Mexican judge halts electricity law, as president says top court should rule

MEXICO CITY (Reuters) - A Mexican court ordered a definitive suspension of the government’s contentious new electricity law in a ruling published Friday, just as President Andres Manuel Lopez Obrador called for the Supreme Court to settle the matter.

A cornerstone of Lopez Obrador’s drive to bolster state control of the energy market, the law aims to strengthen national power company the Comision Federal de Electricidad (CFE).

The president argues the previous administration skewed the electricity market in favor of private operators, and renewable energy providers are concerned that the changes threaten their businesses in Mexico.

“Let’s have the Supreme Court resolve this,” Lopez Obrador told a regular news conference. “If it’s declared unconstitutional because the interests of business groups win out ... if the judges don’t act with justice, you’d have to take the word off the ‘Supreme Court of Justice,’” he added.

The definitive suspension comes a week after a judge ordered a temporary freeze to the legislation passed by Congress this month, citing competition concerns. It was not clear how soon the dispute could reach Mexico’s top court.

Lopez Obrador noted the Supreme Court could only strike down the law if two-thirds of its members vote against it. That meant if four of the court’s 11 judges upheld it, it will stand, said the president, who has appointed three of the justices so far.

A leftist who has repeatedly clashed with business, Lopez Obrador also noted breadmaker Bimbo and retailer Walmart Inc., whose local unit is Walmart de Mexico , both filed legal challenges against the law. He described the appeals as an effort to maintain favorable terms from the earlier regulation. “It’s an affront,” he said.

Walmart declined to comment, while Bimbo did not immediately respond to a request for comment.

The judge’s suspension order said the freeze on the law had been requested by “two companies that carry out regulated activities in the electricity sector,” without naming the firms.

Reporting by Adriana Barrera and Daina Beth Solomon; Editing by Dave Graham and Aurora Ellis