Villamorey Dividend Prescription Action Against Lisa Defeated

I. Ordinary Action for Extinctive Prescription

Judgement

Villamorey, S.A., a Panamanian entity within the Avicola Villalobos Group, filed an ordinary action for extinctive prescription on May 10, 2017 against Lisa, S.A., seeking to extinguish the obligation to pay dividends decreed at the shareholders' assemblies of April 27, 2010 and July 5, 2011, invoking the five-year period under Article 1508 of the Civil Code. Lisa answered in the negative and filed four peremptory exceptions, arguing the lack of truthfulness in the facts alleged, the absence of legal prerequisites for prescription, interruption by embargo orders decreed in multiple proceedings brought by Avicola Group entities (Cases 01044-2012-00279, 01045-2012-00210, 01045-2012-00242, 01044-2012-00229, 01045-2012-00179, and 01163-2012-00178), and the non-existence of the prescription as dividends constitute an imprescriptible property right. Lisa documented that at the November 22, 2016 shareholders' assembly it demanded immediate payment of Q99,902,815.00 in dividends, and that Villamorey's own board secretary acknowledged Guatemalan court embargoes preventing payment without raising any prescription defense. Lisa also presented November 2018 letters from vice-president Gabriel Arturo Muadi refusing payment due to the embargoes, establishing the central contradiction: the entities that obtained the embargoes sought to extinguish the obligation arising from the very non-payment they caused.

The Court found that exigibility was not established. Villamorey failed to provide evidence showing when the dividends became effectively demandable. The accounting certification proved the existence of accounts payable but did not identify Lisa as the specific beneficiary; the board secretary's certificates confirmed the assemblies occurred but not the payee of the distribution. The Court also denied Lisa's four exceptions for insufficient evidence, finding that the judicial reports offered only established the existence of proceedings against Lisa without proving the substantive matters alleged. The judgment was rendered more than eight years after the complaint was filed. Villamorey's obligation to pay the decreed dividends was not extinguished.

II. Appeal

Appeal

Lisa filed its appeal hearing brief on October 17, 2025 before the Fifth Chamber, articulating three lines of defense against Villamorey's appeal. First, Lisa argued the territorial incompetence of Guatemalan courts: both entities were incorporated under Panama's General Corporation Law, the assemblies were held in Panama, and Guatemala's Mercantile Registry confirmed neither entity has a registered domicile in the country. Lisa highlighted the contradiction of invoking Panamanian corporate forms to create the obligation (where the board of directors may approve profit distributions) while applying Guatemalan law to extinguish it. Second, Lisa demonstrated the legal impossibility of prescription through Villamorey's own party declaration admitting the existence of active embargoes, and reports from three courts (Cases 01044-2012-00279, 01043-2012-00193, and 01042-2012-00139) confirming active precautionary measures over Lisa's shares, dividends, and participation in Villamorey. Third, Lisa argued the absence of exigibility due to lack of determination of the individual amount, form, and date of payment. Lisa also noted that the Avicola Group filed more than seventy dividend prescription lawsuits, and that a significant number were rejected by the courts for lacking the elements of determination and exigibility.

Appeal 343-2025

The Fifth Chamber rejected all six of Villamorey's grievances. The central analysis drew a decisive distinction between proving shareholder status and proving creditor status for specific dividends. Villamorey's certifications proved that Lisa was a shareholder and that a dividend payable existed, but did not demonstrate that the dividends decreed in 2010 and 2011 were specifically payable to Lisa. The Court affirmed the July 11, 2025 judgment in full, declared the appeal without merit, and imposed costs on Villamorey.

III. Constitutional Amparo

Amparo Ruling

Villamorey filed a constitutional amparo before the First Chamber of the Court of Appeals challenging the Eighth Civil Court's recognition of Lisa's appearance in the prescription proceeding. The argument was that the notary who authorized Lisa's judicial mandate, being Guatemalan, lacked competence to certify the sufficiency of legal representation for a company incorporated under Panamanian law, rendering the instrument null under Article 29(5) of the Notarial Code. Lisa maintained that the mandate was properly registered with the Electronic Registry of Powers and that the proper mechanism to challenge its validity was a nullity action against the public instrument, not an amparo or a revocation motion.

The Court concluded that amparo cannot function as a reviewing instance of ordinary judicial decisions, that the challenged ruling was issued within the lower court's legal authority, and that the validity of a mandate formally executed and registered cannot be challenged through that avenue. The amparo was denied, Villamorey was ordered to pay costs, and a Q1,000.00 fine was imposed on attorney Elias Jose Arriaza Saenz. Had the challenge succeeded, it would have left Lisa without legal representation in the prescription action.

IV. Nullity Action Against Protocolization

Motion

Villamorey filed an absolute nullity action against the protocolization of Order 898 from Panama's Twelfth Circuit Civil Court, which approved a judicial transaction between Lisa, S.A. and BDT Investments, Inc. The instrument had been used by BDT to request participation as a third-party co-adjuvant in the prescription action, a request the Court denied.

The answer, filed on the same November 5, 2025, raised five peremptory exceptions along three lines: (1) Villamorey lacks standing and interest under Article 1302 of the Civil Code, as it was not a party to the transaction or the protocolization, and the instrument produced no effects in its sphere of rights; (2) the protocolization was performed under Article 63, paragraph one, of the Notarial Code, which authorizes notaries to protocolize judicial documents "by and before themselves" without requiring any party's request; and (3) subsidiarily, any defect would constitute a relative nullity susceptible to confirmation, without affecting the underlying Panamanian judicial transaction. This proceeding remains pending.