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Arbitration and the public policy exception in Mexico : local exceptions to global standards Cedillo Corral, Erika Marcela 2017

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 ARBITRATION AND THE PUBLIC POLICY EXCEPTION IN MEXICO: LOCAL EXCEPTIONS TO GLOBAL STANDARDS  by  Erika Marcela Cedillo Corral  LL.B. (Honours), Tecnológico de Monterrey, Campus Estado de México, 2001  Master of Administration with specialty in Corporate Law and Finance, Universidad Humanitas, 2006   A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF  DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE AND POSTDOCTORAL STUDIES (Law)  THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver)   December 2017    © Erika Marcela Cedillo Corral, 2017   ii Abstract  This dissertation examines the tension between globalization and local legal contexts by reference to the interpretation in Mexico of the public policy exception in the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Globalization has promoted convergence of legal norms and institutions that materialize in international conventions and organizations to facilitate trade. This has forced states to adopt global standards and reform their legal systems to effectively participate in the global trade arena. However, the effects of these dynamics on local legal systems are often disregarded or not considered.   This dissertation demonstrates that the interpretation and implementation in Mexico of the public policy exception under the New York Convention reflect the impact of local legal arrangements on globalized standards. Additionally, it reveals that a pluralistic approach to this exception advances a more inclusive perspective for the implementation of globalized standards while at the same time offering certainty. A pluralistic approach to the public policy exception creates a space to acknowledge and honor the diversity of legal systems coexisting globally and legitimizes local approaches to public policy. Accordingly, local legal systems do not need to import foreign definitions but can define their interpretation of public policy from within by using their local elements   Using historical, doctrinal, documentary, and qualitative analyses, this study examines the development of international standards, by reference to the public policy exception, and Mexico as an example of a local legal context. For examining local contexts, this study suggests the use of four factors –language, legal tradition, legal context, and legal culture– to understand the local approach to public policy in combination with relevant local elements. In the case of Mexico, the relevant elements examined are legislation, scholarship, court precedents, cases, and the perspective of local legal actors. These factors and elements are used to suggest components to establish a guideline for the interpretation and implementation of the public policy exception in Mexico.      iii Lay Summary  This dissertation examines how the local legal context of a country affects the implementation of international rules established in international treaties or conventions. It explains this tension using the interpretation and implementation in Mexico of the public policy exception established in the New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards. The exception of public policy protects the fundamental principles of a legal system. Instead of importing definitions from other legal systems or from international documents, this study suggests that each country’s interpretation of the concept ‘public policy’ should be equally recognized. This study suggests using four factors (language, legal tradition, legal context, and legal culture) and relevant elements of the local legal context (legislation, legal literature, decisions from the courts and the opinion of local legal actors) as a framework that countries can use to establish their local definition of public policy.   iv Preface  This dissertation is an original intellectual product of the author, Erika M. Cedillo Corral.   The list of court precedents was created using a public database from the Mexican Supreme Court of Justice, the Federal Judicial Weekly (Semanario Judicial de la Federación). The classification and analysis are an original work of the author.  The interviews reported in different parts of this dissertation were conducted with the approval of the UBC Behavioural Research Ethics Board. The certificate No. H12-00340 was issued on April 2, 2012.  The data obtained from the interviews done for this project was used for the following publication: Cedillo, Erika, “The Impact of Mexico’s 2011 Human Rights Constitutional Amendment on Arbitral Practice: A View from Local Actors” in Ljiljana Biukovic and Pitman Potter, eds, Local Engagement with International Economic Law and Human Rights (Edward Elgar Publishing, May 2017)   v Table of Contents   Abstract .......................................................................................................................................... ii Lay Summary ............................................................................................................................... iii Preface ........................................................................................................................................... iv Table of Contents ...........................................................................................................................v List of Tables ................................................................................................................................ ix List of Figures .................................................................................................................................x List of Abbreviations ................................................................................................................... xi Glossary ....................................................................................................................................... xii Acknowledgements .................................................................................................................... xiv Dedication ................................................................................................................................... xvi Chapter 1: Introduction ............................................................................................................... 1 1.1 Researcher position ...................................................................................................... 7 1.2 Organization of chapters .............................................................................................. 8 1.3 Data analysis .............................................................................................................. 12 1.3.1 Mexican court precedents ................................................................................. 12 1.3.2 Interviews with local actors .............................................................................. 16 Chapter 2: Approaches to Understanding the Public Policy Exception in Local Contexts . 20 2.1 Public policy as an essentially contested concept ...................................................... 21 2.2 Convergence and diversity in local implementation of international standards. ....... 22 2.3 Foundations for convergence: development and transplants ..................................... 23 2.3.1 Legal transplants ............................................................................................... 26 2.3.2 Law as a social phenomenon ............................................................................ 29 2.4 Realities of diversity: legal fields and legal cultures ................................................. 31 2.4.1 The legal field ................................................................................................... 35 2.4.2 Legal culture ..................................................................................................... 36 2.5 Responses to diversity ................................................................................................ 38 2.5.1 Third World Approaches to International Law (TWAIL) ................................ 40 2.5.2 Subaltern Studies .............................................................................................. 41   vi 2.5.3 Legal Pluralism ................................................................................................. 42 2.6 The public policy exception as a space for diversity ................................................. 46 2.7 Four factors for understanding public policy in local contexts .................................. 48 2.7.1 Language ........................................................................................................... 49 2.7.2 Legal tradition ................................................................................................... 54 2.7.3 Legal context: private international law or conflict of law. .............................. 65 2.7.4 Legal culture ..................................................................................................... 76 Chapter 3: The Public Policy Exception in the New York Convention ................................. 83 3.1 Arbitral legal framework ............................................................................................ 84 3.1.1 The origins of the New York Convention......................................................... 86 3.2 The role of national courts in arbitration ................................................................... 88 3.3 The origins of the public policy exception................................................................. 93 3.4 Challenges in the implementation of the public policy exception ............................. 99 3.5 Development of the public policy exception as reported by the International Law Association .......................................................................................................................... 103 3.5.1 Definitions of public policy in the context of enforcement of awards ........... 104 3.5.2 The content of public policy ........................................................................... 107 3.5.3 Local public policy and extent of review ........................................................ 110 3.6 Recommendations from the ILA Resolution to promote a uniform interpretation.. 111 3.6.1 Fundamental principles ................................................................................... 113 3.6.2 Public policy rules or lois de police ................................................................ 114 3.6.3 International obligations ................................................................................. 114 3.7 Challenges to the implementation of the ILA Resolution........................................ 114 3.8 Transnational public policy ...................................................................................... 116 3.8.1 ILA’s reports perspective on transnational public policy ............................... 119 3.8.2 Other perspectives on transnational public policy .......................................... 120 3.8.3 2014 ICC Meeting: a transnational legal order ............................................... 122 3.9 A pluralistic approach to advance the conversation between the local, international, and transnational levels ....................................................................................................... 126 Chapter 4: Mexico as an Example of Local Legal Arrangements........................................ 131 4.1 Court precedents system and amparo....................................................................... 133   vii 4.2 The development of trade in Mexico ....................................................................... 137 4.3 Mexico in the development agenda ......................................................................... 140 4.4 Arbitration in Mexico............................................................................................... 143 4.4.1 Recognition and enforcement of arbitral awards in Mexico ........................... 147 4.5 The four factors for studying the concept of public policy applied in Mexico ........ 151 4.5.1 Language ......................................................................................................... 151 4.5.2 Legal tradition ................................................................................................. 155 4.5.3 Legal context: private international law or conflicts of law ........................... 157 4.5.4 Legal culture ................................................................................................... 159 4.6 Summary .................................................................................................................. 169 Chapter 5: The Public Policy Exception in Mexico: The Discourse of Public Order......... 172 5.1 Mexican legal framework on public order ............................................................... 173 5.1.1 A law of public order: Article 1 and basic provisions .................................... 174 5.1.2 Restrictions for the application of foreign law. .............................................. 175 5.1.3 Grounds for nullifying an arbitral award or denying its recognition and enforcement .............................................................................................................. 176 5.1.4 Deny the suspension of a contested act in amparo trials ................................ 176 5.2 Mexican scholarship on public order ....................................................................... 179 5.2.1 Local scholars with an international perspective ............................................ 181 5.3 Mexican court precedents ........................................................................................ 186 5.3.1 Matters that are of public order (C1) .............................................................. 190 5.3.2 Situations that do not affect public order, nor social interest (C2) ................. 193 5.3.3 Situations that affect social interest and infringe norms of public order (C3) 196 5.3.4 Violation of norms of public order and matters contained in a law of public order (C4) ................................................................................................................. 198 5.3.5 Interpretation of public order in the context of arbitration (C5) ..................... 199 5.3.6 Definitions of public order by the courts (C6) ................................................ 202 5.3.7 The judges must ponder the effects of their decisions on public order (C7) .. 207 5.3.8 The use of ‘public order’ to refer to public matters (C8) ................................ 209 5.3.9 A decision in spite of public order (C9).......................................................... 209   viii 5.3.10 A matter is of public order (C1) and the suspension would affect social interest and public order (C3) .................................................................................. 210 5.3.11 Key learnings from the Mexican court precedents .................................... 211 5.4 The perspective of Mexican local actors.................................................................. 214 5.4.1 Local actors’ perspective about arbitration in Mexico ................................... 216 5.4.2 The experience of local actors with the public policy exception .................... 223 5.4.3 The status of public order in Mexico from the perspective of local actors ..... 226 5.4.4 The connection between national and transnational levels ............................. 231 5.4.5 Toward the future of public order in Mexico.................................................. 235 5.5 COMMISA Case ...................................................................................................... 243 5.5.1 The approaches to public policy in the decisions involved in this case.......... 248 5.5.2 The opinion of interviewed local actors on the COMMISA case. .................. 252 5.5.3 Reflections about the COMMISA case........................................................... 254 5.6 Summary .................................................................................................................. 255 Chapter 6: Conclusion .............................................................................................................. 258 6.1 Mexico’s local context as an example of the challenges and opportunities of the interaction between globalized legal orders and local legal arrangements. ........................ 259 6.2 The benefits of advancing a pluralistic approach to the interpretation of the public policy exception .................................................................................................................. 261 6.3 A means for local legal orders to establish their interpretation of the public policy exception from within. ........................................................................................................ 263 6.4 Recommendations for establishing a national guideline for the interpretation of public order in Mexico regarding the public policy exception. .......................................... 264 6.5 Avenues for future research ..................................................................................... 267 Bibliography ...............................................................................................................................269 Appendices ..................................................................................................................................295 Appendix A Article V New York Convention ........................................................... 295 Appendix B Arbitral Institutions in Mexico ............................................................... 296    ix List of Tables  Table 1-1 Distribution of precedents by type ............................................................................... 14 Table 1-2 Distribution of precedents by court of origin ............................................................... 15 Table 1-3 Interviewees’ years of experience and education ......................................................... 17 Table 5-1 Categories of court precedents ................................................................................... 189 Table 5-2 Chronology of COMMISA case ................................................................................. 245     x List of Figures  Figure 3-1 Elements to understand the public policy exception according to the ILA Interim Report .......................................................................................................................................... 104      xi List of Abbreviations  BCP Binding court precedent CONDUSEF National Commission for the Protection and Defense of Users of Financial Services ICC International Chamber of Commerce UN ECOSOC United Nations Economic and Social Council EU European Union FECC Federal Economic Competition Commission ILA International Law Association NBCP Non-binding court precedent NYC New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards UNCITRAL United Nations Commission on International Trade Law UNCITRAL Model Law UNCITRAL Model Law on International Commercial Arbitration US United States of America SCJN Supreme Court of Justice of the Nation – Mexican Supreme Court TCC Collegiate Circuit Courts WTO World Trade Organization     xii Glossary  Administrative nullity trial Procedure to contest the validity of an administrative act, such as the administrative rescission, before the Federal Tribunal for Administrative Justice.1  Amparo Mexican constitutional trial for the protection of human rights as established in the Mexican Constitution and in the international treaties subscribed by Mexico.2 Literally, the word means ‘protection’.  Binding court precedent (jurisprudencia) Mandatory interpretive criteria established by a Mexican court authorized to do so (Supreme Court of Justice, collegiate circuit courts, plenary circuit courts).3  Complainant The person who claims to be the owner of a subjective right or a legitimate individual or collective interest, provided that he alleges that the claimed norm, act, or omission violates the rights provided for in Article 1 of the Amparo Law and thereby makes a real and actual impact on his legal sphere, either directly or by virtue of his special situation vis-à-vis the legal order.4   Contested act The act that the complainant attributes to the responsible authority in an amparo trail as violating his human rights.  Contradiction Decision from the Mexican Supreme Court of Justice or collegiate circuit courts which settles the contradiction found between divergent court precedents.5  Direct amparo Challenges the judgements, awards, or decisions ending a trial before judicial, administrative, agrarian, or labour courts; whether the violation is committed in the final decision or during the proceedings, it affects the defenses of the complainant transcending the result of the judgement.6                                                   1 The procedure is ruled by the Federal Administrative Litigation Procedure Law, published in the Federal Official Gazette 1 December 2005 (entered into force 1 January 2006). See: Adriana Cabezut Uribe, Teoría de la Nulidad del Acto Administrativo (Theory of the Nullity of an Administrative Act), online: Tribunal Federal de Justicia Administrativa< http://www.tfjfa.gob.mx/investigaciones/historico/pdf/teoriadelanulidaddelactoadministrativo.pdf>.  2 Suprema Corte de Justicia de la Nación, ¿Qué es el juicio de amparo? Online: <https://www.scjn.gob.mx/conoce-la-corte/que-hace-la-scjn>. Amparo Law, Regulatory of Articles 103 and 107 of the Political Constitution of the United Mexican States, published in the Federal Official Gazette 2 April 2013 (entered into force 3 April 2013), Article 1. See infra section 4.1 Court precedents system and amparo. 3 Amparo Law, Articles 215 to 230. 4 Amparo Law, Article 5, section I. 5 Amparo Law, Article 225. 6 Amparo Law, Articles 170-174.   xiii Indirect amparo Challenges any other act of authority that is not the final decision in a trial, such as, general norms that affect the complainant by entering into force or with its first application; acts or omissions of authorities different from judicial, administrative or labour courts; acts, omissions, or resolutions of an administrative procedure; acts issued as part of a trial whose effects are impossible to repair; among others.7  Judicial review in amparo Action by which a complainant or an authority challenge the court decision in an amparo. Depending on the type of amparo and the decision, the judicial review is decided either by the Collegiate Circuit Courts or the Supreme Court of Justice (in chambers or in plenary).8  New Amparo Law Colloquial way to refer to the Amparo Law after its substantial amendment in 2013 to differentiate it from its previous version, given that it retains the same name.  Non-binding court precedent (tesis aislada) Single interpretive criteria established by a Mexican court authorized to do so –Supreme Court of Justice or collegiate circuit courts. It is not mandatory but has a guiding character.9  Responsible authority Authority that dictates, orders, executes or tries to execute an act which creates, modifies, or extinguishes legal situations unilaterally and mandatory; or the authority that omits to perform the act that would create, modify or extinguish those legal situations.10  Suspension in amparo Request made to the court to stay the effects of the contested act, either provisionally or definitively. The purpose of a suspension in an amparo trial is to prevent the contested act to take its full effects. The ‘provisional suspension’ preserves the act until the court decides if the definitive suspension is granted or not. The ‘definitive suspension’ preserves the contested act until the court renders its final decision on the amparo.11                                                     7 Amparo Law, Articles 107-111. 8 Amparo Law, Article 81-96. See: José Ramón Cossío, “La Justicia Constitucional en México” (Constitutional Justice in Mexico) (1997) (1) Anuario Iberoamericano de Justicia Constitucional 221-253. 9 Amparo Law, Articles 222-224. 10 Amparo Law, Article 5, section II. 11 Amparo Law, Articles 125-158. A. Guillen & L.C. Maldonado-Lazos, “La Suspensión y su Incertidumbre Dentro del Juicio de Amparo - The Preliminary Injunction and its Uncertainty in the Trial of Amparo Process” (2015) 10(2) Daena: International Journal of Good Conscience 129-155.   xiv Acknowledgements  The process for completing this project has given me invaluable personal, professional, and life lessons that I am grateful for. The most important element in this journey has been all the special people that have been there for me with their love, guidance, support, challenge, and motivation.  I am thankful for the economic support that I received from Peter A. Allard School of Law, the University of British Columbia, the Asia Pacific Dispute Resolution Project, the National Council for Science and Technology (CONACYT), Tecnológico de Monterrey, and the ‘Duarte Foundation’. Their generosity gave me the opportunity to dedicate myself to this endeavor.  My sincere gratitude to the Mexican professionals I interviewed for this project who generously gave their time to share with me their experience and knowledge. Your passion and commitment to your work and Mexico were inspiring.  I feel extremely grateful for my supervisory committee who continuously supported me for the completion of this project. To my supervisor, Pitman B. Potter, for your professional and personal wisdom, your compassionate guidance, and continuous encouragement. You were always available to listen and at each conversation your trust lifted me up to carry on. Ljiljana Biukovic, for your questions that challenged me to refine my thoughts and contributions, and for your suggestions to continue improving this work. You have cared for me and my project in many ways. Jon Beasley-Murray, for your insightful comments and for always offering your perspective that helped to expand mine. Your ‘outside’ view has been invaluable.  I am forever thankful for the countless opportunities and experiences that I lived at Peter A. Allard School of Law and for the outstanding staff, professors, and colleagues that I met during these years. To Emma Cunliffe and Gordon Christie for the many scholarly lessons. To Catherine Dauvergne, Douglas Harris, and Ljiljana Biukovic in your capacities as associate deans for welcoming and supporting me. To Karin Mickelson, for your participation in my committee and our many conversations that reminded me to stay focused on what I am passionate about and were source of motivation. To Rozalia Mate for always being so careful in   xv the assignment of work so that I could dedicate the time I needed to this project. I owe special gratitude to Joanne Chung who opened the doors of her office and her heart to listen to my stories, struggles, and adventures in addition to her formal duties, and always sent me off with a renewed positive perspective.  I am grateful for the many friends that have been with me during this process. Brendan, John, Don, Asha, Regiane, Shiva, Yue, Stefan, Pooja, Jalia, Kinwa, Patricia, Tom, Kirsty, Janelle, for sharing the journey, the struggles, and the joys. Naayeli, thank you for caring for me so dearly, for being my Senpai and ‘comadre.’ Brenda, Adriana, Miri, Genoveva, Silvia, Pedro, Gina, Arturo, Conchita, Carlos Manuel, and my many friends from Mexico, your love and encouragement has crossed borders. Andrea, Suzanne, Andy, Tom, Emma, Reid, for stepping up and helping me to cross the finish line.  I owe much of who I am to my family. Mami, for loving me unconditionally and cheering for me all along. Papá, for the values that you taught me. My brother, his family, my aunts, uncles, cousins, my Duarte family, your love, faith, and encouragement have been beams of energy to carry me through. Special gratitude to two of my big supporters who have left for the eternal journey, Abuelis and Arturo.  Fernanda and Isabella, we have grown together in this process. Thank you for being my sunshine and inspiration every day. Your smiles and hugs filled my tank when I needed it the most.   Pepe, thank you for being my rock. You always believed in me and cheered me on through my highs, lows, and very lows. You are the secret ingredient that has made all this possible. Thank you for the magic you bring to my life.    xvi Dedication  To Pepe, Fernanda, and Isabella,  your love is forever my strength.  1  Chapter 1: Introduction This dissertation examines the tension between globalization and local legal contexts by reference to the interpretation in Mexico of the public policy exception in the New York Convention on the Recognition and Enforcement of Arbitral Awards. The dynamics of institutional convergence and the establishment of international standards to facilitate trade continue progressing in a highly interdependent world. Trade continues to be the principal activity requiring the use of standards to improve and facilitate practices.1 Globalization, understood as the closer integration of the countries and peoples of the world2 and as a multidimensional phenomenon -economic, environmental, political, and cultural- has facilitated and advanced trade. It has also advanced convergence of legal norms and institutions that materialize in international conventions and organizations.3 This has forced states to adopt global standards and reform their legal systems to effectively participate in the global trade arena. However, the effects of these dynamics on local legal systems and their practices are often disregarded or not considered. Arbitration is the mechanism widely used to solve commercial disputes. The public policy exception to the enforcement of foreign arbitral awards provides an opportunity for examining convergence and pluralism in the implementation of trade standards in diverse local contexts.  This dissertation advances that the interpretation and implementation in Mexico of the public policy exception under the New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards4 reflect the impact of local legal arrangements on the implementation of globalized standards. Additionally, it demonstrates that a pluralistic approach to this exception advances a more inclusive perspective for the implementation of globalized standards while at the same time offering certainty. In 1958, the New York Convention was created to facilitate the recognition and enforcement of arbitral awards made outside of the territory where enforcement is requested or                                                  1 Pierre Larouche & Péter Cserne, eds, National Legal Systems and Globalization. New Role, Continuing Relevance (Netherlands: TMC Asser Press, 2013). 2 Joseph Stiglitz, “Globalization and its Discontents” (New York & London: W. W. Norton & Company, 2002) 3 Carol Harlow “Voices of Difference in a Plural Community” in Paul Beaumont, Carole Lyons, Carole & Neil Walker (eds) Convergence and Divergence in European Public Law (Oxford, Portland, OR: Hart Publishing, 2002) at 202. 4 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, 330 UNTS 38, (entered into force 7 June 1959) [New York Convention or NYC, hereinafter]. 2  are not considered as domestic awards in the state where enforcement is requested. This convention enhanced the conclusion of commercial disputes solved by arbitration by facilitating the enforcement of awards in cases when one of the parties did not voluntarily complied with the award. The contracting states of the Convention agreed to recognize awards as binding and enforce them in accordance to their rules of procedure. The New York Convention created a set of common norms that up to now has been adopted by 157 parties around the world and is recognized as one of the most successful international agreements. The Convention establishes the requirements to present an award for recognition and enforcement as well as certain exceptions in which local courts can refuse it. In its Article V 2. b), the Convention establishes the public policy exception according to which the recognition and enforcement of a foreign arbitral award can be denied if the arbitral award violates the public policy of the requested state.5 There exists a debate as to whether establishing a more universal interpretation of public policy for the operation of this clause would be preferred for enhancing the system that the Convention has created. In this study, I argue that giving space for local understandings of public policy to be acknowledged and accepted is desirable and more adequate because it gives recognition to the plurality of legal systems and, by defining the meaning of public policy from within, local legal systems can also provide the certainty expected in the international arbitration arena. This dissertation identifies that there is a tension between the expectations of globalization and legal convergence, exemplified by the New York Convention, and the local conditions where the Convention is implemented. The interpretation and implementation of the public policy exception is a space where this tension manifests as global standards are adapted and affected by local settings. On one side are the international expectations of how the public policy exception should be interpreted according to proposed standards, while on the other is the way in which local courts interpret and apply it. Using Mexico as an example, this study evidences how the tensions play out in a local setting where interpretive communities apply the public policy exception, and how the local legal arrangements –understood as the legal framework, culture, and practices– influence its application. Thus, the research question that leads this dissertation asks how is ‘public policy’ interpreted and applied in the Mexican legal                                                  5 For the full text of Article V of the New York Convention see Appendix 1. 3  field when the public policy exception, as established in the New York Convention, is opposed against the recognition and enforcement of a foreign arbitral award? The public policy exception has been a point of concern and debate within the arbitration community at different points in time. Among the efforts to establish harmonized approaches to this exception, the 2002 International Law Association (ILA) Resolution on Public Policy stands out and suggests how local courts should understand and apply the public policy exception.6 The trend has been moving towards increased convergence and even concepts like ‘international’ and ‘transnational’ public policy have been suggested. However, when the public policy exception was incorporated into the New York Convention it was meant to be a space that allowed recognition of the fundamental principles of each state. Thus, it is necessary to bring attention back to the original purpose that it serves. The relevance of the interpretation and implementation of the public policy exception in any given jurisdiction lies in the idea that it can affect the position of a country as an arbitration-friendly jurisdiction which also affects its attractiveness as trade partner or destination of foreign investment because trade actors rely on arbitration for the effective resolution of their disputes. Trade actors expect certainty in the interpretation and implementation of this exception. The approach of the local courts to the public policy exception can increase the ‘risk level’ of a jurisdiction for trade and business purposes because if the courts interpret public policy in ‘unexpected’ ways, trade actors could be left a drift for the enforcement of an arbitral award.  To better understand local approaches to the public policy exception, this dissertation proposes the use of four factors for contextualizing public policy –language, legal tradition, legal context and legal culture– along with the analysis of several local elements –scholarship, legal framework, judicial practice, and the experience of local legal actors. The proposed four factors bring attention to matters that differentiate legal systems which are often overlooked because their understanding is assumed, but they significantly influence the local approach to the concept of public policy.  The public policy exception was created as a mechanism within the New York Convention to protect the fundamental principles of the enforcement country. This dissertation also advances that to stay truthful to its purpose, the public policy exception needs to be                                                  6 International Law Association, “Final Report on Public Policy as a Bar to Enforcement of International Arbitral Awards” (2002) 70 Int’l L Ass'n Rep Conf 352. [ILA Final Report]. 4  understood as a pluralistic space where local perspectives on public policy are accounted for, valued, and respected.  The supporters of convergence suggest harmonizing the interpretation and application of the public policy exception as the most effective way to secure certainty and to underpin the arbitration system on this topic.7 While certainty on the implementation of the public policy exception in each state is needed, it is not conditional to having a universal interpretation of it. Pursuant to the spirit of the New York Convention, the intentions of their drafters and signatory states, and the general interpretation of the text, public policy should be understood as that of the state where recognition and enforcement is requested, therefore the meaning is given by each state.8 If according to its objective the public policy exception should serve to protect the fundamental principles of a country, then it is necessary to acknowledge the diversity implied in it, consider that its meaning will vary accordingly in each state, and recognize the legitimacy of each interpretation. This is referred to in this study as a ‘pluralistic approach’ to the public policy exception. The drafters of the New York Convention were a group with quite homogeneous ideas about their expectations for this agreement, thus the creation of a ‘safety valve’ within this context was considered reasonable.9 Nevertheless, they could not have foreseen how its application was going to evolve to the point in which developing countries would be using this exception to resist convergence and transnational ideas.10 The original intention of the incorporation of the public policy exception is to bring forward the plurality of legal systems and to consider it as a space to account for the diversity of perspectives, including those from                                                  7 International Law Association, “Interim Report on Public Policy as a Bar to Enforcement of International Arbitral Awards” (2000) 69 Int’l L. Ass’n Rep. Conf. 340 at 374 and 382-383 [ILA Interim Report]; Evandro Menezes de Carvalho, Semiotics of International Law. Trade and Translation – Introduction (Brazil: Springer, 2011); Tang Houzhi, chair, “The Value: three assessments” in Enforcing Arbitration Awards under the New York Convention: Experience and Prospects (New York: United Nations, 2009).  8 Jan Paulsson, “El orden público como criterio para negar el reconocimiento y la ejecución de laudos arbitrales” (Public policy as grounds to deny the recognition and enforcement of arbitral awards) in Guido S. Tawil & Eduardo Zuleta, eds, El Arbitraje Comercial Internacional. Estudio de la Convención de Nueva York con motivo de su 50o aniversario (Buenos Aires: Abeledo Perrot, 2008) 609-616; Karl-Heinz Böckstiegel “Public policy as a limit to arbitration and its enforcement” (Special Issue 2008) IBA Journal of Dispute Resolution 123.  9 James D. Fry, “Désordre Public International under the New York Convention: Wither Truly International Public Policy” (2009) 8:1 Chinese Journal of International Law 81 at 91 et seq. See infra Chapter 3 section 3.3 The origins of the public policy exception. 10 See Anton G. Maurer, The Public Policy Exception under the New York Convention. History, Interpretation and Application (New York: JurisNet, 2013) at Chapter 6 where he analyzes jurisdictions that have caused unrest regarding this topic like Brazil, Russia, India, and China. Also see infra Chapter 3 section 3.4 Challenges in the implementation of the public policy exception. 5  countries considered to be ‘in the periphery.’ A pluralistic approach, that maintains certainty as a fundamental goal, would contribute to the efficiency of the arbitration system, while staying true to the purpose that the exception serves.  Certainty about the local implementation of the public policy exception could be strengthened if states clarify how they are interpreting ‘public policy’ for the purposes of this exception. This dissertation suggests that states need to define ‘public policy’ by approaching the concept from within, using their own legal history and framework, instead of importing or adopting models from abroad. Legal transplants, the moving of a rule from one country to the other,11 have been used to advance the globalization of western legal forms.12 ‘Legal aid’ or ‘development’ programs were promoted since the 1970s by the United States to establish the rule of law in ‘less developed’ countries. The critical assessment of these programs has evidenced their failure due, in great part, to their disconnection from local contexts.13 Therefore, by defining their approach to public policy using their local elements, each state can claim in its own terms which are its most important values and principles enclosed in the term ‘public policy’. This can offer the desired certainty to support the efficiency of the international arbitration system. The findings from Mexico’s case study reveal the impact of local contexts in the implementation of the public policy exception and suggest a way in which a legal system can use the elements of its own legal framework and context –such as its legal scholarship, legislation, court precedents, and the perspective of local legal actors- to define what public policy is. Mexico as a case study reveals the relationship between pressures of globalization and legal convergence, and the resiliency of local legal arrangements. Mexico has been keeping pace of international developments on arbitration by incorporating the UNCITRAL Model Law on International Commercial Arbitration, signing the New York Convention, updating its national legal framework, and encouraging a judicial practice that has been recognized –and often                                                  11 Alan Watson, Legal Transplants, 2nd ed, (Atlanta: University of Georgia Press, 1993). 12 John Gillespie & Pip Nicholson, eds, Law and Development and the Global Discourses of Legal Transfers (Cambridge: Cambridge University Press, 2012). 13 David Trubek & Marc Galanter, “Scholars in self-estrangement: some reflections on the crisis in Law and Development studies in the United States” (1974) Wis L Rev 1062; Pierre Legrand, “The Impossibility of ‘Legal Transplants’” (1997) 4 Maastrich J Eur Comp Law 111; Yvez Dezalay & Bryant G. Garth, The Internationalization of Palace Wars: Lawyers, Economists, and the Contest to Transform Latin American States (Chicago: Chicago Press, 2002). [Palace Wars] 6  praised– as favorable to arbitration. However, certain cases, like COMMISA Case, reveal the struggles that local interpretive communities in Mexico face when international standards encounter more particular ideas and values of the local legal culture and system. In 2014, COMMISA Case brought renewed attention to problems faced by local actors with the interpretation of the public policy exception and serves to illustrate the tension exposed in this study.14 This case involved an arbitral award that was nullified in Mexican courts on public policy grounds and was recognized and enforced also on public policy grounds in the courts of the United States. COMMISA, a Mexican subsidiary of a US company, had contracts for the construction of offshore oil platforms with PEMEX – Exploración y Producción (PEP), a subsidiary of PEMEX, the Mexican state-owned petroleum company. In 2011, Mexican courts nullified an award issued in favor of COMMISA due to violations of Mexican public policy because it decided on an non-arbitrable matter, the administrative rescission, and because administrative contracts involve very delicate decisions that cannot be decided by arbitral tribunals. The administrative rescission is the early termination of an administrative contract for the breach of obligations from the private company (the contractor). In the Mexican context, administrative contracts are a sensible topic since they involve the government, the use of public funds, and the public interest since these contracts are meant to satisfy public purposes. Additionally, this case involved petroleum which is an strategic area of the Mexican economy and, as per established in the Mexican Constitution, it is ‘property of the Nation.’ After these result in Mexican courts, COMMISA requested the recognition and enforcement of the arbitral award before the courts of the United States who in 2016 granted it in favor of COMMISA on the grounds that the decision from Mexican courts violated US basic notions of justice. The way in which Mexican courts applied the public policy exception was cause for concern for the arbitration community, at the national and international levels. Even though one case should not be considered as a generalization of national practices, this case provides opportunities for insight and analysis on the international debate over how ‘public policy’ should be interpreted by national courts, pursuant to the New York Convention. This case also serves to emphasize the importance for Mexico to develop guidelines for the interpretation of the public                                                  14 See infra Chapter 5 section 5.5 COMMISA Case. 7  policy exception in terms that are aligned with its legal system and provide certainty for other international actors.  The answer to the question leading this study is that Mexican courts interpret public order first and foremost within the context of amparo trial, according to which public order is the maximum expression of the social interest and prioritizes the collective good of society over individual interests. According to the interpretations of the Supreme Court, judges must keep in mind the harmonic development of the community when analyzing cases that affect public order. In the past fifteen years, some federal courts have brought attention to public order within contractual relationships, specifically to address cases involving arbitration, and explain it as a limit to party autonomy to protect Mexico’s most important principles. There is consensus that it should be strictly interpreted to protect only the ‘most expensive’ principles of the Mexican legal system. The interpretation of public order in Mexico is contained within the national context without direct consideration of international trends. Consequently, the analysis of the four factors in the Mexican context and its specific local elements reveal that local legal arrangements impact the implementation of globalized standards, i.e. the New York Convention and the public policy exception, because these standards were developed at the international level and are not implemented locally following the frameworks declared in the international instruments or their later interpretations. Local legal systems apply the concepts using their local framework. Public policy is a local concept and its meaning depends on the legal system and society that it protects, hence, the proposal of applying a pluralistic approach to the public policy exception to advance a more inclusive perspective. This entails, first, to truly acknowledge the plurality of legal systems and their legitimacy to define core concepts like public policy. If local interpretations are recognized, and if local legal systems provide the guidelines according to which public policy is interpreted in their legal system, then, the plurality is recognized and legitimized, certainty is provided, and the effectiveness of the arbitration system can be enhanced.  1.1 Researcher position  In using Mexico as a case study in this dissertation, it is important to disclose my position as researcher. I am Mexican and obtained my law degree in Mexico, thus I have a personal connection to the country I am using in this study. The Mexican legal system is the basis of my 8  own legal education and the results of this dissertation are also intended to contribute and enhance it. It has been conceded now that it is difficult to assert that research can be objective because the researcher’s own perspective –i.e. the background, personal connections with the topic, assumptions, and stand on the topic– plays a role in deciding how the research is designed and developed.15 In this case, my previous knowledge of the Mexican legal system gave me the advantage of understanding its elements for choosing the sources of data. At the same time, my position could be considered a bias for being an insider. However, the fact that I am doing this research from outside of Mexico and that I am confronting my own knowledge of the Mexican legal system with the perspectives that I have explored by being in Canada, has enriched my perspective and allowed me to think more critically of the Mexican legal system and of the international dynamics involved.   My position as both, an outsider and an insider, has benefited the design, development, and analysis of this project. The contrast created with studying outside of Mexico enabled me to appreciate strengths and challenges of the Mexican legal system and put them into perspective. It led me to recognize that the local discourse and the culture I was embedded in was highly influenced by the developmental discourse in which bringing legal institutions and models from abroad by doing legal transplants was, in many instances, the default way to solve some –if not most– of the challenges faced by the local legal system. As I identified how the developmental discourse had impacted the local context, I decided it was necessary to take a different approach to offer solutions to the challenges faced in the interpretation and application of the public policy exception. This led me to inquire into options to bring a pluralistic perspective to the interpretation and application of the public policy exception, which led in the direction of looking within a local legal system rather than abroad.  1.2 Organization of chapters International instruments like the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration16 are tools of convergence in that they have created common rules for states on two important areas, the recognition and enforcement of foreign                                                  15 Nwando Achebe, “Getting to the Source: Nwando Achebe –Daughter, Wife, and Guest- A Researcher at the Crossroads” (2002) 14:3 Indiana University Press 9. 16 UNCITRAL, Model Law on International Commercial Arbitration, GA Res 40/72, 24 ILM 1302 (1985), Amendment GA Res 61/33 (2006). [UNCITRAL Model Law] 9  arbitral awards and by offering a model to follow for the drafting of national arbitration laws. The New York Convention includes the public policy exception as an avenue for each legal system to uphold their fundamental principles when an arbitral award goes against them. These international instruments do not provide a definition of what should be understood by public policy; it is somewhat expected that its interpretation would vary across different jurisdictions, given its nature as a dynamic and culturally dependent concept. In the interest of convergence, there have been attempts to suggest a uniform interpretation of the public policy exception. The interpretation and application of the public policy exception is thus, a site of contestation where global standards and local approaches intersect.  In order to answer the main research question of this project, I start this dissertation by examining the side of the tension in which globalization and legal convergence set global standards, exemplified here by the New York Convention. Using a historical and doctrinal analysis I present ways in which globalization of legal forms has been advanced, the reality of diversity it has encountered, and the responses that have challenged it. Throughout Chapter 2, I introduce theoretical frameworks that are useful to examine the tension that this dissertation explores. I bring special attention to programs created under the Law & Development discourse and the use of legal transplants as a tool to bring ‘development’ to ‘less developed’ countries as part of the strategies of legal aid programs, which assert that legal concepts can be transplanted and successfully implemented in other legal systems. By understanding law as a social phenomenon, I present a theoretical framework which recognizes the US American liberal legalist paradigm from the ‘development decades’ as problematic and opens the perspective to approaches that have challenged this view. The realities of diversity, explored here through studies assessing development projects and the use of concepts like legal field and legal culture, lead the way to introduce responses that have been more engaged with diversity. In these responses, the work of Robert Cover and Paul Berman laid a foundation to explore Third World Approaches to International Law (TWAIL), Subaltern Studies, and Legal Pluralism, which are examples of resistance to the globalization of Western ideas of law and the continued efforts for convergence. These perspectives serve to understand the idea of avoiding another legal transplant that suggests a definition of public policy for Mexico, to consider instead Legal Pluralism as a more adequate response to the tension exposed here, and, thus, to support the idea of making an analysis which engages with the specific characteristics of the Mexican legal field. 10  With this context, I introduce four factors to understand local approaches to public policy: language, legal tradition, legal context, and legal culture. These factors, which I later apply to Mexico, serve to bring attention to distinctions among legal systems that are generally overlooked.  Through a historical and doctrinal analysis of the origins and purpose of the public policy exception in Chapter 3, I bring forward the original objectives that led to its incorporation into the New York Convention. These analyses expose the importance of recognizing that public policy is a concept whose content is expected to be filled by each jurisdiction. In this chapter I present reasons why this exception has been problematic for the international arbitration system, and the efforts of convergence to advance a uniform and narrow interpretation, as manifested in the Resolution of the International Law Association on this matter. Additionally, I introduce diverse approaches to public policy in the literature, which have also led to the creation of new ‘levels of public policy’ with the introduction of concepts like ‘international public policy’ and ‘transnational public policy’ to the framework. The complexity of the concept of public policy and the diversity of approaches in national legislations and practices have caused tensions within the international community and the international arbitration system. Using the analysis of the creation and development of the public policy exception and considering the resisting perspectives explored before, I conclude Chapter 3 by examining the feasibility of a pluralistic approach to the public policy exception. The tension between global standards and local approaches is then tested in the Mexican legal context, specifically in its interpretation and application of the public policy exception for the recognition and enforcement of foreign arbitral awards. Coming from a perspective of understanding the local context in its own terms, I introduce Mexico in Chapter 4 using a historical and doctrinal analysis. I start by providing further details about two important characteristics of the Mexican legal system fundamental for this study: its court precedents system and amparo. Then I move to other relevant general aspects like the development of Mexico’s trade policies, the local development and practice of arbitration, and the local procedure for the recognition and enforcement of a foreign arbitral award. The four factors of language, legal tradition, legal context, and legal culture introduced in Chapter 2 are directly analyzed in the Mexican context to understand the local approach to public policy and how these factors function locally. The significance put on language for the purposes of understanding the 11  local context, along with the differentiation between civil and common law legal traditions derived from the analysis of the four factors, led me to shift the terminology to ‘public order’ for the rest of this dissertation. This change allows me to make the analysis and explain Mexico’s context in terms aligned with its specific characteristics. In Chapter 5, I examine the interpretation and application of the public policy exception in the Mexican legal context using doctrinal, textual, and qualitative analyses. I explore the interaction between global standards and local contexts by reference to the Mexican legal framework, Mexican scholarship, Mexican court precedents (jurisprudencia),17 interviews with local legal actors, and the COMMISA case. In this chapter I focus on presenting the local perspective on public order and on bringing light to underlying elements that pose challenges to local actors. First, I introduce four main uses of public order in Mexican legislation that illustrate the scope of public order in the Mexican legal framework: a) to characterize a law as being of public order; b) public order as a restriction for the application of foreign law; c) public order as grounds for nullifying an arbitral award or denying its recognition and enforcement; and d) to deny the suspension of an act of authority (contested act) in amparo trials. Second, Mexican scholarship explains the traditional understanding of public order and how scholars are suggesting the importance of delineating better the interpretation of public order for the public policy exception. Third, the analysis of Mexican court precedents illustrates how the courts have interpreted and used public order in the last 40 years and the diverse avenues that this term leads to in the Mexican context. Fourth, the interviews with local actors provide an account from those who are active in local practice. The interviewees provided valuable insights as they reflected on the development of arbitration as they have witnessed it in Mexico. Through their experience and expertise, they allow us to see the current state of affairs regarding the use of public order in Mexico, and how global standards have played out locally. They suggested avenues to continue improving arbitration practice regarding the public policy exception. Fifth, the COMMISA case presents one of the most recent experiences in Mexico with the public policy exception that renewed attention on the topic and heightened the importance of purposefully addressing it.                                                  17 Binding court precedents in Mexico are interpretations of the law issued by specific courts entitled by the law to do so. Binding court precedents are considered one of the primary sources of law in the Mexican legal system. The details of their creation are presented in infra Chapter 4, section 4.1 Court precedents system and amparo. 12  I conclude this dissertation by explaining how the interpretation and application of the public policy exception in Mexico exemplifies the challenges and opportunities –the tension- of the interaction between globalized standards and local legal arrangements. I explain the benefits of advancing a pluralistic approach to the public policy exception, and that local legal orders can define their interpretation using the four factors and their local elements following the analysis done for Mexico, rather than continuing to look for foreign legal transplants. Finally, I suggest elements to advance a national guideline for the interpretation of public order in Mexico for the public policy exception.  1.3 Data analysis In this dissertation, I use a collection of methods to explore the different elements that intersect in it, which have been addressed in the preceding section when explaining the organization of this project. The two subsections regarding Mexican court precedents and interviews with local actors, which are part of the analysis of the local context in Chapter 5, require a more detailed description of the processes involved in selecting the sources for the collection of data and the methods used for the analysis. These are described in the following sub-sections.  1.3.1 Mexican court precedents In Mexico, ‘jurisprudencia’, binding court precedents (BCPs) are mandatory interpretations of the law issued by specific courts authorized by law and are the second most important source of law in the Mexican legal system.18 For this dissertation, I analyze federal court precedents to understand how the highest national courts had interpreted the concept of public policy (orden público - public order). The analysis includes binding court precedents (BCP) and non-binding court precedents (NBCP)19 on public order issued by Mexican federal                                                  18 See infra Chapter 4 section 4.1 Court precedents system and amparo for details on which courts can create binding court precedents and the methods to create them. According to those methods, there are three types of binding court precedents: by reiteration, by contradiction and by substitution. In this project ‘binding court precedent’ (BCP) refers to any mandatory interpretive criteria, and their type is specified only if necessary. 19 The difference between non-binding court precedents and binding court precedents is the mandatory character of the latter. The non-binding court precedents are interpretations from the courts that can later become a binding court precedent, if they meet the requirements established in the law. Non-binding court precedents are frequently used as guiding interpretive criteria by the courts. BCPs are mandatory for the court that issues them and the courts below it. The BCPs from the Supreme Court are mandatory at the national level. 13  courts. These precedents capture the diversity of uses of the term since the search was not limited to arbitration related cases. In this project, every precedent that was analyzed is referred to as a “precedent” and when necessary, it is specified if it is a BCP or NBCP. Court precedents are published in the Federal Judicial Weekly (Semanario Judicial de la Federación), the Judiciary’s official media. In 2013, the Plenary of the Supreme Court decided the Federal Judicial Weekly would be permanently published electronically and it is featured as “a digital system for compiling and diffusion of binding court precedents and non-binding court precedents issued by the courts of the Federal Judiciary; of the corresponding decisions, as well as of the normative instruments issued by the organs of the Federal Judiciary.”20 The Federal Judicial Weekly was created in 1870 and its chronological organization is done in ‘Epochs’, whose periods have been decided according to significant social and political events, as well as by relevant constitutional amendments. The 1st to the 4th Epochs contain decisions issued before 1917, the year when the ruling Mexican Constitution entered into force; these precedents are considered historical and not applicable anymore. Currently, this system is in its 10th Epoch. The Supreme Court started this Epoch with the decisions issued from October 4th, 2011 onwards due to the major Constitutional amendments that occurred in 2011.21 The process to select the precedents analyzed for this project started with a search in the Federal Judicial Weekly database using the 7 th to 10th Epochs and the Appendices of the Federal Judicial Weekly. The search started on the 7th Epoch because Mexico ratified the New York Convention in 1971 and the 7th Epoch started in 1969; therefore, any ruling related to the enforcement of foreign arbitral awards would be contained in this segment. I made the search for all the precedents containing the words “orden público” (public order) in its title.  On April 15th, 2014, the search returned 289 precedents including: NBCPs, BCPs by reiteration, BCPs by contradiction (unifying criteria), constitutional controversies,22 and                                                  20 Suprema Corte de Justicia de la Nación, Gaceta del Semanario Judicial de la Federación Book 1, Volume I, 10th Epoch (Suprema Corte de Justicia de la Nación, 2013) Translation by the author. 21 It was called the Amparo and Human Rights Amendment and it established new obligations regarding the respect and protection of fundamental rights. For more details see: Suprema Corte de Justicia de la Nación, Reformas Constitucionales en materia de Amparo y Derechos Humanos publicadas en junio de 2011 (Constitutional Amendments on Amparo and Human Rights published on June 2011), online: <http://www2.scjn.gob.mx/red/constitucion/inicio.html>. 22 A Constitutional Controversy is an exclusive procedure of the Supreme Court to solve conflicts that arise between federal powers –Legislative and Executive-, between provincial powers –Legislative, Executive and Judicial-, between the organs of the Federal District, or between different levels of powers –federal, provincial, and municipal- 14  unconstitutional actions.23 From these precedents, I selected those that talked about “orden público” and disregarded those that contained the words “orden” and “público,” separated from each other. After this filter, 178 precedents were left. The search was updated on May 6th, 2014 to confirm the number of items, it returned 189 precedents, and this is the number that constituted the final list of precedents that were analyzed for this project. According to the classification system of the Federal Judicial Weekly, the 189 precedents are distributed in the following categories according to the method by which they were created or the decision that gave them origin:   Table 1-1 Distribution of precedents by type Type of  precedents  Number of precedents Binding court precedents  36  Action of Unconstitutionality (1)   Constitutional Controversies (1)   By Reiteration (20)   By Contradiction (14)  Non-binding court precedents  153 Total  189  Regarding BCPs derived from actions of unconstitutionality or from constitutional controversies, the Plenary of the Supreme Court, when deciding these cases, considered that there should be a new mandatory precedent that the national courts should follow and thus issued a BCP. The Constitutional Amendment of 2011 introduced a new method to create BCPs, i.e.                                                                                                                                                              due to invasion of competences or for violations of the Federal Constitution by any of the afore mentioned. Suprema Corte de Justicia de la Nación, ¿Qué hace la Suprema Corte de Justicia de la Nación? (What does the Supreme Court of the Nation do?), online: Suprema Corte de Justicia de la Nación <https://www.scjn.gob.mx/conoce-la-corte/que-hace-la-scjn>. 23 An Action of Unconstitutionality is a means of constitutional control that is exclusive of the Supreme Court, whereby is denounced the possible contradiction between the Constitution and some general rule or provision of lower hierarchy –law, international treaty, regulation or decree-, with the aim of preserving or maintaining the supremacy of the Constitution and to override the rules declared unconstitutional through this process. Suprema Corte de Justicia de la Nación, ¿Qué hace la Suprema Corte de Justicia de la Nación? (What does the Supreme Court of the Nation do?), online: Suprema Corte de Justicia de la Nación <https://www.scjn.gob.mx/conoce-la-corte/que-hace-la-scjn>. 15  BCP by substitution,24 but given its recent incorporation there were no precedents of this type at the time when the precedents were selected for this study. An additional way of looking at the distribution of precedents that can give the reader further context is in Table 1-2 which shows the precedents classified according to their court of origin.25  Table 1-2 Distribution of precedents by court of origin Type of court Number of precedents Supreme Court of Justice (issued either by the Plenary or its Chambers) 41 Collegiate Circuit Courts 148 Total 189  The Mexican Supreme Court of Justice sessions either in Plenary or in Chambers, and regardless of which chamber issues the precedent, all BCPs they issue are mandatory for all the courts in the country. As for the Collegiate Circuit Courts, there are 32 circuits in the country, one for every state in the country. In the distribution of precedents from Collegiate Circuit Courts, 70 out of 148 (47.29%) of the precedents come from the First Circuit which is Mexico City (before, Federal District), the capital of the country. The remaining 78 precedents come from the other 31 circuits. The Sixth Circuit (Puebla), the one with the most items after the First Circuit, only has 14 items, which shows the relevance of the First Circuit in the Mexican judicial system.26 For the analysis, the precedents were organized into categories according to the multiple ways in which the courts had used “orden público” in the past forty years, and the results are presented in Chapter 5. The results evidence the complexity of the task for understanding the local approach to public order and the importance of approaching it from within and following                                                  24 See infra Chapter 4 section 4.1 Court precedents system and amparo.  25 The Constitutional amendment of 2011 and the New Amparo Law from 2013 established one more type of courts that can create jurisprudence, the Plenary of Circuit Courts. The database for this project does not contain jurisprudences from these courts since there were no precedents from these courts reported at the time when the list of court precedents was defined. 26 After Mexico City and Puebla, Nuevo León (4th Circuit) has 10 theses. The remaining 54 are distributed among 17 circuits. 16  the local framework.    1.3.2 Interviews with local actors  The interviews with local actors complemented this project by adding the professional perspective of members of the local interpretive community.27 These interviews offered information on historical, contextual, and normative elements that the interviewees considered to be connected to the application of the public policy exception in the Mexican legal field. The three types of actors interviewed for this project were chosen according to the main roles involved in the recognition and enforcement of a foreign arbitral award. These are: lawyers acting as counselors of a party in an arbitration, lawyers acting as arbitrators in an arbitral tribunal, and federal judges who have jurisdiction to decide on the recognition and enforcement of foreign arbitral awards in Mexico. These three categories provide insight on both, the perspective of practitioners and the perspective of the judiciary in the interpretation of ‘public order’ for the purposes of the public policy exception. The fieldwork was conducted in Mexico City (D.F.) for reasons related to the judiciary and the practitioners. First, Mexico City is the most important federal judicial circuit (First Circuit) for the amount and type of cases that its courts decide28 and it is where most of the international arbitration cases occur. Secondly, the main arbitration institutions, as well as prominent law firms that are either fully dedicated to arbitration or have a specific arbitration practice department are in Mexico City.  For the recruitment of interviewees, I was already familiar with some names because of cases they had decided or been involved in, legal commentaries they have written on the topic, having met them at arbitration academic events, or because of the cases they had been involved in that had been covered in the media. With this previous knowledge, I created a list of prospects and contacted them a couple of weeks before I travelled to Mexico City in 2012. The final criteria to include them had to do with their availability while I was there. I met with each one personally in their offices and completed the necessary protocol of signing the consent forms, pursuant to UBC’s Behavioural Research Ethics policies. Regarding practitioners, because most                                                  27 Stanley Fish, Is There a Text in This Class? The Authority of Interpretive Communities (Harvard University Press, 1982). 28 One example of its relevance is the distribution of binding and non-binding court precedents explained in the previous section 1.3.1 Mexican court precedents. 17  of them have acted in both capacities as counselors and arbitrators, it was decided with them in which capacity they preferred to be interviewed and then I conducted the interview following the corresponding script. The interviewees were invited to take part in this research as anonymous participants, therefore there are no details included that could lead to identifying them.   The interviews were audio taped and transcribed for analysis. They were analyzed using ATLAS.ti software for qualitative data analysis. This software facilitated the coding process, made it easier to analyze the frequency of codes and was particularly useful to draw connections between the codes and to create family codes for the interpretation of the data. The codes for the analysis were created in an inductive way following the topics touched upon in the interviews. All the interviewees have a law degree. Table 1-3 details their years of experience and education; it shows that eight of them obtained their law degree from a public university, while only four from a private university. Ten of the interviewees have completed graduate studies, which include specialty programs, masters, and five of them hold doctorate degrees. Seven completed studies in universities outside of Mexico—in the United States (US), Europe, and one in Nicaragua.    Table 1-3 Interviewees’ years of experience and education Interviewee Years of Experience Legal Education (Public/Private University Post-graduate Education Counsellor 1 17 Public Seminars in international trade and arbitration from Mexican private university. Counsellor 2 15 Private Legal Writing course from US university Counsellor 3 20 Public Masters from US university Doctorate from Mexican private university Counsellor 4 +30 Private Doctorate from European university Arbitrator 1 +40 Public  Arbitrator 2 19 Public Masters from US university 2 specialty programs from Mexican private university Certificate on international arbitration from Mexican private university. 18  Interviewee Years of Experience Legal Education (Public/Private University Post-graduate Education Arbitrator 3 20 Private Degree in business and finance from US university. Masters and Doctorate from US university Arbitrator 4 20 Private  Federal Judge 1 39 Public Specialty program from Mexican private  university Federal Judge 2 +50 Private Masters from a European university 2 Masters from Mexican universities (one private and one public) Doctorate (Honoris Causa) from a Mexican private university Federal Judge 3 28 Public Masters from Mexican private university Doctorate (Honoris Causa) from a Nicaraguan university Federal Judge 4 19 Public   The counsellors have an average of over 20 years of experience in their practice, and they have represented parties –Mexican and foreign– in national and international arbitrations. The arbitrators average over 22 years of experience participating either as sole arbitrators or as members of an arbitral tribunal. They have participated in national and international arbitral proceedings involving national and international parties. In these two categories, the interviewees are highly experienced individuals with remarkable international credentials. Some have participated in international forums like UNCITRAL conferences on arbitration, negotiations of NAFTA, among others. As is often the case in arbitration, the counsellors and arbitrators have performed both roles, some of them have also worked in arbitration institutions, having the perspective of managing arbitral procedures. These two groups of interviewees are familiar with arbitral rules from national and international arbitral institutions like the Mexican Arbitration Centre (Centro de Arbitraje de México, CAM), Arbitration and Mediation from the National Chamber of Commerce (Cámara Nacional de Comercio, CANACO), the International Chamber of Commerce (ICC), American Arbitration Association (AAA), London Court of International Arbitration (LCIA), International Centre for Settlement of Investment Disputes (ICSID), among others. Given their average time of practice, it could be said that most of them have witnessed –and sometimes influenced– Mexico’s development into an open market 19  economy and the changes made to the Mexican legal framework for the introduction of arbitration and its continuous development. The federal judges who participated in the interviews are well established members of the Judiciary who average over 30 years of experience. Each of them were members of a Collegiate Circuit Court in the First Circuit (Mexico City) at the time of the interviews. Collegiate Circuit Courts decide on requests for direct amparos, appeals to decisions from District Courts (review of indirect amparo), conflicts of jurisdiction among District Courts and Unitary Circuit Courts, and cases delegated by the Supreme Court, among others.29 Collegiate Circuit Courts are the second highest level of the federal judiciary, only below the Supreme Court, and are among the courts allowed by law to create binding court precedents (BCPs). The First Circuit, as mentioned before, is the one that receives most cases related to arbitration. The federal judges interviewed for this project explained that the number of cases related to arbitration that reach national courts is minor. There is not one specific court which specializes in arbitration matters, therefore the number of cases that arrive to the courts are diluted among the existing number of circuit courts. The contributions from local legal actors to this project complements the purpose of bringing attention to the local perspective on public policy from within. Their insights are both positive and critical, which overall allow us to obtain a more complete vision of the local context.                                                  29 See infra Chapter 4 section 4.1 Court precedents system and amparo. 20  Chapter 2: Approaches to Understanding the Public Policy Exception in Local Contexts  The starting point of this study is to examine the development of approaches that go from convergence and globalization of legal forms to the recognition of diversity, as well as theoretical frameworks that are useful for examining the public policy exception in local contexts. Core to the analysis done throughout this study is to frame public policy as an essentially contested concept, which is a perspective that sets this dissertation as one voice to enrich the discussion about how this concept should be locally studied and interpreted. In the examination of convergence and diversity, this chapter presents the law and development discourse and the use of legal transplants as foundations for convergence, with the corresponding problems they have exposed. This examination leads us to approach law as a social phenomenon in order to acknowledge diversity. Once recognized as such, the realities of diversity are brought to light through studies that have evidenced the need to purposefully consider the local context in which norms are applied. These realities invite consideration of the legal field and legal culture as theoretical tools to examine local contexts.  Following, using the work of Robert Cover and Paul Berman as theoretical foundations to pluralistic perspectives, this chapter introduces responses to diversity that have emerged to bring marginalized voices to the front such as Third World Approaches to International Law (TWAIL), Subaltern Studies, and Legal Pluralism. This exploration of convergence and diversity sets the ground to consider the public policy exception as a space for acknowledging and upholding diversity. Finally, this chapter introduces four factors –language, legal tradition, legal context, and legal culture- suggested for examining local approaches to public policy within a framework that takes legal pluralism as a characteristic of the international legal field but also as a perspective that is more inclusive of the diversity of legal systems and conducive to more effective ways of communication to solve the challenges of implementing the public policy exception.  21  2.1 Public policy as an essentially contested concept  Public policy is approached in this dissertation as an “essentially contested concept,” which is a distinctive feature that W.B. Gallie41 assigned to certain concepts for which it is difficult to attain a specific meaning due to their complexity and the challenges that their analysis poses. An essentially contested concept “has a relative nature and is a culture dependent concept that enriches with the process of discussing it.”42 Jeremy Waldron argues that it is a myth that we need to do a philosophical analysis of certain terms because they have lost clarity. He affirms those terms whose ordinary usage is perceived as confused have almost always been perplexing. Regardless of the “numerous attempts that have been made to pin them down with clear definitions, or precisely because of this, they have presented themselves throughout their history as sites for contestation as to what counts as their proper use.”43 Recognizing the usefulness of this approach, Waldron applied it to ‘the rule of law,’ and explains that ‘essentially’ refers to the location of the disagreement or indeterminacy about a concept, meaning it lies at its core.  He explains that “essential contestability is a combination of normativity and complexity: only normative concepts with a certain internal complexity are capable of being essentially contested.”44 Gallie argues that essentially contested concepts have a dynamic nature and to be able to participate in the debate for their clarification one should offer a conception of it. It is precisely that debate which gives the term presence and relevance. For these reasons, I suggest that public policy fits as an essentially contested concept. Public policy is a fundamental element in the organization of a social group and although it seems to be clearly understood, its meaning has not been agreed upon. Thus, when its use and interpretation is studied in a specific context, one realizes that it is a site of continuous contestation. Nevertheless, Waldron and Gallie suggest that the constant debate of this type of concept is what better contributes to continuing to build layers of understanding for their application.  Waldron agrees with Gallie that it is the contestation on the use of the term that advances the quality of argumentation using that concept. Each contestation adds to the debate, enriching it, regardless of establishing a definite conception or not. It is expected that new contestations                                                  41 W.B. Gallie, “Essentially contested concepts” (1955-1956) 56 Proceedings of the Aristotelian Society, 167. 42 Ibid. 43 Jeremy Waldron, Is the Rule of Law an essentially contested concept (in Florida)? (2002) 21 Law and Philosophy 137, at 140. 44 Ibid. 22  will join the discussion. Thus, the process of offering new contestations and the ongoing debate between contestants contributes to “deepen and enrich our sense of what is at stake in a given area.”45 Public policy has a strong normative character in the context that will be analyzed in this project. It has the capacity to deny the enforcement of an arbitral award; it is a mechanism that has been strongly endorsed by most jurisdictions around the globe. To look at public policy as an essentially contested concept, in Waldron’s and Gallie’s terms, provides a framework within which to acknowledge the complexity of the notion and to be aware that this study is one contestation that aims to enhance the application of public policy within a specific context. The public policy exception within the New York Convention is thus a place of tension in which the local and the global intersect in a significant way. While the exception was created as a space to allow for national interpretations, the idea of pursuing convergence for the effectiveness of global systems like arbitration restricts this purpose. It is an example of how the divide between the global and the local creates tension that needs to be explored within a local context to better understand the challenges that local interpretive communities encounter.  2.2 Convergence and diversity in local implementation of international standards. Globalization of legal forms, the rapid growth of trade, and the increased inter-dependence between countries are some of the processes that have made convergence an underlying assumption needed to advance progress in the relationships among transnational actors and to make processes more effective. Convergence materializes in the creation of institutions, forums, conventions, and agreements that bring states together toward common goals and to create common rules. In these efforts, top-down approaches are used to define those goals, rules, and their interpretations. Many of them emerged from perspectives which considered that legal concepts, institutions, and processes could be exported and successfully implemented in other legal systems, regardless of the local context.  Most, if not all, efforts toward convergence at some point have encountered questions and challenges from those who acknowledge diversity. However, the challenge has been that those who advocate and work for achieving convergence, have not usually paid enough attention to the diversity of local conditions. Top-down approaches generate problems for the lack of                                                  45 Ibid. 23  consideration of the contexts in which the norms will be applied. It is not until problems of local compliance arise that attention is given. The diversity of local conditions and the problems that local actors experience with compliance invite consideration of pluralism to bring local accounts to the forefront and explore new ways in which local actors can solve these problems considering their perspectives and realities.    2.3 Foundations for convergence: development and transplants Globalization has been a driving force for convergence, particularly since the second half of the 20th century. In the 1960s Western countries, represented mainly by the United States and Western European States, embarked on a ‘crusade’ to bring ‘development’ to less developed countries referred to as the ‘Third World’. Under the Law and Development (L&D) discourse diverse efforts were included for advancing the promotion of the rule of law in developing countries. In the 1970s the main objective was to promote liberalism. Later, emerged the ideas of advancing development based on economics and the Washington Consensus. In the 21st century this has evolved into promoting models of good governance and protection of human rights. In all these stages, the premise has been that the Western idea of law is the one that will bring development to less developed countries if they adopt certain laws and legal institutions that consolidate the “rule of law” model in their countries.  The Law and Development studies emerged from the development assistance programs set in the 1960s by the United States government, international agencies, and private foundations that worked with the governments and legal institutions of developing countries.46 The interest was at first on development assistance, mainly with an economic approach. The legal element of the development assistance programs came late to the development agenda. The interactions between lawyers and developers brought attention to study the role of law in development.47 Based on the assumption that a strengthened legal profession would foster development,48 scholars and researchers chose legal education as the point of entry to advance development.                                                  46 Trubek & Galanter, supra note 13 at 1065. Trubek and Galanter analyzed the L&D movement, showed its origins and explained how it got into a crisis, which led to questioning its basic assumptions and therefore the feasibility of establishing L&D as a field of inquiry. Their thoughts are particularly relevant as they recognize themselves as part of this movement and supporters of the law reform projects. They wrote with the aim of understanding how the L&D studies fell into this crisis and tried to offer a future for this field. 47 Trubek & Galanter, supra note 13 at 1066. 48 Ibid at 1075.  24  Thus, began the legal development projects aimed at reforming law and legal education in developing countries funded by agencies and foundations like the Ford Foundation, the U.S. Agency for International Development (USAID), or the Rockefeller Foundation. For example, the Ford Foundation created the International Legal Centre (ILC) as a specialized agency to assist ‘Third World’ countries in achieving their goal of rapid development giving attention to the role of law in the development of modern nations.49  Legal development assistance to ‘Third World’ countries was justified as “… a rational and effective method to protect individual freedom, expand citizen participation in decision making, enhance social equality, and increase the capacity of all citizens rationally to control events and shape social life.”50 However, these programs and their objectives were defined according to the US-American idea of development and a group of assumptions that were later questioned. The ‘liberal legalism paradigm’ underlay the Law and Development discourse and those who advanced the assistance programs truly believed that by implementing this model, the ‘Third World’ countries would achieve development.51   The propositions of liberal legalism build on each other and help us to understand why those creating and promoting law and development projects assume that by advancing legal reform in ‘Third World’ countries behaviour would change and, consequently, development would be achieved. From their perspective, they just needed to transfer the right laws for this to happen; thus, law was a fundamental element and instrument in the development discourse. They believed in pursuing the ideal of development to bring an overall better life for people in ‘Third World’ countries. In the 1970s, the critiques of these projects seriously questioned their effectiveness on advancing development and more importantly on the disconnect of the projects from the realities                                                  49 The Ford Foundation devoted a considerable amount of resources for the improvement of legal education in developing countries and to support research on the law and legal institutions of these nations. International Legal Center, “Law and Development: The Future of Law and Development Research : Report of the Research Advisory Committee on Law and Development of the International Legal Center” (Sweden: International Legal Centre and the Scandinavian Institute of African Studies, 1974) at 13. 50 Trubek & Galanter, supra note 13 at 1063.  51 Ibid, at 1071-72. They explain that the components of this paradigm are: a) the state is the primary locus of supra-individual control in society, state action involves coercion of individuals, and state control furthers individual welfare; b) the state exercises its control over the individual through law (universal bodies of rules); c) rules, made through a pluralist process, are consciously designed to achieve social purposes or effectuate basic social principles; d) when rules are applied, they are enforced equally for all in a fashion to achieve their consciously designed purposes; and e) the courts are the central institutions of the legal order since they have the principal responsibility for defining the effect of legal rules and concepts on individual and group behaviour. 25  and needs of Third World countries. The results from certain legal reform projects put into question the assumptions of liberal legalism.52 The challenges were strong and the evidence contradicting the model made it hard for scholars to argue back. Trubek and Galanter recognize that the crisis in which L&D fell allowed them to understand their own ideas about law and to see more clearly their own legal institutions. This process served as a reflection for scholars to recognize that the initiatives they wanted to implement abroad were not even working within the United States as they thought.  Robert A. Packenham studied notions of political development53 in the United States, and his work provides an example that explains the development policy broadly underlying convergence. His study explains how the doctrines and theories used by government officials concerned with economic and technical assistance programs abroad, and by social scientists in comparative politics, were profoundly affected by the assumptions of the ‘liberal tradition’.54 According to Packenham, the four propositions, or beliefs, about economic and political development that the US ‘exceptional experience’ engendered among US Americans were a) change and development are easy; b) all good things go together; c) radicalism and revolution are bad; d) distributing power is more important than accumulating power.55 Packenham addressed the exceptional way in which the United States became a state; they arrived at democracy with the premises of equality and individual liberty at the core, rather than enduring a revolution. Therefore, their experience was exceptional, compared to the struggles that most ‘Third World’ countries had to go through.56 Packenham suggests the beliefs of the liberal tradition are useful for understanding why the US doctrines and theories took the shape they did, and to criticize their extension to and application in the ‘Third World’.57 He emphasized these assumptions were a force in shaping US views about political change and                                                  52 See the analysis of the Chile Law Program and its failure in: John Henry Merryman, “Law and Development Memoirs I: The Chile Law Program” (2000) 48 Am J Comp Law 481. 53 By ‘notions of political development’ Packenham meant “ideas regarding nature, conditions, and consequences of highly valued types of political systems” (at xv) and he understood ‘political development’ as the “will and capacity to cope with and to generate continuing transformation toward whichever specific values seem appropriate in particular contexts” (at xxii). Robert A. Packenham, Liberal America and the Third World. Political Development Ideas in Foreign Aid and Social Science (New Jersey: Princeton University Press, 1976). 54 He followed the work of American exceptionalist Louis Hartz to understand the liberal tradition and its assumptions. Louis Hartz, The Liberal Tradition in America. An Interpretation of American Political Thought Since the Revolution (New York: Harcourt, Brace, and World, 1955). 55 Packenham, supra note 53 at 20. 56 Ibid at 18. 57 Ibid at 20-21. 26  development in the Third World, and they distorted US American perceptions and actions in those countries.  These studies reveal that legal aid programs were ethnocentric and functioned under assumptions disconnected from the realities of their recipients; the guiding premises were not even functioning as they presumed within the US. Regardless, the number of projects and resources put into developing countries reached numerous jurisdictions and by the time these critical analyses were done, the projects had already had an effect on the receiving legal systems. Legal reforms, changes in legal education, training of judges and lawyers, among other actions had been taken. The premise of an ‘ideal’ form for implementing the ‘rule of law’ to achieve ‘development’ had already been spread and planted in the minds of local actors.  2.3.1 Legal transplants Legal transplants have been a common tool to advance the globalization of western legal forms,58 and had been used in multiple legal aid projects to advance the rule of law in ‘less developed’ countries. Alan Watson explains legal transplants as the “moving of a rule […] from one country to another, or from one people to another” and considered that change in the law is independent of “social, historical or cultural substrata, so that historical factors and habits of thought do not limit or qualify the transplantability of rules.”59 He uses this term to explain that legal change does not come from local innovations in a society, but rather from borrowing rules from other societies. Watson strongly argues against the predominant idea of the dependent relationship between law and society. His approach was endorsed by scholars who reacted to the functionalist-positivist view of law in which law is considered a set of rules created by a ruling power in response to society’s needs, supported by the use of force.60 For Watson, transplanting is one of the most fruitful means of legal development and in order to use law to understand society, legal transplants need to be carefully considered.   Pierre Legrand responds strongly to Watson's approach arguing that those who have followed this approach had a formalist understanding of law, and they were reducing the legal to                                                  58 Gillespie & Nicholson, supra note 12.  59 Watson, supra note 11. 60 Michele Graziadei, “Legal Transplants and the Frontiers of Legal Knowledge” (2009) 10 Theor Inq Law 723 at 726.  27  rules, and rules to bare propositional statements.61 For Legrand, formalists were assuming law is autonomous, without any connection to its historical and cultural context, and suggesting that law has a fixed meaning irrespective of interpretation or application. Legrand argues that law cannot be separated from society, since law serves a purpose to a particular society, which has its own historical and cultural characteristics. The functionalists’ basic error, from Legrand’s perspective, stems from the failure to understand the way law is inseparable from its social and cultural context because a rule’s existence depends on its interpretation and application within an interpretive community, and this is historically and culturally conditioned. For Legrand the meaning of a rule is itself culture-specific so he cannot conceive a rule traveling to another society because its meaning, the crucial element of a rule, does not survive the journey from one legal system to another.62 Transplants, from his point of view, cannot happen in a “meaning-ful”63 way therefore they are simply impossible. This connection between law and society suggested by Legrand, is one of the fundamental ideas guiding this study. Law needs to be considered in conjunction with the context in which it is applied, including historical and cultural factors. The suggestion of new laws for a legal system needs to be done with careful consideration of the local framework.  In the last two decades, scholars have found that legal transplantation, also called legal transfers or legal borrowing, is a trend that continues apace regardless of the multiple studies and approaches that have offered evidence of their failures, half-successes, or the challenges they pose for the receiving legal systems.64  The process of transplantation often emerges from the assumption that one legal system is more developed or advanced than the other. However, there is a part that is lost and missed in this process of importation and adaptation of legal institutions and standards when the local context is not adequately considered. These processes can provoke positive changes in recipient legal systems by exposing them to foreign ideas and legal institutions they can incorporate for                                                  61 Pierre Legrand, supra note 13. 62 Ibid at 117.  63 Ibid at 120. 64 Dezalay & Garth, Internationalization of Palace Wars, supra note 13; Chrisje Brants, “Legal Culture and Legal Transplants. Netherlands National Report” in Jorge A. Sánchez Cordero, ed, Legal Culture and Legal Transplants Reports to the XVIIIth International Congress of Comparative Law by the International Academy of Comparative Law (Washington, D.C., 2010). 28  their advantage. However, this needs to be done with conscious consideration of the local context.  The importing of legal norms or their interpretation is one of the resources that developing countries have used to keep the pace of rapid global developments. This is particularly significant in trade related topics. In the preliminary stages of the development of this project, the initial idea was to do a comparative study on the interpretation of public policy in order to suggest an interpretation for the Mexican legal system to solve the problem of uncertainty provoked by the lack of clarity in the interpretation of ‘public policy’ for the purposes of the public policy exception. This meant finding the best interpretation, or combination of them, and bringing it to the Mexican legal system. The literature on development and transplants revealed the disconnection of this path, while legal pluralism opened the possibilities for an option originating from within rather than from abroad. This dissertation advances the premise that acknowledging ‘the other’ is necessary for generating dialectical conversations in which diverse actors recognize each other as equals and open themselves to discover their differences and commonalities to construct better ways for co-operation. Here, the ‘others’ are those states that remain on the margins and usually struggle the most when incorporating the standards that result from the transnational processes in which global standards emerge. Legal transplants have supported the efforts of globalization and legal convergence while local contexts struggle to incorporate and adapt to them. This project identifies that there is a tension between what is expected from local legal systems to advance convergence and the implementation of global standards in local contexts. Convergence suggests top-down solutions to problems of plurality by creating norms to which all members adhere, like the New York Convention or the UNCITRAL Model Law on Arbitration. Regardless of how much the processes for creating these international and transnational rules try to convey a message of inclusion, at international forums the conversations are still dominated by a small number of actors, who have gained a privileged, hegemonic position. Thus, the solutions offered there have not emerged from processes in which the ‘others’ were truly considered.  More recently, the next level of convergence uses the term ‘transnational’, conveying an idea of moving beyond the realm of nation-states to consider the diversity of actors that participate in the conversations, like transnational corporations or arbitral institutions. Yet, these 29  conversations are also dominated by hegemonic powers. Most of the transnational conversations occur at specialized forums, such as arbitration meetings, to which invitation is extended broadly but diverse representation of states is not secured. Thus, the outcomes of the forums and the suggested norms are built up from one specialized forum to the other. While the conversations are carried forward, they continue to leave voices marginalized. When common solutions or standards are advanced in these forums, they become akin to industry-specific customary agreements that are later used in practice under the argument that such standards have become the norm within that particular industry, market, or field.  2.3.2 Law as a social phenomenon Following on the idea of the relationship between law and society, and the importance of considering the social and cultural context in which norms operate, law is approached in this study as a social phenomenon using a perspective that emerges from considering the effects of legal aid projects in Latin America. James Gardner studied the US-American legal assistance programs in Latin America and offers important reflections on the complexity of the task attempted and reasons to understand their failure. He argues that these attempts to bring North American models into Latin America “often failed to appreciate strikingly different social, economic, political, and legal realities in Latin America.”65 Gardner explains that these programs were characterized in part by “a rather awkward mixture of goodwill, optimism, self-interest, arrogance, ethnocentricity, and simple lack of understanding.”66 He identifies at the center of the Law and Development movement a problematic ethnocentric view of the US-American lawyers and a mistaken attempt to reform the ‘Third World’ on an idealized self-image that neglected to consider the different social, political, economic, and legal realities of these countries. From his point of view, the legal assistance to Latin America “was inept, culturally unaware, and sociologically uninformed.” 67 According to Gardner, US-American legal aid programs found a constituency in certain Latin American countries seeking to leave behind formalistic legal models. They opened the door for these new ideas which took root among particular groups. From the four models that the                                                  65 James A. Gardner, Legal Imperialism: American Lawyers and Foreign Aid in Latin America (The University of Wisconsin Press: Wisconsin, 1980) at 4. 66 Ibid.  67 Ibid at 9. 30  US-Americans aimed at transferring to Latin America –methodological, educational, professional, and jurisprudential–,68 the professional (problem solving lawyers called ‘legal engineers’) and jurisprudential (their instrumental perspective of law) had a higher level of acceptance. These models were used to support parallel models already emerging in these countries, but the US models were also flawed and vulnerable to executive ordering and authoritarian abuse in the local contexts.  Latin American countries, along with other ‘Third World’ countries who were recipients of similar aid programs from the US, were not neutral recipients. The models were selectively rejected or adapted by local legal cultures. In particular, Gardner observes they were rejected, taken advantage of for the money they brought, or received and adapted to advance the interests of the local groups advocating for them. The reasons for these reactions were related to the local scenarios that the US-American lawyers encountered.69 The US-American ‘legal missionaries’ concurred with local initiatives already underway to create a symbiotic relationship from which both sides benefited for several years and worked under the Law and Development label.  Gardner argues for the importance of acknowledging diversity in the Latin American case studies which made him consider a unitary concept of law as inadequate for understanding the rich and complex ‘law and change process’. He suggests there are multiple types of law interacting with each other and, at many times, in law-against-law conflicts which he considered to be a complex and comprehensive, yet more realistic approach. For Gardner law is not a unitary entity or instrument that causes social change in a linear fashion, it is “a complex and differentiated social phenomenon, with various types of law and elements of legal culture                                                  68 These models are explained in detail in Gardner, supra note 65 at 249-275. Briefly, the methodological model is the US-American case and Socratic method of teaching law; educational is the basic US-American model and structure of legal education; professional is the US-American model of the lawyer as a pragmatic problem-solver and social engineer; and jurisprudential is the anti-formal, “rule skeptical”, and “instrumental” vision of law drawn mainly from American Legal Realism. 69 Gardner found that the models that were better received –professional and jurisprudential- were so because they met with local reformist movements that were already in place or gestating. There were initiatives that emerged from within the recipient countries that aimed at shifting their formalistic professional traditions, and the US-American assistance projects arrived just in time to provide an alternative that local groups were looking for. Gardner offers as an example the First Conference of Latin American Faculties of Law that took place in Mexico City on 1959, which produced a “Declaration of Principles on the Teaching of Law” which was a call for fundamental reorientation of Latin American legal education. See Gardner, supra note 65 at 56. 31  interacting, and conflicting, with each other and with broader processes of social and economic change.”70  This framework brings awareness that law-related problems are not unidirectional but more like a network in which there are several factors that determine the content and effects of law. Some of those factors are as complex as law itself and need to be explored with careful consideration. Mexico has been the recipient of multiple aid programs in topics such as economic growth, technology transfers, environment, agriculture, health, and democratic governance, and its legal system has received multiple influences from the US. One of the ‘expected’ avenues to address the problem of defining what is public policy in Mexico, could have been to import the approach from other ‘more advanced’ jurisdictions. However, this approach would have also been disconnected from the social and cultural factors that are related to law at the local level. It would continue the legal transplants trend while disregarding the results from those studies that have showed it has not been a fruitful avenue.  By considering law as a social phenomenon with various factors interacting and conflicting, local contexts can be analyzed in a holistic manner that is more aligned with their complexities. In order to make a contextualized analysis of public policy, this dissertation later suggests four factors –language, legal tradition, legal context, and legal culture– to understand public policy and analyzes how they inter-play in local settings to give meaning to the public policy exception. The analysis of these factors, in combination with the analysis of the Mexican framework and expertise of local actors, allow us to better understand the local context in which global standards on the public policy exception are interpreted and applied.    2.4 Realities of diversity: legal fields and legal cultures A couple of relevant studies bring attention to the realities of diversity by studying local conditions. These studies evidence the failures of transplants but more importantly pay attention to local dynamics; they further support the idea that the avenue for this project could not be the search for another transplant. First, Dezalay and Garth analyzed the processes of doing transplants of political and economic models from the United States to Latin America, using the                                                  70 Ibid, at 279. 32  cases of Argentina, Brazil, Chile, and Mexico.71 Their study is key to exposing dynamics that are still relevant regarding legal transplantation. They looked at the attempts done through various legal assistance projects in these countries and they found that there were certain cases where some transplants were successful.72 However, these successes were due to specific local situations at that moment that paired up with a development project; these projects found themselves immersed in what the authors call ‘local palace wars.’ Like Gardner, they found that development projects supported a particular elite or interest group in Latin America that endorsed them and opened the recipient country to advance the transplant. Dezalay and Garth explain the United States marked the path to be followed according to their interests, with the ‘well intentioned’ objective of bringing development to Latin American countries.73 Dezalay and Garth bring attention to the fact that in the early 2000s, law was again central to the development agenda, despite the evidence offered by the several studies done on the conceded failure of the L&D movement. The new wave of L&D was also giving minimal attention to the social context and the local structures of state power. The authors renewed attention to the place of law in the specific contexts to which law was exported. They argue that individuals and groups in the north and south, center and periphery, fight for power and influence by pursuing ‘international strategies.’74 These authors found that local situations or struggles (local palace wars) influenced the success of the ‘imports’75 as they were shaped by national agendas and national histories. For                                                  71 Dezalay & Garth, Palace Wars, supra note 13.  72 Yves Dezalay and Bryant Garth, “The Import and Export of Law and Legal Institutions: International Strategies in National Palace Wars” in David Nelken & Johannes Feest, eds, Adapting Legal Cultures (Hart Publishing, 2001) [Import and Export]. This chapter was published before the full study was made public, in it they identified concrete examples of successful transplants like the model of the corporate law firm in Mexico, compulsory mediation in the judicial process in Argentina, the environmental impact statement in environmental regulation, the public interest law firm in Argentina. 73 Similar to Gardner, they addressed in detail the interest of the USA, the events happening there and in the world, as well as how these shaped the changes in the model to be followed by Latin American countries. 74 Their research strategy had two main components: to use law, legal actors and legal institutions as the point of entry to local struggles in the selected countries and to use the concept of ‘international strategies’ to study the relationship between global influences and state transformations. International strategies are the way in which local actors use foreign capital (resources, academic degrees, contacts legitimacy, expertise) to gain local power. 75 As part of their research design, Dezalay and Garth tried to avoid the use of the terms ‘legal transplants’ and ‘legal culture,’ instead they focus on the processes of import and export. They explain that this language is used by those who define transplants in terms of center and periphery, north and south, while their import/export approach is better suited because we all participate in them. See: Dezalay and Garth, Import and Export, supra note 72 at 243. 33  example, the “technopols” 76 –well educated local elites with political power– supported processes of legal transplantation in the last decade of the 20th century and the beginning of the 21st. Dezalay and Garth’s research further explored local struggles, influences, and motivations that promoted transplants or imports and how they were received. The authors concluded that transplants had either failed outright or were partial successes mainly because they failed to acknowledge the local context, the role that law has in these countries, their local structures, and the power relationships they sustain. Nevertheless, they concluded that the transplant trend continues apace as if it is the duty of every new generation to complete the attempted transplant or make it right.77 The second study by Nicholson and Guillespie also recognizes that legal transfers continue and explains that interpretive approaches scholarship seeks to understand whether and how transfers take hold.78 They argue that the mere recognition of plurality and localness of legal systems, and how they influence law and development are insufficient to advance the field; they suggest to refocus on the interpretation of legal transfers by local stakeholders and actors involved in the field.79 According to their findings, development aid in the 21st century places support for the rule of law alongside economic reform to emphasize the ‘social’ side of development –which includes good governance, international human rights, and poverty alleviation.80 Nicholson and Guillespie point to evidence that legal transplants take root in ways that most of the time do not align with the donors’ vision of them. Meanwhile, donors explain the failures as problems of design or implementation, and on the lack of abilities of recipients to                                                  76 Technopols promoted political reforms to protect liberal economic policies; they were highly educated in US universities and endorsed neoliberal economic models in Latin America, while supporting the discourses of human rights and democracy. Technopols invested much in their international state expertise to gain legitimacy with their connections to the US –in the form of academic degrees, publications and teaching experience- and to situate themselves in the market of expertise modeled on the US. They were part of an elite that was counter attacking the establishment and they used international strategies to find new opportunities to produce state transformations. This is what the authors identified as the internationalization of palace wars, a strategy that is used to challenge the hegemony of a traditional state elite. Dezalay & Garth, Palace Wars, supra note 13 at 28 & 34. 77 Ibid at 235. 78 Penelope Nicholson & John Gillespie, “Taking the Interpretation of Legal Transfers Seriously: The Challenge for Law and Development” in John Guillepie & Pip Nicholson, eds, Law and Development Global Discourses of Legal Transfers (Cambridge, UK: Cambridge University Press, 2012) at 1.  79 Ibid at 8.  80 Ibid at 20. According to the authors, only in 2008, the funds for legal and judicial development reform projects exceeded US$1.8 billions, in addition to the funds allocated by transnational donors like the World Bank, EU Institutions, and United Nations agencies. The leading donor countries were the United States, Australia, the United Kingdom, Germany, Canada, and Sweden. 34  incorporate the transfer. Nevertheless, donors continue having faith in these projects and continue funding them. The authors point out there is still an assumption to underestimate local regimes with the perpetuated view among donors that legal knowledge is concentrated in the ‘developed core’.81 Nicholson and Guillespie suggest refocusing the analysis on the social demand for legal transfers in recipient countries. For them, it is problematic that there is a continued assumption that legal meaning is an objective reality, which is encoded in specific ‘global scripts’82 that can travel from one system and be adopted in another. What donors are not considering is that the recipients can and do construct their own meanings, therefore Nicholson and Guillespie suggested that future projects need to be designed taking into account the local interpretation of legal transfers because absolute transfers do not happen, they are adapted by local interpretive communities.83 This requires considering what is being transferred and who is interpreting it at the local level, both factors which will determine how the transfers take root. While these factors continue to be neglected, the aid projects will continue to take root in ways that do not necessarily align with the donors’ objectives because “recipients often interpret global scripts according to a set of norms, epistemic assumptions, and power frameworks that differ from those advanced by donors.”84 By considering the realities of diversity, these studies invite us to pay closer attention to the local dynamic and the way in which local interpretive communities receive foreign influence, incorporate it, and interpret it. The import/export or legal transplant dynamics are a current issue but there is expanded awareness of the effects of attempting to do pure transplants. These studies broaden the consciousness of doing contextualized initiatives building on their results. Globalization and convergence are forces that will continue but these studies bring the attention back to consider the particular characteristics of a legal system, including its legal framework and more particular elements like legal culture and local dynamics to understand them in their own terms. These studies lead us to engage in ways to look at national legal systems with more                                                  81 Nicholson and Gillespie, supra note 78 at 5-6. 82 Nicholson and Guillespie use this term to refer to international treaties, legal principles and standards that are defined in the international arena, mainly by the dominant Western actors. Ibid at 12.   83 Ibid at 15.  84 Ibid at 14.  35  openness and curiosity. Two elements that facilitate paying attention to diversity and making contextualized initiatives are the legal field and legal culture that are examined next.  2.4.1 The legal field Acknowledgment of diversity and giving attention to local conditions has brought more careful and purposeful consideration of the place where law is expected to generate change. If legal pluralism is recognized as a feature of social organization85 and it is agreed that law and the social context must be inspected together to understand how certain legal institutions work, it follows that the space where these interactions happen is of fundamental importance to understand the local arrangements where global standards are applied. The individuals act not in a vacuum but in norm-filled spaces. Law is created and applied within a specific space. Sally F. Moore’s idea of ‘semi-autonomous social fields’ has been useful to understand the constant interactions and reciprocal influences among social fields.86 Bourdieu’s concept of ‘field’ is, thus, a useful tool to look at the space of study. Bourdieu’s field is a structured, bounded space where social agents, i.e. individuals or institutions, have a position they compete to maintain; where there are dominant and dominated actors.87  He argues that fields can have different shapes and their boundaries are often contested. Furthermore, a field is a human construction with its own set of beliefs, it constitutes a little self-contained world with its own patterns that has a certain degree of predictability and operates semi-autonomously. Bourdieu argues that social agents belong to more than one social field at a time. Social field practices and dominant social agents are similar between social fields and they function in a process of mutual influence and in an ongoing co-construction among themselves.  One of these fields is the ‘juridical field’, which Bourdieu explains is a social universe that “cannot be neglected if we wish to understand the social significance of the law, for it is within this universe that juridical authority is produced and exercised.”88 The juridical field takes into account the social side of law; it acknowledges that the field’s specific logic is determined                                                  85 John Griffiths, “What is Legal Pluralism?” (1986) 24 Journal of Legal Pluralism 1. 86 Sally F. Moore, “Law and Social Change: the semi-autonomous social field as an appropriate subject of study” (1972-1973) 7 Law and Society Review 719. 87 Patricia Thomson, “Field” in Michael Grenfell, ed, Pierre Bourdieu: Key Concepts (Durham, GBR: Acumen, 2008). 88 Pierre Bourdieu, “The Force of Law: Toward a Sociology of the Juridical Field” (1987) 38 Hastings Law Journal 805, at 816. 36  by factors that include the power relations that structure it and the internal logic of juridical functioning which constrains actions within it. From this point of view, law does not exist in isolation but interacts and is influenced by social and cultural factors.   The ideas of semi-autonomous social fields and legal fields are used here to look at phenomena that occur at the national and transnational levels that are examined in this study. On one side, the globalization of liberal legal norms looks at the dynamics at the transnational level by examining issues of convergence and pluralism, the law and development discourse, its critique, responses to diversity, and by presenting the New York Convention as an expression of globalization and convergence. At the national level, the Mexican legal field is used as an example of local legal arrangements to evidence challenges in the implementation of those global standards. This study aims to understand the logic of a legal field around the public policy exception by looking at Mexico’s legal framework, scholarship, court precedents, and perspectives of local legal actors.   2.4.2 Legal culture  Bourdieu’s idea on legal fields invites examination of legal culture. Robert Cover suggested that the creation of legal meaning takes palace through an essentially cultural medium and the process of creating legal meaning is collective or social.89 Since this research is looking at how the local actors give content to the notion of public policy in their context, then legal culture, is considered an important element for this analysis. Gardner’s approach to law and Gallie’s idea of essentially contested concepts, both refer to culture as an element that influences how certain institutions are studied, analyzed, and applied. Legal culture is that element which reminds us of our differences, and can be useful to advance a pluralist approach towards the study of legal concepts that impact the trade arena. David Nelken explained, “the main reason for resorting to the concept of legal culture is the way it reminds us that aspects of law normally come in “packages” of one sort or another… The idea of legal culture thus points to differences                                                  89 Robert M. Cover, “The Supreme Court, 1982 Term –Foreword: Nomos and Narrative” (1983) 97:1 Harvard Law Rev. 4 at 11. [Nomos and Narrative] 37  in the way features of law are themselves embedded in larger frameworks of social structure and culture which constitute and reveal the place of law in society.”90 Pitman Potter suggests that legal culture can be a “basis for understanding the relationship between imported and local norms... [as] legal culture constitutes the cognitive environment in which local and imported law norms intersect.”91 It is not part of the objectives of this research to define the specific content and boundaries of Mexican legal culture, but rather to examine how it operates to shape the notion of public policy and the way in which local actors use the concept in the context of international arbitration standards.  The importance of pondering the relevance of legal culture is evident in studies that have looked at the struggles derived from post-colonialism,92 as well as in legal pluralism studies,93 and strongly in the research on legal transfers.94 Lawrence Friedman puts significant attention on legal culture when analyzing the elements of a legal system –structural, substantive, and cultural–; he suggests the cultural elements are the “values and attitudes which bind the system together, and which determine the place of the legal system in the culture of the society as a whole.”95 Friedman emphasizes how little has been studied on the cultural attitudes towards law and for this reason there are details that have been missing when trying to understand the functioning of a particular legal system. Friedman explains legal culture “influence[s] all of the legal system [and the cultural aspects of law] are particularly important as the source of demands made on the system… It is the legal culture, the network of values and attitudes relating to law, which determines when and which and where people turn to law or government, or turn away.”96 Since then, studies on legal culture have increasingly connected legal culture with other variables that influence the study of law.                                                  90 David Nelken, “Towards a Sociology of Legal Adaptation” in David Nelken & Johannes Feest, eds., Adapting Legal Cultures (Portland, Or.: Hart Publishing, 2001) at 25. [Towards a Sociology]. 91 Pitman B. Potter, “Legal Reform in China: Institutions, Culture, and Selective Adaptation” (2004) 29 Law and Social Inquiry 465 at 475 and 477. 92 Ariel Meyerstein, “Between Law and Culture: Rwanda’s Gacaca and Postcolonial Legality” (2007) 32:2 Law & Social Inquiry 467; Didi Aguamanam & Wesley Pue, “Lawyers’ Professionalism, Colonialism, State Formation, and National Life in Nigeria, 1900-1960: ‘The Fighting Brigade of the People” (2007) 13:6 Journal for the Study of Race, Nation and Culture 769.  93 Emmanuel Melissaris, “The More the Merrier? A New Take on Legal Pluralism” (2004) 13(1) Social and Legal Studies 57 94 David Nelken, “Using the Concept of Legal Culture” (2004) 29 Australian Journal of Legal Philosophy 1. [Using Legal Culture] 95 Lawrence Friedman, “Legal Culture and Social Development” (1969) 4 Law and Society Review 29 at 34. 96 Ibid. 38  Legal transplants studies, although divided on the opinion of their feasibility, concur that legal culture is a very particular element to each society, and it is the one thing that cannot be transplanted. At the same time, they seem to agree that legal culture is a fundamental factor that plays a major role determining the outcome of the transplant. For example, following on Legrand’s argument that law is inseparable from its social and cultural context, Nelken adds that “a rule’s very existence depends on its interpretation and application within an interpretive community, and this is historically and culturally conditioned.”97 Legal