Integral, Preventive Approach Tackles Every Client Issue

Q: How did the firm come about, and what have been some notable recent projects?

A: Von Wobeser y Sierra is a law firm that was founded in Mexico over 35 years ago. It started as a small corporate law firm and now we employ over 100 lawyers. We focus on two main areas: corporate law and litigation and arbitration, which is a blend not often seen in Mexico. We provide a comprehensive, integral service to our clients with a preventive approach that includes perspectives from the litigation and arbitration ambits. We already know where disputes and conflicts might arise, so we attempt to tackle them early on. The firm focuses on several industry groups, including natural energy sources, but we also dabble in the automotive, health and science, banking, finance and real estate sectors. We work in all practice areas, except criminal law and family law.

The firm has been involved in some big projects recently. Major clients include Anheuser-Busch InBev, Coca-Cola, the Mars Family, BMW and Lala. For BMW, we helped power their facility in San Luis Potosi with an onsite solar project. This was a pioneering project that combined an inside-the-fence project through an isolated supply scheme, combined with the qualified supplier scheme through the new Wholesale Electricity Market. In the energy sector, the firm has supported Ienova, Mitsui, Mitsubishi, Ammper, Prana Power and Invenergy. Recently, we participated in the financing of the Fenicias Wind Park, which was sold to Grupo México. We support players throughout the sector, including those in the supply chain, power producers and off-takers.  We continuously support Anheuser-Busch InBev in their mission to switch to a 100 percent renewable energy via multiple PPAs with Iberdrola and other energy suppliers.

Q: How has demand for the firm’s services in the energy industry changed recently?

A: We have seen a decrease in transactions and new projects for the firm’s M&A team. There are still some deals the company is involved in, but they were already in the pipeline. On the other side, the arbitration, litigation and dispute areas are working at full capacity, as well as our partner who is working on the antitrust law with COFECE. Fortunately, we have seen other business deals arise in the energy sector. These include clients from different countries examining legal options through bilateral or multilateral agreements. Another area the firm is now working on are claims for force majeure as a result of the pandemic affecting compliance with several obligations regarding PPAs, EPCs, O&Ms and project development. Clients are seeking to inform their contractual counterparties of these issues. Companies need to comply with the law and the formalities stipulated in their contracts in order to invoke a force majeure clause, which requires specific analysis.

Q: Do these preventive approaches work well for companies fighting SENER and CENACE’s measures too?

A: Different actors could be affected by the resolutions issued by CENACE, SENER and CRE in May of this year. Power producers are directly affected here because CENACE’s agreement suspends preoperational tests for the interconnection of projects. Some clients saw their renewable energy projects stopped as they were in this preoperational phase. Our strategy was first, to challenge this agreement via an amparo claim, and second, to focus on the company’s own agreements it would normally need to comply with, for example, to supply energy to off-takers. If they are not able to achieve this because of the suspension and its obstacles, it is not sufficient to simply blame it on this. It is therefore a dual strategy. Off-takers, however, have to deal with a different scenario. The agreements between SENER and CENACE do not directly affect them. First, there would have to be a noncompliance issue coming from their supplier, which means not being able to provide energy according to their PPA. Then, the off-taker has several rights and mechanisms that they can activate. There are several procedural obstacles they may encounter to directly challenge the government, so proving that they have a direct judicial interest is difficult.

Q: How is the firm using legal arguments to represent energy generators?

A: To win these constitutional claims, you need the procedural side of the law, and you need to provide substantial arguments to counter the essence and purpose of these agreements. The government argues that the reliability and security of the grid is the main reason why wind and solar projects are not to be interconnected. The government needs to have technical support to back this claim. We believe there is not enough substance to back it up. Therefore, evidence from technical experts, who will need to do an analysis, is required. If you provide details, then you can prove them wrong. If you focus on both the substance and the procedure, you have a better chance of winning your amparo in the final stage. There are additional arguments that we can use, such as the constitutional guarantee, based on article 4, that says everyone has the right to a healthy environment. Is our government really complying with its commitments to halt climate change and provide cleaner energy? We do not think so.

Q: How does the firm assess the position of the judicial power in the current regulatory rifts?

A: What we have been seeing so far is pleasing. It is similar to the Clean Energy Certificates (CELs), where the judicial branch stopped and reverted the agreement, which aimed to flood our Wholesale Energy Market with CELs from old CFE power plants. The question is whether these old hydro-based and nuclear plants are considered “clean.” Nuclear energy might not generate emissions, for instance, but it generates radioactive waste. It was a good sign that this administration was subjected to the neutral separation of powers that stopped the arbitrary resolutions that affect the energy sector. From then on, all the amparo claims submitted after CENACE published its measure have obtained provisional suspensions through the judiciary. Definite suspensions are being granted as well. One of the judges involved is a former colleague at Von Wobeser y Sierra. He is independent and neutral, and has many colleagues with the same profile. I hope that we will see this as part of a continuing trend of a neutral judiciary that resolves issues in accordance with applicable legal frameworks in the interest of the nation.

Q: Is the firm observing constructive approaches between public and private sectors as well?

A: We have seen CFE issue public tenders for the development of clean energy projects. Other important projects are being developed, such as combined cycle power plants, where some of our clients are participating. However, our clients tell us that these projects are subject to strict anti-corruption regulation, and that the awarding of contracts has been fair and in compliance with applicable law. It is not something often published in newspapers, but CFE is aiming to meet energy supply requirements in Baja California with moveable clean energy generation plants. The hurricane season is approaching, and Baja California has a sensitive grid, which is not connected to the main one. The population suffers from electricity scarcity, so it is good to see that CFE is working along with private players to attend to these needs pre-emptively. It would be better if there was more transparency, but addressing these needs is great.

Q: How does Von Wobeser y Sierra assess CFE’s call for private companies to contribute more to Mexico’s grid?

What we see is that private companies are trying to implement the best technologies to interconnect their projects, while investing many resources. Some projects are considering storage, despite its costs. These companies are being proactive in seeking solutions, even though we are not seeing the same actions from the government, which has been canceling other important projects such as transmission lines in Oaxaca and Baja California and not issuing any new tenders related to them. The government should put in more from their side and do their work to invest in infrastructure related to transmission and distribution lines. They are trying to put these costs on the private players, who are willing to absorb some of it and do some of the work as well. But in the end, that is the obligation of the government, which needs to do a lot more in this area.

Q: How will Von Wobeser y Sierra achieve its goals this year?

A: We have been working for several years on an internal transition project. The company has grown from seven partners to 16. Therefore, we have been busy communicating the company’s culture to our lawyers and all employees, so that the company is united and can provide better results to our clients. This is a priority for us; to grow deeper roots and transmit our culture to everyone who works for us. Now is the time where collaboration matters the most. By uniting our different areas, we can provide the best available service to our clients. The company prefers not to work on a project basis, but to keep clients for the long run, sometimes for 30 years and more. By always strengthening our relationships and helping our clients through the pandemic, we do not have to rely on other projects. This will be the main purpose for this extraordinary year, which also requires extraordinary measures.

Von Wobeser y Sierra is a law firm founded in 1986. It offers integral legal solutions through its 16 practice areas. In the energy sector, it focuses on helping private players navigate Mexico’s legal landscape, as well as on environmental issues.