Mexican Judicial Reform Shifts Investment Treaty Risk for Foreign Investors
In-house counsel for companies with existing or planned Mexican investments must act because recent judicial reform changes reduce the reliability of bilateral investment treaty protections and dispute resolution avenues for cross-border operators.
Recent amendments to Mexico’s judicial reform framework modify the scope of protections available to foreign investors under bilateral investment treaties, including new restrictions on local court jurisdiction and admissibility requirements for treaty-based dispute claims. These changes undermine the reliability of existing treaty recourse for investors facing regulatory actions, expropriation, or contract breaches tied to Mexican operations. In-house counsel for companies with current or planned Mexican investments should review existing investment structures, update treaty election clauses in cross-border agreements, and assess supplemental risk mitigation tools such as political risk insurance to address gaps in protection left by the reform.