Mexican Supreme Court's controversial decision on power sector

On April 7, 2022, the Mexican Supreme Court of Justice held a plenary meeting to discuss whether the amendments to the Electric Industry Law (Ley de la Industria Eléctrica or LIE) submitted by the President and approved and published by the Mexican Congress in March 2021 (the LIE amendments) are constitutional or not.

According to applicable law, the Supreme Court may only issue a general declaration of invalidity of a legal provision if such invalidity is approved by a qualified majority of at least eight or more of the court members. 

The LIE amendments introduced changes to nine articles of the LIE as well as five transitory provisions aimed at, among others, modifying key dispatch and competition principles in the electric industry. The LIE amendments were challenged before the Supreme Court by a group of senators claiming that such changes violate the free competition, sustainability and no retroactivity principles set out in the Mexican Constitution.
While seven out of the 11 members of the Supreme Court voted for the invalidity of most of the articles modified by the LIE amendments, the qualified majority required to declare a general invalidity was not achieved. 

This does not mean that the LIE amendments have been declared valid by the Supreme Court. Instead, it means that the Supreme Court was not able to issue mandatory criteria to be followed by lower-hierarchy courts. In this sense, the District Courts and Collegiate Courts that are currently reviewing the constitutional challenges (amparos) filed by industry participants and other interested parties against the LIE amendments may apply their own criteria when resolving such amparos.