Advantages of the Contractual Agreement of a Conventional Commercial Procedure before Judicial Courts

• Nowadays, there is a need to resolve commercial disputes before the courts in an increasingly agile, rapid and efficient manner.
• The Conventional Commercial Procedure (“PCM”) is a means to ventilate and decide controversies arising from a commercial act both before Judicial Courts and before an arbitrator, with the main characteristic that it is designed by the parties as opposed to those contemplated in the legislation.
• The advantages of a PCM contractual agreement before the Courts of Justice are mainly focused on the simplification of a process and benefits the protection of confidential information.  

In Mexico, it is a well-known fact that the Courts that process Commercial Trials, both at the Local and Federal level, are saturated with workload for different reasons, which causes significant delays in the administration of justice.[1].

Likewise, the above is increased in the current context of the Labor Strike of the Judicial Branch of the Federation in protest of the so-called "Judicial Reform" of the Federal Constitution, which we at Santamarina + Steta, SC have analyzed in another publication that we invite you to consult.[2].

Likewise, in the applicable commercial procedural legislation, that is, the Commercial Code, procedures are established that, sometimes at the discretion of those governed, generate practical complications and a considerable investment of time.

An example of this is the summons to trial in a procedure, since when a commercial claim is admitted, a considerable investment of time is required for the management of the notification in the traditional method contemplated. Basically, it consists of an official, called a judicial attorney, personally going to the defendant's address. A dynamic that not only involves time, but takes even longer if the opposing party is no longer located at the address considered there.

In contrast to the above, there is a clear and growing need for people engaged in commerce to have access to some judicial procedure to resolve their disputes in an agile, rapid and efficient manner. As well as, to the extent possible when involved in a judicial process, to protect their personal information.

Therefore, it is relevant to consider, as part of a solution to the aforementioned problems in a judicial process, the contractual agreement of a conventional commercial procedure to resolve commercial disputes between parties.

Definition and requirements

The PCM is a means to ventilate and decide disputes between parties on the occasion of an act of commerce, regulated in articles 1051 to 1054 of the Commercial Code, in which the parties are empowered to freely agree on a procedure and rules that govern their actions before judicial courts or an arbitration procedure.

In the PCM agreement, the parties may freely design a procedure other than those contemplated in the Commercial Code, with rules adapted to their preference, even with respect to past, present and future disputes.

The above only under the limitation of respecting the essential formalities of the procedure, which in summary are: i. notification of the procedure; ii.  opportunity to offer and present evidence; iii. opportunity to argue; and iv.  the issuance of a judgment that resolves the differences; as well as the requirement that said agreement be recorded in a public deed before a Notary Public or a policy before a Public Broker.

Notable advantages of the PCM before Judicial Courts

• For the purposes of the procedure, the parties are empowered to agree to exclude any means of evidence.

This can be beneficial, for example, in preventing people from not testifying, refraining from providing confidential information even when requested by one of the parties, such as accounting books and tax returns.

It would also be possible, for example, to limit the number of expert evidence presented, such as reducing it to just one expert, even identifying who it would be from the agreement (instead of the traditional three).

• The parties may modify the terms and deadlines to be followed during the trial (for example, making them shorter than those provided for by law).

• The parties may modify or waive the legal remedies provided for in the regulations during the course of a procedure (provided that the essential formalities of the procedure are not affected).

• It is possible to make notifications by email in a PCM, including the summons to trial, after the Judge has confirmed, through the respective public servants, its remittance and/or receipt (Jurisprudence with registration 2019966).

Conclusions

Therefore, the contractual agreement of a PCM before judicial courts, under a clause wording that meets the aforementioned requirements, benefits in the simplification of a judicial process and can protect the confidential information of the parties.

Although the agreement of a PCM before Judicial Courts is not yet common in contracts, it is not ruled out that in the near future its use will become more frequent and to the extent that merchants become aware of its convenience, given that it represents part of a solution to the problems indicated in the introduction of this article,

Likewise, it is important to mention that even when there is a clause on a PCM in a contract, there is still the possibility of challenging its validity by the parties, either due to defects inherent to the contract or due to the violation of the essential formalities of the procedure, via an incidental route and without suspension of the main trial.

Finally, for more information on the Conventional Commercial Procedure, we invite you to contact our experts.

[1] https://animalpolitico.com/politica/reforma-poder-judicial-jueces-rezago-expedientes

[2] https://www.santamarinasteta.mx/publicaciones-y-eventos/articulo/reforma-al-poder-judicial-retos-estrategias-para-su-implementacion/?utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-93KkXmm9QIsn9Zf_X30cM0qROtnv8-GoEJk4-PK5tCB_UAOJvB8OGpTZX1P5eFDv3n2su8