On December 2, 2022, case decision 1a./J. 134/2022 (11a.) of the First Chamber of the Supreme Court of Justice of the Nation was published in the Semanario Judicial de la Federación. The legal decision establishes that commercial proceedings may be used to resolve disputes arising from lump sum construction contracts provided for in the Civil Code, entered into by companies engaged in construction and whose purpose is to perform works directly related to their corporate purpose.

Similarly, on November 19, 2023, case decision 1a./J. 170/2023 (11a.) of the First Chamber of the Supreme Court of Justice of the Nation was published in the Semanario Judicial de la Federación, establishing that commercial proceedings may be used to resolve disputes arising from a real estate lease contract when it is possible to conclude that such contract constitutes an act of commerce, that is, it is carried out for commercial speculation related to its corporate purpose.

It should not be overlooked that the procedure is a requirement that constitutes a matter of public order that must even be studied ex officio by the judicial courts since it is an institution of the concept of effective jurisdictional protection. Non-observance of the procedural path would entail, therefore, a violation of the guarantees of legality and legal certainty. When we speak of a procedure, we refer to the type of procedure and the procedural rules that must be followed for the processing of a certain action.  Article 1049 of the Code of Commerce establishes that the purpose of the commercial procedure is to air and decide disputes arising from commercial acts, as defined in Articles 4, 75, and 76 of the same law.

Previously, the fact that the lease contract and the lump sum construction contract were not included in the catalog of Article 75 of the Code of Commerce, in addition to being regulated by civil law, had resulted in decisions where it was concluded that the appropriate remedy was the civil one, resulting in multiple procedural exceptions where the parties argued about the appropriate remedy before even being able to begin the discussion on the merits of the dispute that brought them before the courts.

The jurisprudence theses detailed in the first paragraphs of this document are of great relevance since they resolve the parameters to determine the appropriate remedy for disputes regarding lease agreements and lump sum construction contracts, which must be analyzed on a case-by-case basis. That is to say, the civil nature of these contracts is not immutable and they may acquire the character of commercial acts, subject to their resolution in the commercial courts.

When analyzing the applicability of commercial proceedings to resolve disputes arising from lump sum construction contracts, the First Chamber determined that it must first be determined whether or not the contract constitutes an act of commerce, specifying that:

• Commercial legislation provides for objective acts of commerce and subjective acts of commerce. Objective acts are those listed in the Code of Commerce (Article 75), while subjective acts are those resulting from the obligations of a merchant, which are presumed to be commercial due to the profession of the merchant performing them.
• Article 75, section VI, considers "construction companies" to be commercial entities. The First Chamber clarifies that what must be considered acts of commerce are the legal acts performed by legal entities engaged in construction.
• Article 75, section VI, has an objective character. As a consequence, not every act performed by a construction company will automatically have the character of an act of commerce, but only those acts that the companies perform in direct compliance with their corporate purpose, that is, that are related to construction.

Having said the foregoing, a lump sum construction contract will have the nature of an act of commerce - and therefore the commercial proceeding will apply - to the extent that it is entered into by merchants engaged in construction as a commercial activity.

When analyzing the appropriateness of the mercantile proceeding to resolve disputes arising from real estate lease agreements, the First Chamber determined that it must first be determined whether or not the contract constitutes an act of commerce, specifying that:

• The list of acts of commerce outlined in Article 75 of the Commercial Code is merely enunciative, not limitative.
• Section XXV of Article 75 of the Code of Commerce references as acts of commerce (i) those expressly provided for in the Code of Commerce and, (ii) the analogous acts that are carried out for commercial speculation, regardless of the nature of the contracting parties.

Having said the above, although the leasing of real estate is not expressly provided for as an act of commerce in the aforementioned article, the fact is that, if it is carried out for commercial speculation, it does constitute an act of commerce,[1] and therefore the commercial proceeding will be applicable.

From the aforementioned considerations, it is concluded that disputes arising from acts of commerce must be settled in commercial proceedings, understanding as such those acts that, regardless of the quality of the contracting parties, are expressly provided for in the Code of Commerce (e.g., construction/construction contracts by legal entities engaged in construction) or that, without being so, were entered into for commercial speculation (e.g., lease contracts with the direct purpose of commercial speculation).

The above case law provides certainty to the parties to a potential dispute arising from a lease or construction contract concerning the criteria to be adopted to determine the type of procedure to be followed to have their dispute resolved by the competent courts.

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[1] The First Chamber has defined legal acts whose purpose is "commercial speculation" as those whose direct object is commercial traffic, i.e., their direct purpose is to subsequently transfer the ownership of the property to a third party or to profit as a consequence of the legal act. The First Chamber has alluded to the interpretation of the expression "commercial speculation" concerning the ordinary activities of the person who exercises the act of commerce, that is to say, it is a determining factor to habitually engage in certain types of legal acts. See Contradiction of Thesis 170/2014 and 172/2023, both of the First Chamber.

This content was prepared by Alfonso López-Lajud ([email protected]); Diego Gómez-Haro Katznelson ([email protected]); Rafael Villamar-Ramos ([email protected]); Verónica Esquivel-Patiño ([email protected]); Alfredo Villarreal-Hansmann ([email protected]); Carlos Yunes-Gordillo ([email protected]); José Francisco Pamanes-Cantú ([email protected]) Oziel López-Garza ([email protected]) y Rodrigo Medrano-Treviño ([email protected]).