A foreign creditor preparing to enforce a commercial debt in Mexico may face a practical problem before the court has had an opportunity to attach the debtor’s assets: what if those assets disappear first?
Mexican commercial procedure provides a precautionary mechanism known as retención de bienes, or retention of assets, which can be used to preserve property under the conditions established by the Código de Comercio.
At first sight, this may appear unnecessary in an executive commercial proceeding. That procedure already provides for embargo — attachment of assets as part of enforcement. Why should a creditor need both?
The Mexican Supreme Court resolved precisely this question. In jurisprudence 1a./J. 48/2023 (11a.), digital record 2026431, the First Chamber held that precautionary retention may be used in an executive commercial proceeding independently of attachment because the two measures perform different functions.
For a creditor concerned that assets may be moved, dissipated or disposed of before effective enforcement, that distinction can be critical.
Why retention and attachment solve different problems
The issue reached the Supreme Court after two collegiate circuit courts adopted conflicting approaches.
One considered precautionary retention available because the rules governing precautionary measures apply generally to commercial proceedings, including executive proceedings. The other considered retention inappropriate where the Código de Comercio already provided the specific mechanism of attachment for executive commercial proceedings.
The Supreme Court rejected the view that the existence of attachment excludes precautionary retention.
In jurisprudence 1a./J. 48/2023 (11a.), the First Chamber concluded that retention under Article 1168 may be ordered in an executive commercial proceeding when its statutory requirements are satisfied. Nothing in the relevant provisions makes the measure incompatible with attachment.
The reason is practical as well as doctrinal.
Attachment is connected with the enforcement procedure applicable to executive instruments. The Supreme Court observed that the steps associated with execution and service may, in some circumstances, create an opportunity for a defendant to conceal assets.
Precautionary retention serves an earlier protective purpose. It can secure or immobilise property so that a future defendant cannot hide, dissipate, dispose of or transfer it before an eventual judgment can be effectively enforced.
Retention therefore protects the availability of assets; attachment performs its own function within the executive enforcement process.
Article 1410 of the Código de Comercio reinforces this distinction. When regulating the sale of assets following an enforcement judgment, it expressly refers to property that has been “retained or attached”. The Supreme Court relied on this wording as further evidence that the legislature contemplated both mechanisms within executive commercial litigation.
What must a creditor prove to obtain retention?
Precautionary retention is not automatic merely because a commercial debt is unpaid.
Article 1175 of the Código de Comercio establishes specific requirements. A creditor seeking the measure must first prove the existence of a liquid and enforceable claim.
The creditor must also state the value of the relief or property claimed and identify the relevant property with the required precision.
The remaining requirements depend in part on the nature of the underlying claim.
Where property has been provided as security or will be the subject of an action concerning rights in the property itself, the applicant must explain, under oath, the reasons for a well-founded fear that the assets will be hidden, dissipated, disposed of or transferred. If the property is insufficient to secure the debt, that insufficiency must be supported by the relevant valuation or documentation.
For personal claims, the applicant must state under oath that the debtor has no other known assets apart from those against which the measure is sought and must normally explain the well-founded reasons for fearing that the debtor will hide, dissipate or transfer them.
The creditor must also provide security for the damages that the precautionary measure could cause the debtor if the subsequent claim is not filed within the statutory period or if the defendant is ultimately absolved.
This requirement is important. Precautionary retention is designed to protect a legitimate enforcement interest, but it can materially restrict the debtor’s control over property before the underlying dispute has been finally determined. Mexican law therefore combines the preservation mechanism with protection against losses caused by an unjustified measure.
Money and bank deposits receive special treatment
Article 1168 contains an important rule for cash, money deposited with credit institutions and other fungible assets.
For these categories, the risk that the assets may be disposed of, hidden or dissipated is presumed for purposes of the provision, unless the person affected by the measure secures the amount of the debt.
Article 1175 correspondingly removes the ordinary requirement to explain the reasons for the feared concealment, dissipation or transfer where the relevant property consists of cash, bank deposits or other fungible assets.
That does not eliminate the other statutory requirements for obtaining precautionary retention. It does, however, make the nature of the targeted asset particularly important when a creditor is assessing whether the mechanism is available.
Bank accounts also raise a separate procedural question: how precautionary retention of funds operates in a particular commercial proceeding and what remedies are available to challenge the measure once it has been ordered. Those issues depend on the procedural setting and are examined separately in our analysis of freezing bank accounts in Mexican commercial proceedings.
Can property be retained before the debtor is heard?
Yes, where the statutory conditions for a prejudicial precautionary measure are satisfied.
Article 1177 allows the precautionary measures established by the Código de Comercio to be ordered either before the principal proceeding begins or after a proceeding has already commenced.
When the measure is requested as a prejudicial act, the court may order it without first summoning the person against whom it is sought once the statutory requirements have been fulfilled.
This feature explains much of the practical value identified by the Supreme Court.
If a creditor had to notify the prospective defendant before assets could be immobilised, the notice itself could undermine the protective purpose of the measure in a case involving a genuine risk of asset dissipation.
The absence of prior notice does not mean that the affected party has no procedural protection.
Under Article 1179, once retention has been carried out, the affected person is given three days to make the submissions considered appropriate. The measure must also be lifted if the defendant deposits the value or object claimed, provides a bond or secures the claimed amount with sufficient real property in accordance with the statutory rule.
The Código therefore separates two questions: whether advance notice would defeat the purpose of the measure, and what rights the affected party has after the assets have been secured.
A creditor who acts before filing suit must move quickly
Obtaining prejudicial retention is not a way to immobilise the debtor’s property indefinitely while deciding whether to litigate.
Article 1181 imposes a short deadline.
If the precautionary measure is executed before the main claim is filed and the proceeding is to continue in the same place where the measure was ordered, the applicant must bring the claim within three days.
If the main proceeding must be brought elsewhere, the Código provides for additional time calculated under its territorial-distance rule.
The applicant must then demonstrate to the judge who granted the precautionary measure that the claim was filed before the competent court within the further period specified by Article 1181.
The consequence of missing the requirement is significant. Under Article 1182, failure to comply results in the precautionary measure being revoked by the court on its own initiative, even if the affected party does not request revocation.
For a foreign creditor, this means that the litigation strategy should be ready before prejudicial retention is requested. The application for asset preservation and the principal claim should not be treated as unrelated steps.
Retention does not replace attachment
The Supreme Court’s 2023 jurisprudence should not be understood as allowing a creditor to obtain two interchangeable restraints merely to increase pressure on a debtor.
Its significance is more precise.
Retention and attachment may coexist because they have different legal purposes and procedural functions.
Precautionary retention addresses the danger that assets needed for effective recovery may cease to be available. Attachment operates within the executive procedure applicable to the creditor’s enforceable instrument.
This distinction is especially relevant where the creditor already has documentation capable of supporting an executive commercial action but has credible concerns about the preservation of the debtor’s assets.
The question is therefore not simply whether attachment will eventually be available.
The more useful question is: will the relevant assets still be available when attachment can effectively reach them?
What should a foreign creditor check before seeking retention?
Before relying on precautionary retention, a foreign creditor should normally establish:
- whether the claim is liquid and presently enforceable;
- which assets are to be targeted and whether they can be identified with sufficient precision;
- whether the underlying claim is personal or relates to particular secured property or rights in property;
- what evidence supports the statutory risk of concealment, dissipation, disposal or transfer where proof of that risk is required;
- whether other known assets affect the availability of retention in a personal claim;
- whether the target consists of cash, a bank deposit or another fungible asset to which the statutory presumption applies;
- what security may be required to cover potential damages caused by the measure; and
- whether the principal claim and supporting evidence are ready to be filed within the applicable deadline if retention is requested before proceedings begin.
These questions should be considered as part of the wider strategy for debt collection in Mexico, rather than after enforcement difficulties have already arisen.
The practical value of precautionary retention is largely about timing.
A creditor may possess a strong claim and an instrument suitable for executive commercial proceedings, yet still face a recovery problem if the assets that could satisfy the judgment are no longer available when enforcement reaches them.
Mexican law addresses that risk by allowing precautionary retention to operate alongside attachment when the statutory conditions are satisfied.
The Supreme Court’s jurisprudence 1a./J. 48/2023 (11a.) makes the distinction clear: the existence of attachment in executive commercial proceedings does not by itself exclude precautionary retention.
For a foreign creditor, the practical priority is therefore to identify the assets, determine whether the requirements for retention can be demonstrated, prepare the required security and ensure that the principal proceedings are ready to follow immediately where the measure is sought before suit.
Asset preservation can be most valuable before the debtor has an opportunity to make enforcement more difficult.
