.
  1. The housing lease is defined as “that which contributes to the fulfillment of the human right to housing of the lessee in exchange for a certain price in favor of the lessor“.
  2. The housing lease agreement must be subject to a mandatory term of three years, except as provided by the lessee.
  • Addition of two paragraphs to Article 2406.
  1. The vacancy legal proceeding shall be inappropriate if the landlord does not submit a written lease of housing agreement, even if the proceeding is based on failure to pay rent.
  2. The landlord will lose the right to keep the deposit in case of anticipated termination of the housing lease agreement, or an equivalent amount in the case of the termination of the agreement.
  • Addition of Articles 2406 BIS, 2425 BIS, and 2431 BIS.
  1. In the absence of a written agreement, the tenancy shall be presumed to exist if it is demonstrated that a party has consented the occupation of its own property by the other party in return for the payment of a certain price.
  2. In order to exercise any action derived from the breach of the essential clauses of the agreement, it will be sufficient to make a statement under oath in the sense that a lease relationship exists, in the understanding that the parties still may prove their claims to the court.
  • The following rights are provided for tenants (a) not to request more than one month’s advance payment; (b) not to demand bail or any real estate guarantee; (c) not to be subject to “arbitrary, illegal and/or forced evictions”; (d) to notify the court order to vacate two months in advance of the date of the eviction; (e) to have staff from specialized institutions present at the eviction so that they can provide assistance to vulnerable persons such as children, women victims of violence, indigenous people, immigrants, etc; (f) access to measures to avoid leaving people homeless, such as temporary shelters and incorporation into housing programs; and (g) should fortuitous cases arise, access to mediation for the modification of the terms of the agreement.
  1. In cases of national emergency, natural disasters, declarations of environmental, natural or health emergencies, or any other situation of force majeure that paralyzes economic activities and prevents the lessee from complying with the agreement, the lessee may request the temporary or definitive renegotiation of the lease agreement, in accordance with the provisions of Article 1796 of the Civil Code.

The Initiative has been strongly criticized for considering that, if approved in its terms, it would violate contractual freedom, allow housing tenants to stop paying rent, and violate the rights of landlords, such as the right to property, thus discouraging investment in the real estate sector. Activists involved in the drafting of the Initiative, for their part, have stressed out the need to encourage written leases to provide legal certainty for tenants.

We hope that the discussion of the Initiative in the Mexico City Congress will be carried out through a deep, measured, and unbiased debate. Furthermore, that it contemplates the participation of litigants and judges and other sectors, in order to avoid deficiencies that could negatively impact the effective implementation of the legal provisions. Finally, we propose to be incorporated into the discussion, the feasibility of implementing supports such as those referred to by the United Nations Special Rapporteur, both for homeowners and tenants.


Measures announced by the SCJN for its activities from june 1 to 30

In accordance with General Agreements 3/2020, 6/2020 and 7/2020 issued during March and April 2020, the Plenary of the Supreme Court of Justice (“SCJN”), decided to announce certain measures for mitigating risks related to the COVID-19 disease, including the declaration as non-working days from March 18 to May 31, 2020.

On May 26, 2020, the Plenary of the SCJN issued General Agreement 10/2020, which extends the suspension of jurisdictional activities until June 30, 2020, in the understanding that during such period terms will not elapse, however, the days and hours that may be necessary for the development of the activities with the purposes mentioned below, will be enabled electronically or remotely:

a) Provide on the suspensions requested in urgent constitutional controversies and the judicial actions necessary for the effectiveness of such measures.

b) To present the initial writs within the competence of the SCJN only electronically, using the FIREL or e.firma, and to generate the corresponding electronic files.

c) Continue with the electronic processing of matters regulated in the Amparo Act, constitutional controversies, unconstitutional actions in which laws of annual validity or, electoral regulations, have been challenged, and the appeals filed in those means of constitutional control settled before the SCJN, or the appeals filed against urgent constitutional controversies presented since March 18, 2020, that go beyond the matter of suspension, through the use of FIREL or e.firma.

d) To digitize the documentation and to integrate the electronic files for the matters mentioned in subsection c) above, to continue its processing electronically.

e) Provide through electronic means the matters mentioned in sub-sections b) to d), and for notifications to be effected by writing or electronic list, as appropriate, as well as electronically.

f) To effect the service of process ordered in the proceedings initiated electronically since June 1st, 2020, and by writing to the respective authorities the orders that admit “amparo under review” remedies filed before or after the date herein mentioned.

g) To hold remote hearings and appearances.

h) To provide on the matters listed or that may be listed for the sessions the Plenary or Chambers of the SCJN may hold remotely; to announce the decisions taken in those sessions by writing or electronic means; to sign electronically the relevant additions and votes; and to make available the drafts of the resolutions through electronic means.

i) To notify the legislative bodies, the judgments issued by the Plenary of the SCJN, in unconstitutional actions or constitutional controversies, should the effects of the declaration of invalidity are subject to such notification.

j) To conclude the completion of the matters decided before March 18, 2020, by the Plenary and Chambers of the SCJN, to sign them electronically and to notify them by writing or through electronic sign.

The deadlines for submission of requirements ordered during the month of June 2020, and for filling appeals electronically against such requirements, will restart or begin only for the party that files his submission electronically. In the case of orders admitting “amparo under review” remedies, the period for its challenge will start from the date of the effectiveness of the notification made by writing or electronic list.

The measures above mentioned intend that the SCJN carry out its activities during June with the necessary precautions to face the SARS CoV-2 (COVID-19) pandemic.


Jurisdiction of the courts of Mexico City, over commercial disputes, according to the value of the claim

Authors: Roberto Altamirano y Eduardo Reyes

Articles 59, 104 and 105 of the Organic Act of the Judicial Power of Mexico City provide that the courts of that entity with jurisdiction in civil and commercial matters are (i) Civil Courts of Written Process, (ii) Civil Courts of Oral Process and (iii) Civil Courts of Low Amount. In this regard, the Plenary of the Council of the Judiciary of Mexico City released at the ordinary session held on February 18th, 2020, the Agreement 40-09/2020, which specifies that starting January 26th, 2020, jurisdiction over commercial disputes shall be governed in accordance with the following:

1. The Civil Courts of Written Process may rule on (i) commercial executive proceedings concerning amounts over the sum of $4,000,000.00 (Four million pesos 00/100 M.N.), without considering interests and/or other accessories claimed at the filing date of the lawsuit, and (ii) matters under concurrent jurisdiction that cannot be economically quantified at the time the lawsuit is filed neither afterward, whose jurisdiction is not expressly allocated to the Civil Courts of Oral Process.

2. The Civil Courts of Oral Process may rule on (i) commercial executive proceedings that involve amounts under the sum of $4,000,00.00 (Four million pesos 00/100 MN), and equal or over the sum of $682,546,89 (Six hundred eighty-two thousand five hundred and forty-six pesos 89/100 MN), without taking into account the accessories claimed at the filing date of the lawsuit, and (ii) matters under concurrent jurisdiction that should be processed through a commercial oral proceeding, without limitation on the amount.

3. The Civil Courts of Minor Amounts may decide commercial executive proceedings in which the principal amount claimed is less than the sum of $682,546.89 (Six hundred eighty-two thousand five hundred and forty-six pesos 89/100 MN), as provided in Articles 1339 and 1340 of the Commercial Code -amount updated in accordance with the Agreement of the Ministry of Economy published in the Official Gazette of the Federation on December 30th, 2019, and the Agreement 36-47/2019 of the Council of the Judiciary of the Judicial Power of Mexico City-, without considering the accessories claimed at the filling date of the lawsuit.

In this manner, the Judicial Council of Mexico City clarified the jurisdiction of the judicial bodies for deciding commercial matters according to the amount involved.


The federal judiciary council announces new measures for the activity of the federal courts during the days of may 6th to 31st, 2020.

Through General Agreements 8/2020 and 9/2020, the Plenary of the Federal Judiciary Council announced the measures to be observed during May 2020, adopted for restoring the activities of the courts of the Federal Judicial Power in the context of the current situation of the health contingency generated by the COVID-19 virus. These measures are the following:

  1. Processing and resolution of urgent cases.

New matters that are considered urgent may be promoted physically or through the “online trial”, using the electronic signature, which is the Certified Electronic Signature of the Federal Judicial Power (“FIREL”) or the “e.firma” (called before as “FIRMA ELECTRÓNICA AVANZADA” or “FIEL”).

Jurisdictional bodies must follow up with the matters they classified as urgent after its filing.

In case that an urgent matter is physically promoted, the judicial staff will encourage the parties to continue the process through the “online trial”, as far as possible.

  1. Resolution of cases physically processed.

The resolution of the matters that have been processed in person will be resumed only when the emission of the final judgment or resolution is pending.

  1. Processing and resolution of cases presented through “online trial”.

The process and resolution of the matters that were presented through the “online trial” before the beginning of the health contingency will be reestablished, except those that require the physical presence of the parties for the holding of hearings, relief of proceedings, or the practice of personal notifications.

  1. Suspension of deadlines and terms.

There will not be procedural deadlines and terms, no hearings or proceedings will be held, in the case of (i) requests, demands, appeals, trials, and procedures in general, other than the cases mentioned above, and (ii) the appeals against the judgments and resolutions issued in physically.

  1. Urgent Cases.

General Agreement 8/2020 contains a non-limiting list of matters that must be classified as urgent, in particular the exercise of criminal action with a detainee, requests for a search warrant and the intervention of private communications, the qualification of arrests, links to process, extradition determinations, proceeding for the determination and execution of pre-liberal benefits and those relating from the Amnesty Law, protection against determinations on alimony, protection against determinations on precautionary measures in cases of domestic violence, protection related to acts that affect the superior interests of minors, precautionary measures in bankruptcy proceedings, and declarations of the non-existence of a strike.

In general, judges must classify a matter as urgent, considering the following: (i) the human rights object of the procedure, the significance of its eventual violation, and the consequences that may arise from postponing its procedure until the conclusion of the contingency, and (ii) the possible impacts on access to economic and social rights of groups and populations in a particularly vulnerable situation, such as rights related to their health.

  1. Ordinary sessions of the Collegiate Circuit Courts.

The session lists will be published timely on the website of the Federal Judicial Council.

The sessions will be carried out without the presence of the public, remotely, by videoconference, and will be stored and protected for subsequent consultation.

The meaning and observations of each Magistrate shall be stated in a report, as well as the characteristics of the session.

The parties may consult the register of the session once the resolution has been notified.

  1. Attention to cases in criminal matters additional to urgent ones.

In matters not classified as urgent, the jurisdictional bodies must: (i) process the decisions that do not require hearings, (ii) process the decisions that require hearings that imply danger to the life or integrity of people, seeking their release through videoconference, (iii) process the matters whose processing is integrated for its resolution, and (iv) practice the procedural actions that may be decided in writing and that allow the resolution of execution files.

Examples of these cases are requests for provisional release under bond and protection in which the seizure of the real estate that constitutes the home of the complainant.


Suspension of jurisdictional activities is extended

As a result of the Resolutions reached in the meetings held on April 13, 2020, the Supreme Court of Justice of the Nation, the Council of the Federal Judiciary, the Federal Court of Administrative Justice and the Council of the Judiciary of Mexico City, decided to extend the suspension of jurisdictional activities that were originally set up until April 19, 2020, declaring as non-working the days from April 20 to May 5, 2020.

This extension was made with the purpose to be consistent with the “Resolution declaring the epidemic disease caused by SARS-CoV (COVID19) virus, as a health emergency due to force majeure”, and the  “Resolution establishing extraordinary actions to attend the health emergency caused by the SARS-CoV-2 virus”, both published in the Official Gazette of the Federation on March 30 and 31, 2020, respectively, where the suspension of non-essential activities was ordered to take place from March 30 to April 30, 2020, for reducing the dispersion, transmission, disease burden, complications, and deaths, that may be caused by the COVID-19 virus in the national territory.

Considering that the public service for the administration of justice is an essential function, the authorities adopted the necessary measures to maintain the operation of the courts giving priority only to urgent cases. For example, in the Resolution of the Federal Judicial Council, are considered as urgent cases, the execution of arrest warrants or freezing of bank accounts and matters in which people health or physical integrity is endangered.

Finally, the Resolutions of the Supreme Court of Justice of the Nation and the Federal Court of Administrative Justice refers to the possibility of holding the sessions that may be necessary, remotely, through the use of technological tools.


Suspension of jurisdictional activities


Based on the provisions of Articles I, third paragraph, and IV, fourth paragraph, of the Political Constitution of the United Mexican States, which bind the Supreme Court of Justice of the Nation (SCJN) to take the necessary measures to protect the health of all people, and taking into account the risk implied by the health contingency derived from the COVID-19 virus, the Plenary of the SCJN, through General Agreement 3/2020, dated  March 17, 2020, ordered the suspension of all jurisdictional activities, in accordance with the following: (i) declared the days from March 18 to April 19, 2020, as inoperative on the understanding that during this period procedural deadlines will not apply, and (ii) enable the days and hours for admission of urgent constitutional controversies were suspension measures have been requested, in accordance with the provisions of article 282 of the Federal Code of Civil Procedures.


For preventing the spread of the COVID-19 virus, and following the World Health Organization recommendations, the Plenary of the Council of Federal Judiciary, through Agreement 4/2020, dated March 17, 2020, decided to suspend jurisdictional functions in the organs related to Federal Judicial Power (FJP), from March 18 to April 19, 2020. The latter implies in essence that: (i) the activities of the jurisdictional bodies of the FJP are suspended, (ii) procedural deadlines will not apply, (iii) no oral hearings or sessions will be held by the Circuits Plenaries, and (iv) only the jurisdictional bodies in guard for attending urgent matters will be exempt from this measure, working on a schedule from 9:00 to15:00 hours, always seeking to take preventive actions such as remote work and use of the technological tools that may be necessary.

As for the Federal Criminal Justice Centers, the FJP agreed to suspend the procedural deadlines distinct to constitutional ones, in the understanding that the non-urgent oral hearings will be rescheduled starting April 30, 2020. Urgent determinations are:

  1. a) Qualification of arrests.
  2. b) Relation to criminal process.
  3. c) Implementation and modification of precautionary measures related to preventive detentions.
  4. d) Extradition determinations.

In the same sense, during its ordinary session dated March 17, 2020, the Plenary of Mexico City Judicial Council, established in Agreement 39-142020, authorized the “Contingency Plan for the Judiciary of Mexico City”, which entails suspending the work and procedural deadlines from March 18 to April 20, 2020. Only the jurisdictional bodies in criminal matters and judges of the Accusatory Criminal Procedure System, including Justice for Adolescents, as well as the Unit for the Supervision of Precautionary Measures, Conditional Suspension of the Process, Judicial Management Units and Specialized Judicial Management Units will be exempt from the Agreement herein mentioned.


In compliance with provisions of the Agreement 3/2020 of the General Plenary of the SCJN and in accordance with the provisions of Article 65, second paragraph, of the Organic Law of the Federal Court of Administrative Justice, the General Plenary of the Superior Chamber of such jurisdictional body, also determined to suspend jurisdictional activities from March 18 to April 19, 2020, on the understanding that during these days may not apply  procedural deadlines.


Jurisdiction to resolve controversies arising under adhesion contracts used for providing banking services

Almost all the legal relationships between banking services providers and its clients, are governed by adhesion contracts, which the Federal Consumer Protection Law defines as the formats where the provider establishes in a unilateral manner, the terms and conditions applicable to the provision of the service, meaning that the users of such service, when entering into agreements with credit institutions, acquire certain rights and contract obligations, without being able to negotiate the terms and conditions applicable, since the clients simply adhere to the ones previously established by the bank services provider.

In the adhesion contracts used for providing banking services, the credit institutions include a clause with the appointment of the courts that shall have jurisdiction over the controversies arising under or in relation to such adhesion contracts. Usually, such adhesion contracts provides that the courts with jurisdiction will be the ones at the same place where the head office of the bank is located, provision that complies with the requirements foreseen in the Commerce Code for one of the parties to be expressly submitted to the jurisdiction of a court: (i) domicile of any of the parties of the contract, (ii) place where the contract obligations must be fulfilled, and/or (iii) the location of the object of the contract.

Notwithstanding the above, the Supreme Court has decided that in cases of adhesion contracts, the express submission of a bank services user or client, to a jurisdiction of certain courts, may not be enforceable, for ensuring bank clients an effective access to justice, in accordance with Article 17 of the Political Constitution of the United Mexican States, since such submission may imply unfair or inequitable treatment, as it forces users of bank services to travel to places distant from them –where a credit institution may have branches or representation offices– and thus, to incur in additional expenses in an unjustified manner.


The legislative failure in the matter of Quotidian Justice

On September 15th 2017, a decree was published in the Official Gazette of the Federation, reforming and adding articles 16, 17 and 73 of the Political Constitution of the United Mexican States, in the matter of Quotidian Justice. Essentially, the above mentioned constitutional reform consisted of (i) the obligation of the authorities to solve the disputes in a manner that procedural formalities do not hinder them to render a final judgment on the merits of each case (articles 16 and 17), and (ii) the powers of the Congress of the Union to enact a sole law in matters of civil and family procedure (article 73).

The transitory articles of the constitutional reform provide that the Congress of the Union shall issue the sole law mentioned above within a term of one hundred eighty days following the date of publication of the said decree, and in the same term, the amendments to articles 16 and 17 of the Political Constitution of the United Mexican States, must be incorporated in the general, federal and local legislation.

Notwithstanding that the one hundred eighty day term foreseen in the decree elapsed several months ago, neither the Congress of the Union nor the state legislatures have complied with the constitutional mandate.

The failure of the federal and local legislative bodies of the Mexican State, breaches the fundamental right of the persons to effective legal protection, and unreasonably allows that the current delay of the courts continues, thereby perpetuating the sense of impunity