The Mexican legal system treats differently disputes with respect to civil contracts (those executed by and between individuals) and disputes regarding administrative contracts (those executed by and between an individual and the public administration). A challenge to an administrative contract follows special rules relevant to the jurisdiction depending on the type of administrative act performed during the execution of a contract.
Until 2018, when the act (or omission) to be challenged in an administrative contract was lack of payment, the courts empowered to resolve the dispute were, like in a private contract, the civil or commercial courts.
However, in June 2018, Second Section of the Mexican Supreme Court of Justice issued a criterion changing the way to demand payments derived from administrative contracts, especially those governed by the Public Works and Related Services Law and the Acquisitions and Leasing for the Public Sector Law. The criterion stated that lack of payment in administrative contracts cannot be separated from the nature of the conduct that caused the breach, which is administrative. As a consequence, a claim of breach for nonpayment was required to be brought in the administrative forum.
The judicial criterion changed the paradigm, forcing civil and/or commercial judges to reject these claims immediately, generating delays in such cases. Contractors were forced to bring several actions in order to force the administrative forum to issue a position regarding the provenance or non-provenance of the payment claim.
According to the judicial criterion, only when this situation arose or when the silence of the contracting authority creates a right or denies it, does the Contractor have a right to bring a claim before an administrative forum, which is quite different from the civil or commercial courts. As can be inferred, to get to the point that the individual is in a position to file a lawsuit, takes much longer.
Several litigators, including the author, believe that the judicial criterion is unfortunate because of, among other reasons, the issue related to time.
However, a more recent criterion (published February 19, 2021) declared the non-applicability of the previous one for contracts executed under the Mexican Petroleum Law (Law of Pemex). Under this law, it is stated that the civil and commercial principles of law are interchangeably applicable and the relationship between an individual and Pemex, when the relationship derives from a contract governed by the Law of Pemex, has a commercial nature.
This recent criterion is important because it signals a change affecting the commercial nature of the contracts ruled by laws like the Law of the Federal Electricity Commission (Law of CFE), which contains similar provisions regarding the interchangeable applicability of the commercial and civil principles to such law.
Also, the recent criterion resumes the old practice regarding the way to make a payment claim – at least payments derived from the contracts executed by and between Pemex and CFE – allowing litigators to submit payment claims directly to the civil or commercial courts as a civil lawsuit.
The foregoing will help the individual contractor in, at least, two ways. First, it gives the contractor the security that its claim can be brought as a civil lawsuit, having the opportunity to sue the contracting authority when appropriate; and second, it expedites resolution of payment disputes by allowing easier access to civil or commercial Court.
Presumably, the Mexican Judicial System will resume the old criterion regarding the appropriate way to claim the payment of administrative contracts, which means that the way to claim payments in administrative contracts will be by commercial trials. However, as of today, it will be necessary to attend to the specific law that governs the corresponding contract.
Author Juan Pablo Sandoval García is an Associate at COMAD, S.C. (www.comad.com.mx). His email address is firstname.lastname@example.org.