Order

The Eleventh Circuit Civil Court of Guatemala, in an order dated May 10, 2022, ruled on five preliminary exceptions filed by Lisa, S.A. against the damages claim brought by Sistemas y Equipos, S.A. in Expediente 01161-2012-00206 (consolidated with Expediente 01162-2012-00231). The court upheld the exception for failure to satisfy a condition precedent, finding that Lisa's exclusion as a shareholder is not final while the summary opposition proceeding remains pending, and ordered the case archived.

Case Background

Sistemas y Equipos, S.A., a member of the Avícola Villalobos Group, filed a summary damages claim against Lisa, S.A. The claim was grounded in Article 228 of Guatemala's Commercial Code, which provides that an excluded shareholder shall be liable to the company for damages caused by the acts that motivated the exclusion. Sistemas y Equipos alleged that Lisa's exclusion, resolved at the Annual Ordinary General Meeting of Shareholders on April 5, 2011, was based on a series of purportedly wrongful acts, including the procurement of a sworn statement abroad, the filing of unfounded lawsuits in multiple jurisdictions, and a media discredit campaign.

Lisa, S.A. had previously filed a summary opposition to the exclusion before the Tenth Circuit Civil Court (Expediente 01042-2011-00105), which remained pending at the time of this ruling. Within that proceeding, Lisa requested a precautionary measure to provisionally suspend the legal effects of the exclusion resolution, which was denied on June 7, 2011, and upheld on appeal on June 21, 2011.

Lisa's Preliminary Exceptions

Lisa, S.A. filed five preliminary exceptions through its special judicial representative:

Lack of jurisdiction. Lisa argued that the claimed damages originated abroad, since the sworn statement was executed in Miami, United States, and the lawsuits that allegedly caused damages were filed before foreign courts. Under Article 16 of the Civil and Commercial Procedure Code, jurisdiction in damages actions lies with the court of the place where the damages were caused, which Lisa contended was outside Guatemala.

Failure to satisfy a condition precedent. Lisa argued that its exclusion as a shareholder was not final because it was being challenged through a summary opposition proceeding. Since Article 228 of the Commercial Code presupposes the status of excluded shareholder to claim damages, the lawsuit was premature.

Defective complaint. Lisa argued that the complaint failed to attach essential documents required by Articles 107 and 109 of the Civil and Commercial Procedure Code, including the sworn statement that forms the basis of the claim, without identifying its author, date, or place of execution.

Lack of standing of the defendant. Lisa argued that the sworn statement allegedly giving rise to the damages was not made by Lisa, and therefore the action should have been directed against the person who made the statement.

Prescription and lapse. Lisa invoked Article 1673 of the Civil Code (one-year statute of limitations for damages actions) and Article 230 of the Commercial Code (three-month lapse period to exercise the exclusion right). Lisa argued that Sistemas y Equipos had known of the acts motivating the exclusion for more than ten years before the exclusion resolution, rendering both the damages action time-barred and the exclusion right lapsed.

Defense of Sistemas y Equipos, S.A.

Sistemas y Equipos responded generally that all exceptions should be denied.

Court's Analysis

Lack of jurisdiction. The court denied the exception. It relied on Article 16 of the Civil and Commercial Procedure Code and the notarial deed of April 25, 2011, containing the exclusion resolution, which described acts allegedly occurring in Guatemala. The court also cited rulings by U.S. courts (the Eleventh Circuit Court in Miami-Dade County, May 17, 2007, and the U.S. District Court for the Southern District of Florida, June 11, 2007) holding that Guatemalan courts have jurisdiction over disputes between the parties.

Failure to satisfy a condition precedent. The court upheld this exception. It reasoned that Article 228 of the Commercial Code establishes that only an excluded shareholder bears liability for damages, making a final exclusion a sine qua non requirement. Because Lisa had filed an opposition to the exclusion before the Tenth Circuit Civil Court (admitted on June 7, 2011) and that proceeding remained pending, the condition to exercise the right to claim damages had not been fulfilled. The court concluded that the prescription period for the damages action begins to run only when the opposition judgment becomes final, pursuant to the second paragraph of Article 1513 of the Civil Code.

"Es requisito sine qua non que su exclusión se encuentre firme por ser esta el presupuesto necesario para que sea viable analizar en que consisten los daños y perjuicios, si éstos se produjeron y su cuantificación." (Page 23)

Defective complaint. The court denied the exception. It found that the complaint complied with the requirements of Articles 61, 106, and 107 of the Civil and Commercial Procedure Code, and that the evaluation of accompanying documents is a matter for the merits, not the preliminary exceptions stage.

Lack of standing of the defendant. The court denied the exception. It reasoned that under Article 228 of the Commercial Code, it is the excluded shareholder who is liable to the company, and Lisa was the excluded shareholder. The grounds for exclusion were not limited to the sworn statement but encompassed multiple acts enumerated in the complaint.

Prescription and lapse. The court denied both exceptions. On prescription, it reasoned that Article 1673 of the Civil Code does not apply because the excluded shareholder's liability under Article 228 of the Commercial Code presupposes a final exclusion, and the prescription period runs from the date of a final judgment under Article 1513 of the Civil Code. On lapse, the court found that Article 230 of the Commercial Code concerns the right to adopt the exclusion resolution, a matter for the summary opposition proceeding rather than this damages action.

Ruling

• The preliminary exceptions of lack of jurisdiction, defective complaint, lack of standing of the defendant, prescription, and lapse filed by Lisa, S.A. were denied
• The preliminary exception for failure to satisfy a condition precedent was upheld
• Upon the ruling becoming final, any precautionary measures decreed are to be lifted, with the corresponding orders to be issued
• Costs were imposed on the losing party
• The case was ordered archived

Legal Basis

• Article 228 of the Commercial Code of Guatemala — Provides that the excluded shareholder is liable to the company for damages caused by the acts that motivated the exclusion; the central premise of the court's ruling
• Article 1513 of the Civil Code — Provides that prescription runs from the date of a final condemning judgment or from the date the damage was caused; applied by the court to conclude that the prescription period has not commenced
• Article 230 of the Commercial Code — Establishes a three-month lapse period to exercise exclusion rights; the court held this pertains to the opposition proceeding, not this damages action
• Article 16 of the Civil and Commercial Procedure Code — Assigns jurisdiction to the court where the damages were caused; basis for denying the jurisdiction exception
• Articles 61, 106, and 107 of the Civil and Commercial Procedure Code — Formal requirements for complaints; basis for denying the defective complaint exception
• Article 116 of the Civil and Commercial Procedure Code — Enumeration of admissible preliminary exceptions
• Article 1673 of the Civil Code — One-year prescription for damages actions; invoked by Lisa but held inapplicable

Signatories

• No individual signatories are identified in the document. The order was issued by the Eleventh Circuit Civil Court of Guatemala (Juzgado Décimo Primero de Primera Instancia del Ramo Civil del Departamento de Guatemala)

Subsequent Proceedings

Nearly two years after this ruling, the court admitted BDT Investments Inc. as a third-party intervenor (tercera coadyuvante) of the defendant through an order dated March 21, 2024, recognizing BDT's own and certain interest in the proceeding based on a transaction agreement between the parties.