CC upholds rejection of Cerro Colorado's ordinary complaint; dividend prescription must proceed through summary trial
Sep 20 2022
Constitutional Court
The Constitutional Court (Corte de Constitucionalidad), in its ruling of September 20, 2022, denied the appeal filed by Cerro Colorado, S.A. against the first-instance amparo ruling that had confirmed the decision of the Fifth Civil Court of First Instance of Guatemala rejecting Cerro Colorado's ordinary lawsuit for extinctive prescription of dividend payment obligations against Lisa, S.A. The Court held that the claim was eminently commercial in nature and had to be litigated through summary proceedings under Article 1039 of the Commercial Code, definitively closing this avenue of attack against Lisa's dividend rights.
Cerro Colorado, S.A. filed an ordinary lawsuit for extinctive, negative, or liberatory prescription of dividend payment obligations against Lisa, S.A. before the Fifth Civil Court of First Instance of Guatemala (Case No. 01046-2020-00057). The complaint sought to declare time-barred the dividends corresponding to the fiscal year from January 1 through December 31, 2013, whose distribution was approved at the annual ordinary general shareholders' assembly of June 9, 2014.
The complaint was initially admitted and Lisa was served. However, Lisa filed a revocation motion arguing that ordinary proceedings were not the proper procedural route, since both parties were mercantile entities and the Commercial Code mandated summary proceedings. In the order of December 7, 2020, the judge granted Lisa's revocation and rejected the complaint.
Cerro Colorado filed an amparo before the Fifth Chamber of the Civil and Commercial Court of Appeals, alleging violations of its rights to defense, petition, free access to courts, justice, and effective judicial protection. The Chamber denied the amparo on April 20, 2021, ordered Cerro Colorado to pay costs, and imposed a fine of Q1,000 on its attorney. Cerro Colorado appealed to the Constitutional Court.
Cerro Colorado, S.A. alleged that the trial judge violated its constitutional rights by rejecting the complaint, advancing four arguments: (i) prescription is governed by Articles 1501 through 1516 of the Civil Code, so it was improper to apply Article 1039 of the Commercial Code merely because the parties were merchants; (ii) under the principle of specialty in Article 13 of the Judiciary Act, the Civil Code is the specific law governing prescription, and since no specific procedural route was designated, ordinary proceedings applied under Article 96 of the Civil and Commercial Procedure Code; (iii) the judge erroneously interpreted the dispute-resolution clause in the company's articles of incorporation; and (iv) the complaint met all legal requirements that had already been reviewed when it was initially admitted.
On appeal, the petitioner added that Lisa had first filed a declinatory exception and then a revocation motion, which violated due process by failing to respect the logical order of procedural remedies.
Reproductores Avícolas, S.A., as holder of the petitioning entity's rights, reiterated these arguments during the hearing.
Lisa, S.A., as the interested third party, maintained that no constitutional injury had occurred. The trial judge issued her ruling in compliance with the applicable rules by determining that the complaint was not filed through the correct procedural route. Lisa characterized the petitioner's claim as an attempt to convert the amparo into a third-instance review of what had already been decided in ordinary jurisdiction.
The Constitutional Court analyzed the central issue: whether the trial judge, by rejecting the complaint in ordinary proceedings, violated the constitutional rights invoked by the petitioner.
On the applicable procedural route. The Court established that the civil and commercial procedural framework is structured so that disputes are channeled through the procedural routes established according to the nature of the claims. It cited Article 1039 of the Commercial Code, which expressly provides that all actions arising from application of the Code shall be litigated through summary proceedings, unless the parties have agreed to arbitration.
The Court determined that a claim for extinctive prescription of dividend payment obligations between commercial entities is eminently commercial in nature, given that the claim derived from the commercial legal relationship between the parties as regulated by the Commercial Code, including provisions on distribution of profits (Article 172, paragraph 2) and the responsibilities of corporate administrators.
On the articles of incorporation. The Court verified that Clause Twenty-Fifth of Public Deed Fifty-Six, dated June 15, 1983, authorized by Notary Arturo Larraondo Samayoa, contained a submission pact providing that disputes between the company and its shareholders would be resolved through summary proceedings. This contractual provision was consistent with Article 1039 of the Commercial Code.
On the principle of specialty. The Court rejected the argument based on an alleged violation of the principle of specialty. Article 1039 of the Commercial Code is the applicable rule for determining the proper procedural route, regardless of whether the substantive prescription rules originate in the Civil Code. Article 96 of the Civil and Commercial Procedure Code, which establishes ordinary proceedings as a residual route, applies only when a dispute has no designated procedural route, which was not the case here.
On compliance with formal requirements. The Court noted that the complaint's formal requirements were initially reviewed without considering the adequacy of the procedural route, so once the improper route was identified, rejection was proper.
On the order of filing procedural remedies. Regarding the argument that Lisa filed a declinatory exception before the revocation motion, the Court cited Article 118 of the Judiciary Act, which provides that the main proceeding cannot continue while a competency challenge remains unresolved. This prevented the judge from addressing the revocation motion first while a declinatory incident remained pending.
On the Public Ministry's opinion. The Office of the Prosecutor for Constitutional Matters stated that the trial judge provided both factual and legal grounds for her decision based on Article 1039 of the Commercial Code, determining that summary proceedings were proper. The Prosecutor requested confirmation of the appealed ruling.