Introduction
A couple of years ago, I was asked to a look at the possibility of enforcing a U.S. Judgment derived from a verbal Joint Venture between a Mexican National and a Citizen of the United States.
Unfortunately, I had to break the news: The Judgment was unenforceable. The problem was an issue of jurisdiction --in my opinion, the action was in personam, and therefor, Mexican Procedural provides that in these kinds of actions, you have to sue the defendant before the courts with jurisdiction in his own domicile. Because there was no written contract, there obviously no written clause designating U.S. Courts as those having jurisdiction over the case.
Another problem with the case was the fact that the Plaintiff had not served Defendant in Mexico, in a manner consistent with local laws, or under the Hague Service Convention, or the Interamerican Convention on service of Process. What should you look for when suing a Mexican Plaintiff?
Because Mexico has 32 States, a Federal District, each with its own Procedural Codes, in addition to a Federal Code of Procedures and Chapter in the Commerce Code discussion enforcement of judgments, I will discuss the rules on enforcement as principles, meaning the commong rules found in each of these codes.
Jurisdiction, Jurisdiction, Jurisdiction....
Yes. It may seem obvious, but I've seen many cases where the last thing the US lawyer looked at was whether the jurisdiction the US Court had was one that Mexican Courts consider adequate. Under Mexican rules of procedure, a Court may have jurisdiction in the place where performance was due under a contract, thus excluding tort cases because of their extracontractual nature. In these cases --and absent a contract--, you have to sue a Mexican defendant before the Courts in Mexico.
Mexican principles of procedural Law state that if the parties make a contract that includes a choice of court clause, it must satisfy the following requirements for it to be effective: 1) the choice of court has to be: a) either the place of business of the Plaintiff or of the defendant; b) place of performance of an obligation due under the contract; 2) The clause must include a waiver to the parties rightsto their court. Absent this"language", you will probably get jurisdiction, but you may not get a judgment that is worth the paper it is written on.
Sometimes, --more often that you imagine--, a Mexican defendant will rush to a U.S. and will not make a special appearance, and simply responds. In this case, it would be understood that the defendant has submitted himself to the jurisdiction of the foreign court. In a case I was involved with to recognize a foreign judgment, the defendant not only appeared after being deffectively summoned, but he filed a counterclaim, making it hard to argue that the US Court had no jurisdiction.
The Checklist: Things that a Mexican Court Will Look at to Determine whether it will or will not enforce a Foreign Judgment.
Under Mexican principles of procedural Law, a Mexican Judge will consider the following:
i) How was the defendant served? It comes down to a question of international due process.I have seen cases in Tijuana where lawyers in San Diego paid process servers to cross the border into Mexico, and serve defendants. This method is completely invalid under Mexican rules, and in the end, a judgment obtained in this manner may not be enforceable. If you need to serve a Mexican defendant, you can use either The Hague or the Interamerican Conventions on Service of Process, but I srongly suggest you also rely on the Federal Civil Code of Procedures which allows for an attorney in Mexico file the request before the local court to process the Letter Rogatory. Otherwise, you could be looking at a couple of months before you get a lawsuit served.
i) That the action was not in rem. In a nutshell, if the case involved foreclosing on property that was secured in Mexico (mortgage, chattel), it will not be enforced. It's enforcement will also be denied if the foreign judgment declared a person the owner of a piece of property in Mexico.
iii) That the judge had jurisdiction. As stated above, the options are a) a contract including a jurisdiction clause with "magic language"; or b) performance of the obligation the breach of which was the basis for the action was due in the foreign country. Another option is a defendant voluntarily appearing before a foreign court, failing to contest the foreign courts jurisdiction.
iv) That the lawsuit is not pending in Mexico. This is the lis pendens exception, and basically, it means that a foreign judgment will not be recognized in Mexico if the same dispute is pending before a Mexican Court.
Conclusions
First and most importantly, if you plan to file a lawsuit against a Mexican defendant in a foreign court, be sure to get the advice of Local counsel, to be sure that the foreign courts assumption will be recognized in Mexico. Local counsel may be able to provide assistance in effecting service, in a manner that is quicker than going through the diplomatic route, but it the end, it will increase the possibilities of getting your judgment recognized.
