The Rule of Law: Mexico's Approach to Expropriation Disputes in the Face of Investment Globalization


A new constitutional design is emerging in Mexico to address investment and expropriation disputes. Assurance of the rule of law, understood as independent legal process to resolve disputes, is a key element. Although the rule of law assumed growing importance as Mexico’s historical expropriations progressed, questions persisted as to its effective application. Mexico’s opening to global competition for investment in the 1990s demanded a greater basis for trust in such application. Mexico accordingly provided by treaty to defer investment and expropriation disputes with treaty country investors to binding international arbitration. To address rule of law concerns more broadly, Mexico reformed its Constitution in 1994 to increase its federal judiciary’s independence. More recently, federal judicial review has benefited from the Mexican Constitution’s increased rigidity consequent to the fading of single party rule. Recent cases, including the resolution of the Metalclad international arbitration, the Supreme Court’s declaration of the constitutional position of treaties relative to legislation, and the Court’s resolution of a constitutional dispute between Congress and the President with implications for private investment in the electricity sector, delineate the emerging design and associated, innovative judicial doctrine.

About the Author

Ph.D European University Institute, J.D. Harvard Law School, DEA Universite de Lyon II, laurea in giurisprudenza Universita di Bologna, B.A. Harvard College. Lecturer in law, UCLA Law School; partner, Manatt, Phelps & Phillips, LLP.

By uclalaw