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In brief

On 7 April 2022, the Supreme Court of Justice of the Nation (SCJN) resolved the matter1 of unconstitutionality, filed by a parliamentary group of the Senate, against the modifications to the Electric Industry Law (“Law“), published on 9 March 2021.

The precedent created by the resolution of the unconstitutionality action by the SCJN, could be relied upon by the District Courts and the Collegiate Courts when ruling in amparo trials.


Key takeaways

The modifications to the Law may cause material effects on the activities of the members of the wholesale electricity market once the suspension in which they are today is lifted, for which we consider that an analysis of said effects should be carried out, and on the moment in which the affectation can be demonstrated, within an amparo trial.

In this regard, it is important to remember that the transitory regime of the modifications to the Law establishes clear deadlines so that the various administrative authorities, within the scope of their respective attributions and powers, make the corresponding modifications, with the purpose of providing certainty in the form and terms of its implementation.

For this reason, we consider that the means of challenging its unconstitutionality is through the amparo trial.

In depth

The Mexican Constitution provides the right to file an action claiming unconstitutionality2, as a tool to invalidate under the Mexican legal system, definitively, and with general and immediate effects for all citizens, a law, or set of regulatory articles that, in its opinion, result unconstitutional. A qualified majority of eight (8) of the eleven (11) Members of the Plenary of the SCJN is required to proceed with said action of unconstitutionality.

In this regard, the amendments to the Electricity Industry Law, published on 9 March 2021, were not declared unconstitutional, due to failing to meet the qualified majority. As a result, said amendments were not definitively nullified from the Mexican legal system, and the action [64/2021] claiming unconstitutionality was dismissed.

However, based on the analysis of the voting sessions, and the discussion on the issue of constitutionality of each of the articles included in said amendment to the Law, the simple majority of the Plenary has considered that certain articles are in fact unconstitutional, creating precedent that would be taken into account by the District Courts and the Collegiate Courts at the time of deciding and ruling on the individual amparo lawsuits already filed and that are still pending resolution.

Said precedent could also be taken into consideration for those participants of the electricity industry who, at the moment in which the modifications to the Law come into force, claim a particular harm. Based on this, we recommend that the legal recourse for challenging the unconstitutionality of these modifications, is through an amparo trial.

Due to the foregoing, we suggest our clients develop a comprehensive strategy that not only includes the suggested approach of challenging the modifications. We also recommend developing commercial alternatives regarding your company’s projects, and based on regulatory strategies and your corporate profile.Should you wish to discuss this matter in more detail, please do not hesitate to contact us for any questions or services regarding this matter.


1 Action number, 64/2021
2 the law, or set of articles under the law are not in accordance, or in agreement, with the constitution of the country

Author

Marco Nieto Vázquez is a partner in Baker McKenzie's Energy, Mining & Infrastructure Industry Group in Mexico City. He has over 17 years of international consulting experience in the private sector, the Mexican public sector, and international energy-related organizations. He has also served as an external consultant to the International Atomic Energy Agency, leading professional missions for some Central and South American governments on issues of energy modelling and planning and was part of the Energy and Infrastructure team in PwC in Mexico.

Author

Jorge has 17 years of professional experience and is a partner of Baker McKenzie's Tax Practice Group. He joined the Firm in 2003. He is experienced in tax litigation, administrative, legal protection, and tax planning, since he has broad experience in the constitutionality of tax laws and taxpayers' defense against the actions of the tax and administrative authorities in the exercise of their review and enforcement powers. Before joining the Firm, Jorge was an in-house lawyer in GNP (Grupo Nacional Provincial, S.A.) and was an auxiliary attorney for the Seventh Civil Judge in the State of Nuevo Leon.

Author

Benjamín Torres leads Baker McKenzie's Energy, Mining & Infrastructure (EMI) Practice Group in Mexico. He joined the firm in 1998. He is recognized as "Highly Regarded Lawyer" by IFLR, and is also listed as a recommended lawyer by Who’s Who Legal for oil, gas, and project finance in Mexico. He is recognized as one of the country's leading lawyers in the energy and natural resources area (Band 1) by both LEGAL 500. For several years, he has been acknowledged by the magazine Petróleo & Energía as one of the top 100 leaders in Mexico's energy industry and he currently serves in its Editorial Board. Additionally, in 2021, Benjamin was awarded the recognition of "Stand Lawyer" during the Stellar Performance Stand Out Talent Survey of Acritas and Chambers Latin America. Benjamin is the President of the Energy Committee in AmCham Mexico. In addition, he has lectured for the Energy and Sustainability Law Masters Degree at Universidad Autónoma de Nuevo León and taught Energy Law classes at Universidad Autónoma de Ciudad Juarez and Business Law at ITESM Campus Ciudad Juarez. He has served at the Energy Editorial Boards of Reforma and Norte newspapers, and is a member of Potentia (private oil and energy business club). He is also a member of the Advisory Board of GRI, Chair of the Mexican Chapter of ISME (International Society for Mexican Energy) and a member of Association of International Petroleum Negotiators (AIPN).

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