More certainty or more litigation? The Court redefines how to challenge an arbitration clause

The Plenary of the Supreme Court of Justice of the Nation, in resolving the contradiction of criteria 74/2025, issued the jurisprudence with the heading “APPEAL. IT IS APPROPRIATE AGAINST THE JUDGMENT ISSUED IN THE ORDINARY COMMERCIAL TRIAL IN WHICH THE ACTION FOR NULLITY OF THE ARBITRATION AGREEMENT IS EXERCISED AND MUST BE EXHAUSTED PRIOR TO THE AMPARO TRIAL."with digital registration number 2032601, in which it determined that, when a party demands the nullity of an arbitration agreement through ordinary commercial proceedings based on article 1424 of the Commercial Code, the judgment issued is appealable and the appeal must be exhausted before filing for amparo proceedings.

The criterion resolves a contradiction between two Collegiate Circuit Courts that had held opposing positions: while one considered that the resolution on the nullity of the arbitration agreement was unappealable -applying the rule of article 1432 of the Commercial CodeThe other argued that, since it was an ordinary commercial trial, the judgment should follow the rules of that procedural route, including the appeal. The Court adopted this second position.

The case law was approved on August 20, 2026, published on September 4, 2026 and is mandatory.

One question, two different paths

The Commercial Code acknowledges that the validity of an arbitration agreement can be challenged, but it does not provide a single way to do so. Articles 1424 and 1432 regulate different legal scenarios, at different procedural stages, and with their own specific procedural consequences.

Article 1424 allows a party to bring a claim before a judge for the nullity, ineffectiveness, or impossibility of enforcement of the arbitration agreement. This is a legal action brought before the courts before the issue of jurisdiction has been raised and resolved by the arbitral tribunal, and it is processed as an ordinary commercial lawsuit.

Article 1432, on the other hand, operates within an arbitration that has already begun. According to this provision, the arbitral tribunal has the power to rule on its own jurisdiction, including the existence or validity of the arbitration agreement. This principle is known internationally as kompetenz-kompetenzThat is, the power of the arbitral tribunal to decide whether or not it has jurisdiction to hear the dispute. If the arbitral tribunal declares itself competent through a preliminary decision –before issuing an award on the merits-, the dissenting party may request, within the following 30 days, that a judge definitively resolve that issue.

The contradiction of criteria 74/2025 arose precisely because two Collegiate Courts treated these scenarios differently: one extended the rule of non-appealability of Article 1432 to a case in which the nullity of the arbitration agreement had been raised through ordinary commercial litigation pursuant to Article 1424, while the other distinguished between the two scenarios and held that, in the latter case, the rules specific to that procedure should apply, including appeal. The Supreme Court adopted this second interpretation and clarified that these are distinct mechanisms, valid but mutually exclusive, each subject to its own procedural rules.

Article 1424: ex ante judicial control

When a party decides to challenge the validity of an arbitration agreement before a judge, pursuant to Article 1424 of the Commercial Code, the claim is pursued through ordinary commercial litigation. Since this action is brought before a court, the procedure is subject to the rules governing that type of legal process.

One aspect that the Supreme Court expressly highlighted in Contradiction 74/2025 is that initiating this lawsuit does not imply that the plaintiff has unilaterally eliminated or modified the arbitration clause. The claim of nullity must be analyzed on its merits, with the evidence presented by both parties, and the opposing party will have the full right to defend the validity of the agreement.

Equally relevant is that initiating ordinary proceedings does not necessarily mean that the entire contractual dispute will be transferred to the courts. The Court reasoned that if other claims related to the contract exist and the defendant requests referral to arbitration pursuant to Article 1424, the judge must separate the litigation: refer the substantive issues of the contract to arbitration and retain jurisdiction only to rule on the validity of the arbitration agreement.

Simply put: a judge can review the validity of the arbitration clause while an arbitral tribunal resolves the underlying dispute. These are two procedures that can coexist, each within its own sphere of competence.

The direct consequence of this jurisprudence is that the judgment issued in this ordinary trial is appealable, and the appeal process must be exhausted before filing for amparo (constitutional protection). The principle of finality –That is, the obligation to exhaust ordinary means of defense before resorting to amparo (protection).– fully applies in this way.

Article 1432: competence and subsequent judicial review

Article 1432 of the Commercial Code regulates a different scenario: the arbitration has already begun and it is the arbitral tribunal that first rules on its own competence.

The principle of kompetenz - in Spanish, competition over one's own competition– is a cornerstone of international arbitration. It means that the arbitral tribunal has the power to decide whether it has jurisdiction to resolve a dispute, including whether the arbitration agreement that gave rise to it is valid. This prevents one of the parties from halting the arbitration simply by challenging the clause in court.

Pursuant to Article 1432, if the arbitral tribunal declares itself competent as a preliminary matter –That is, before issuing the award on the meritsThe dissenting party has 30 days to request a final ruling from a judge on the matter. While the judge decides, the arbitration may continue.

The key difference with Article 1424 is the appeals process: the judicial decision issued under Article 1432 is expressly not subject to appeal. This reflects the principle of minimal judicial intervention in arbitration: once the arbitral tribunal has ruled on its jurisdiction, judicial review is limited and no further ordinary appeals are permitted.

It is important not to confuse this provision with a “post-arbitration” review. Article 1432 operates after the arbitral tribunal’s preliminary ruling on its jurisdiction, but the arbitration may still be underway. It is a limited judicial review mechanism, designed to resolve the jurisdictional issue quickly without interrupting the arbitral proceedings.

What did the Supreme Court decide?

The Plenary of the Supreme Court of Justice of the Nation, by unanimous vote, resolved that against the sentence issued in an ordinary commercial trial that decides on the nullity of the arbitration agreement, based on article 1424 of the Commercial Code, the appeal is admissible, and this must be exhausted before promoting the amparo trial.

The Court confirmed that Articles 1424 and 1432 regulate different jurisdictional scenarios, and that the rule of non-appealability provided for in Article 1432 cannot be extended to ordinary commercial proceedings conducted in accordance with Article 1424. When the nullity of the arbitration agreement is discussed in court through ordinary proceedings, the judgment is governed by the rules that regulate that type of procedure.

Why does it matter? Risks and practical consequences

Case law is not just a technical matter regarding the admissibility of an appeal; it has direct implications for any company that has arbitration clauses in its contracts.

1. Obligation to exhaust the appeal before seeking amparo. When the annulment of an arbitration agreement is sought through ordinary commercial litigation (Article 1424), the judgment is appealable, and this remedy must be exhausted before seeking amparo (constitutional protection). If a party omits the appeal and directly files for amparo, the amparo will be dismissed for failure to comply with the principle of finality. This follows directly from the Court's ruling.

2. The risk of confusing the routes. The error that gave rise to the contradiction of criteria 74/2025 consisted precisely in applying the rule of non-appealability of article 1432 to a case that corresponded to article 1424. If a litigant confuses the rules of one path with those of the other –For example, if you assume that the judgment in the ordinary trial is not subject to appeal-, may miss the opportunity to file the correct appeal in time, with potentially irreversible consequences.

3. Impact on the times of the controversy. Submit the validity of the arbitration clause to a full ordinary commercial trial –with first instance, mandatory appeal and eventual protection– can significantly prolong the resolution of that issue. Although the arbitration on the merits can proceed in parallel, uncertainty regarding the validity of the arbitration agreement remains until all judicial remedies have been exhausted.

4. Define the strategy from the beginning. From the moment a dispute arises, it is important to define how the validity of the arbitration agreement will be challenged: through prior legal action pursuant to Article 1424, or within the arbitration itself pursuant to Article 1432, where the arbitral tribunal first decides on its jurisdiction and its decision can subsequently be reviewed by a judge. Each mechanism has different rules, timeframes, costs, and means of appeal.

5. Possibility of parallel procedures. According to the Court's reasoning, the judge can separate the litigation: ruling on the validity of the arbitration agreement and referring the substantive issues to arbitration. This means that a company could simultaneously face ordinary litigation regarding the arbitration clause and arbitration concerning the substance of the contract, with the associated costs, complexity, and uncertainty.

6. Prepare for an early challenge to the arbitration agreement. This criterion reinforces the importance of companies and their advisors having a clear strategy from the earliest stages of a dispute. If an opposing party challenges the validity of the arbitration agreement in court, it will be necessary to immediately assess how to defend the clause, whether to request that the substantive issues be referred to arbitration, and how to coordinate both proceedings if they are running concurrently.

Consequences 1 to 3 follow directly from the Supreme Court's decision. Consequences 4 to 6 are practical and strategic inferences that can be drawn from the ruling, even though the Court did not expressly address them.

Parallel proceedings and possible strategic use of the judicial route

This section deserves careful consideration. Case law does not endorse or promote dilatory tactics; however, from a practical perspective, it is necessary to point out that this criterion confirms a procedural scenario that, from a practical standpoint, can be strategically used by a party reluctant to arbitrate.

By confirming that the dispute over the validity of the arbitration agreement can go through all the stages of ordinary commercial litigation –first instance, appeal and eventually amparo-, there is a risk that a party reluctant to arbitrate may use the legal action for annulment as a tool to prolong the discussion about the arbitration clause, generate procedural pressure or increase costs for its counterpart.

It is important to consider two points. First: Article 1424 of the Commercial Code expressly establishes that arbitration proceedings may be initiated or continued, and an award may even be issued, while the judicial matter is pending. Therefore, the risk is not the automatic suspension of the arbitration, but rather the coexistence of proceedings, the duplication of costs, and the uncertainty generated by having an arbitration underway while the validity of its foundation—the arbitration agreement– remains the subject of legal dispute.

Second: initiating a nullity proceeding does not guarantee a favorable outcome. The opposing party may defend the validity of the arbitration agreement, and the court will analyze the substantive claim with the corresponding evidence. However, the mere act of initiating the proceedings –with its instances, times and costs– may be enough to generate a procedural or negotiating advantage.

Given this scenario, companies that rely on their arbitration clauses must be prepared to face these types of contingencies and have a response strategy that considers both defending the clause in court and continuing the arbitration on the merits.