Iberdrola Wins Appeal Against US$500 Million Fine in Mexico

A federal judge has granted Spanish energy company Iberdrola an injunction against a fine imposed in Mexico for the alleged illegal sale of electricity. The decision represents a key legal development in a long-running dispute between the company and Mexican authorities.

Judge Víctor Luna of the Third District Court for Administrative Matters in Economic Competition granted Iberdrola the injunction, ruling that the now-defunct CRE violated legal and constitutional principles when it imposed the fine. The ruling highlighted omissions in addressing Iberdrola’s arguments, the prohibition against using evidence supplied illegally by the Mexican tax authority (SAT), and the company’s right not to self-incriminate.

The court ordered the competent energy authority to issue a new resolution with “jurisdictional freedom” but to consider Iberdrola’s arguments. This allows regulators to reaffirm the decision, but only after addressing the procedural deficiencies cited by the judge.

CRE had fined Iberdrola with MX$9.145 billion (US$500 million) on May 25, 2022, for allegedly selling electricity illegally through self-supply contracts. Iberdrola Mexico told Bloomberg Línea that it had “always” considered the fine unfounded and pursued legal recourse accordingly. “The company to which the fine was imposed was sold, leaving Iberdrola Mexico’s perimeter. Therefore, the company, the fine, and its respective legal process are no longer part of Iberdrola Mexico,” the company stated.

President Claudia Sheinbaum previously said that the litigation will continue despite the extinction of CRE, which has since been replaced by CNE. The new authority may appeal the decision in a Mexican court, and the case could ultimately reach the Supreme Court, which is undergoing reforms that include the appointment of new justices through popular election aligned with the ruling MORENA party.