In its August 27, 2013 opinion in Corporación Mexicana de Mantenimiento Integral v. Pemex-Exploración y Producción, 962 F.Supp.2d 642 (S.D.N.Y. 2013), the US District Court for the Southern District of New York held that it had discretion to set aside a Mexican high court decision that vacated an arbitration award, because the decision violated basic notions of fairness.

A subsidiary of Pemex-Exploración y Producción (Pemex), a Mexican state-owned oil company, and Corporación Mexicana de Mantenimiento Integral (COMMISA), a subsidiary of an American company, contracted for COMMISA to build and install offshore natural gas platforms in the Gulf of Mexico. The contract provided, among other things, that any disputes should be conducted in Mexico City in accordance with the Conciliation and Arbitration Regulations of the International Chamber of Commerce (ICC). It also permitted Pemex to rescind the contract if COMMISA failed to comply with certain obligations. Several years later, each party charged the other with breaching certain contractual obligations. After COMMISA made a demand for arbitration, Pemex gave notice that it was terminating the contract by administrative rescission.

COMMISA challenged Pemex's rescission in the Mexican courts. The matter went up to the Mexican Supreme Court, which held that the rescission was constitutional and that Mexico's district courts had jurisdiction to hear contract disputes arising from administrative rescission. The Mexican court did not rule on the issue of arbitrability. While the Mexican court proceedings were unfolding, an ICC Tribunal was formed pursuant to COMMISA's earlier demand for arbitration of the dispute. The ICC arbitration panel ultimately awarded COMMISA what is now almost $400 million with interest for breach of contract against Pemex. The arbitral panel rejected Pemex's argument that the panel lacked jurisdiction in light of the Mexican court decision. COMMISA then filed a petition to confirm the arbitration award in the US District Court for the Southern District of New York, which the court confirmed.

Meanwhile in Mexico, Pemex tried to nullify the arbitration award through the court system. Pemex finally succeeded when the Mexican appellate court found that administrative rescissions were not arbitrable. The Mexican court found that it was unacceptable for arbitrators to resolve a matter of public policy, such as Pemex's administrative rescission of the contract, because the rescission was issued to safeguard the finances of the state, and that the proper venue was the Mexican district court. The court relied in part on a Mexican statute that came into effect after the parties' dispute began, which barred arbitrators from hearing administrative rescissions. However, the Mexican court asserted that it was not applying the law retroactively, but as a guiding principle. The court also cited a Mexican Supreme Court decision that did not involve arbitration. The court held that because the administrative rescission and breach of contract claims were "intertwined and inseparable," the arbitration panel was barred from hearing the breach of contract claim as well.

Following nullification of the arbitration award by the Mexican appellate court, on Pemex's motion the US Court of Appeals for the Second Circuit vacated the district court’s confirmation of the award and remanded the case to the Southern District of New York to address whether enforcement of the award should be denied because it had been set aside by a Mexican appellate court decision. On remand, the New York district court reconfirmed the arbitration award. In a matter of first instance, the New York district court examined its discretion under the Panama Convention and Federal Arbitration Act to confirm an arbitration award that a foreign country has held to be invalid.

The court found that it did have discretion to refuse to recognize an arbitration award that has been nullified, but that this discretion is narrow. Under the circumstances of this case, the court determined that the Mexican decision vacating the arbitration award violated basic notions of justice and that deference was therefore not required. The court emphasized that:

A US court has discretion to confirm a foreign arbitration award even where a competent authority in the jurisdiction in which the arbitration was held later nullified the award. This is especially true when the foreign decision vacating the award is unfair and violates basic notions of justice.