6. Under what circumstances would it be more convenient to rely on Mexican courts for the direct recovery of debt, choosing therefore and including a Mexican venue provision in our contract (to be subject to the jurisdiction of Mexican courts)?

Much of this decision has to do with practical reasons, that is, when will a Mexican court provide for faster, less expensive and still safe proceedings for your recovery of debt.

Generally, a non-complex contested commercial case will take approximately one year to be resolved in a Mexican court, without adding an appeal process and any constitutional injunction proceedings, which could ad up another 9 to 12 months. That time could very well double in a complex commercial dispute or a collection case involving a large amount of money.

It is probably only in these two last scenarios where you could consider choosing a foreign court or arbitration for resolving your disputes instead of a Mexican court, but not in the first mentioned, because of cost-effective reasons.

Just to get an idea, the following costs should be considered when thinking about bringing a claim to a foreign court or an arbitration tribunal:

· Arbitration costs. According to the International Chamber of Commerce (ICC), costs add up to $5,875 dollars for a $25,000 dollars case, and $13,000 dollars for a $100,000 dollars case, for arbitrators' fees (one, and not including his expenses) and administrative expenses. In Mexico, the Arbitration Center of Mexico (CAM) charges around $7,700 dollars for arbitrators fees (also one, and not including expenses) and administrative expenses for any lawsuit of up to $100,000 dollars.

· Counsel's fees for arbitration. Lawyers involved in arbitration generally will charge an hourly fee for their services, and not a fixed fee or a contingency fee.

· Costs for service of process. If you are going to bring a case in a foreign court and your debtor is located in Mexico, you will still have to comply in strict manner with Mexican procedure rules for proper service of process in Mexico. That means you will have to go through a Mexican court to serve the defendant properly once a formal request has been done through a letter rogatory from the foreign court. Failure to do this will invalidate your judgment and will make it unenforceable. This service will require the help of counsel in Mexico, who will generally charge an hourly fee. (It is also recommended to at least substantially comply with Mexican procedure rules for the service of process during arbitration. Failure to do this could allow a defendant to argue infringement of his fundamental rights provided under the Mexican Constitution).

· Costs for enforcing a judgment. Again, you are going to need the help of counsel in Mexico to enforce a judgment. They can charge either hourly fees or based on contingency.

Adding up all these costs (without considering pre-judgment remedies), you would realize that a recovery for a modest amount of money may not result in a profitable business after all if filing suit outside of Mexico or commencing arbitration.

For this reason, we believe that collection cases worth $100,000.00 dollars or less are best pursued directly through a Mexican court.

You should be confident that Mexican courts are each day more and more reliable and efficient, especially for these kinds of cases. Retaining a counsel in Mexico for collection will waive all the above-mentioned costs, since they usually charge a contingency fee.

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