GAB is pleased to publish this Guest Post by Carlos G. Guerrero-Orozco, a Mexican litigation attorney and partner at the law firm López Melih y Estrada in Mexico City.

Last month, the Mexican Supreme Court issued a landmark decision addressing corporate compliance programs in the context of a civil suit for damages. The decision brings Mexico closer to international practices, particularly those of the United States, where compliance frameworks have long been enforceable standards rather than aspirational corporate policies.

Case 11/2025 (here) decided by the Supreme Court, represents a milestone for compliance in Mexico’s private sector. It is the first time the Supreme Court has analyzed corporate conduct, defined compliance, and set corporate parameters for its enforcement.

What stands out in this case is the creativity of the underlying lawsuit. It marks the first time a third party has sought to enforce a company’s Code of Conduct and compliance program to claim civil liability.

The plaintiff not only requested damages for the unjustified termination of a commercial relationship but also argued that the proximate cause of the breach was the defendant’s violation of its own compliance program. This argument could open the door for liability when a company fails to enforce the internal rules it voluntarily established vis-à-vis third parties.

In its decision, the Supreme Court referred to the United Nations Convention against Corruption (UNCAC), noting that under Article 12, state parties are required to adopt measures to prevent corruption, strengthen accounting and auditing standards in the private sector, and establish sanctions for non-compliance.

The Court also stressed that internal protocols must apply to relationships with public officials, suppliers, investors, clients, and other stakeholders where there is a risk of corruption. The justices considered that the conduct of companies themselves –as well as their interactions with those actors– creates opportunities for corruption, underscoring the importance of having effective compliance programs.

This case is particularly relevant because Mexican companies have long lacked federal or national parameters for compliance implementation. Traditionally, they have been informally forced to follow guidelines and enforcement trends from the U.S. government, especially those tied to the Foreign Corrupt Practices Act and by the Department of Justice.

The Court ultimately concluded that the evidence was insufficient to sustain an award of punitive damages. That would have required the plaintiff to prove the defendant intended to directly harm it in connection with the alleged compliance violations through such as conflicts of interest, weak integrity controls, questionable supplier selection, or decisions influenced by improper commercial interests. It nevertheless held that the termination of the contractual relationship was unlawful, and ordered the defendant to compensate the plaintiff for the damage suffered.

A key reason for awarding actual damages was that when replacing the plaintiff, the defendant/supplier did not meet its own standards: the hiring process failed to follow formal procedures, as the defendant did not carry out a public tender to secure a replacement under the same terms as those applied to the plaintiff. Evidence presented during the trial showed that the new supplier lacked adequate training, equipment, and experience. Significantly, these deficiencies mirrored the compliance breaches alleged by the plaintiff.

The Court did not go all the way in holding that any breach of an internal compliance program was actionable. Compliance programs are internal self-regulation norms, it observed, whose violation may trigger sanctions within the corporation but do not by themselves create direct extra-contractual liability.

This precedent marks a significant step in Mexico’s legal and corporate debate. It places compliance squarely on both the public and private agenda, confirming the need for companies to adopt robust compliance programs. It also consolidates the evolution of legal remedies available to Mexican companies to prevent and sanction corruption and other forms of misconduct.

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