The rejection of the constitutional reform last Sunday and the decision of the Supreme Court regarding not declaring as unconstitutional the changes to the Law of the Electricity Industry (LIE) will leave the amparos as the way to define the future of the electric policy.
Until now, the amparos before competing judges have stopped all the changes implemented by the Executive. The courts granted a large number of suspensions to the companies to stop the modifications contained in the reform to the LIE, but the Supreme Court ordered to stop the substantive resolutions until defining the future of the instruments that sought to be declared unconstitutional: two constitutional controversies and an action of unconstitutionality. But neither was successful: the first two were rejected and the second did not reach eight votes to invalidate the entire document.
After that, the judges and courts will begin to resolve in depth the nearly 250 amparos that were filed to prevent the implementation of the secondary reform, which contains a large number of the precepts included in the constitutional reform, such as the review of contracts. and the order in which the electricity is taken.
The federal administration will be able to start the measures until the last suspension is revoked – a step before the substantive resolution – but the lawyers do not dare to give a deadline on how long this process will last. A part has already begun and the courts have begun to lift some of the suspensions, considering that the measures will cause damages until the moment of their application. And with this, the way for the federal government to begin to take the measures is becoming freer.
But the substantive decision has not been made and the resolution of the future of the amparos will remain in the district judges and in the collegiate courts that must now rule on the effects of the measures.
“The actions of the market depend on whether one is successful in its protection or not. Now we are going to be in a combination between the fact that there are some provisions of the law that are going to be applied, but perhaps the companies do nothing because they were not affected, and those that did and therefore protected themselves will most likely have the protection of federal justice and will exempt them from compliance with the law as it was reformed”, says Daniel Sánchez, of Baker & McKenzie.
Until now, the sources say, it is difficult to determine which parts of the reform to the LIE will be launched after the action of the Supreme Court. “It will be like a hybrid between what the law already establishes and is beginning to apply, and what was challenged and is going to be suspended,” says the Baker & McKenzie attorney.
After the Court’s vote –and obtaining more than eight votes–, some precepts were declared valid, such as the principles that the National Energy Control Center (Cenace) must follow to dispatch electricity, the concept of fraud to the law as grounds for revocation of a permit, as well as the review and probable cancellation of contracts with independent energy producers. Many others did not meet the number of votes to be removed from the legal framework, such as changing the methodology for the issuance of Clean Energy Certificates and prioritizing legacy power plants, those built before the energy reform, in the dispatch.
In the first case, the lawyers in the sector are divided between those who defend that they cannot be detained through amparo trials because the court’s decision set a precedent, and those who assure that the companies will be able to present amparos again in case the changes represent direct effects on them.
“The Supreme Court determined that certain portions of the reform were constitutional, such as the fact that the Energy Regulatory Commission (CRE) can revoke permits. On issues like that, and more specific, companies will have to defend themselves through concrete battles,” says José María Lujambio, a lawyer in the sector and former legal director of the regulator.
In any case, the specialists assure that a new wave of injunctions will reach the sector. And this process could leave the LIE reform as “an elephant in the room,” says Lujambio.
Companies have already begun to prepare strategies and wait for failures individually to determine the actions to follow. International arbitrations are not ruled out yet, but that is still a major step.
“That for the Court these articles continue to be valid, does not mean that they cannot continue to be combated in the amparos. The amparos are going to continue and we could have the district courts resolve, in some of them, such as those specialized in economic matters, that they do threaten competition, ”explains Carlos Ochoa, partner of the Energy Practice of the Holland & Knight firm. . “You will have enough elements to defend yourself in a second stage.”
After the refusal in Congress, the president has based his plan B on his reform of the Mining Law to nationalize lithium and on the decision of the Supreme Court. But of the effectiveness of the second, the jurists of the sector are not sure.