- Wave of non-compliance follows pressure from Russia-NATO restrictions on supply chains.
- It will be very damaging to those who have not prepared themselves with a legal warfare kit.
CDMX, April 21, 2022. “We have not yet measured the impact that the war between Ukraine and Russia and NATO restrictions will have on Mexican companies,” said Roberto Fernandez del Valle, partner in charge of the law firm's disputes area Santamarina and Steta. “What is very clear is that there is a significant impact on supply chains, which will become more pronounced in the coming weeks. This will be added to the closure of markets due to the pandemic, economic crisis, widespread global inflation and shortage of raw materials due to economic restrictions on both sides of Russia, Europe and the United States. People are not going out to work, companies are inactive, ports and several ships are stranded,” he claimed.
The expert explained that those who receive inputs in their supply chains, such as sectors like construction and automotive, will be immediately affected by increases in the price of steel, fuel and many other raw materials and strategic inputs. Consequently, they will incur delays and an unexpected increase in prices. This is how a climate of non-compliance is being triggered.“It will be very damaging for those who have not prepared themselves with a legal war kit that allows them to foresee this situation in their contracts, resolve their disputes and move forward,” clarified.
Roberto Fernández del Valle listed the main actions to be taken so that Mexican companies can better navigate the new economic and commercial conditions in the world:
1.- Review contracts in light of the situation of potential clients, suppliers and materials from abroad.
2.- Calculate risk scenarios in production logistics, times and delays in the delivery of raw materials and supplies.
3.- Calculate and predict the consequences of non-compliance by each and every part of the supply chain.
4.- Assess the consequences of the company itself falling into non-compliance with third parties. Calculate the cost of compensation, fines, etc.
5.- Conduct a general check-up of the company to avoid additional domestic complications.
6. Define in detail the measures to be taken in each case and the legal means for resolving disputes.
The specialist stressed that, so far, Mexican companies in general have entrenched themselves and are not moving, waiting for the general business outlook to improve. However, he predicted that those that move forward and tackle the legal consequences of noncompliance in the early stages will have the best luck. To this end, he stressed that there are several alternative legal mechanisms that avoid going to courts which, due to saturation, will resolve in a prolonged period of time, which can be serious for everyone. Among them, he pointed out the dispute resolution panels, which resolve differences on the spot, and other options such as arbitration.
Mexico City Office
Tel. +52 55 5279 5400
Monterrey Office
Tel. +52 81 8133 6000
Queretaro Office
Tel. +52 442 290 0290
