Appeals court declines review for failure to state grievances, finalizing referral to arbitration in dividend prescription case
Aug 31 2023
Court of Appeals
The First Chamber of the Court of Appeals, Civil and Commercial Division, refused to hear the appeal filed by Administradora de Restaurantes, S.A. (successor by merger of Distribuidora Avícola del Norte, S.A.) against the February 6, 2023 order issued by the Eleventh Civil Court of First Instance. The challenged order had sustained Lisa, S.A.'s preliminary exception of incompetence, referring the dividend prescription dispute to arbitration under the arbitration clause in the corporate bylaws. The Court of Appeals found that the appellant failed to state its grievances within the allotted period, and the first-instance ruling acquired full finality.
Administradora de Restaurantes, S.A., as successor by merger of Distribuidora Avícola del Norte, S.A., brought an ordinary civil action against Lisa, S.A. seeking a declaration that Lisa's right to collect dividends had prescribed. Lisa raised multiple preliminary exceptions, including incompetence, defective complaint, lack of standing, failure of condition, and expiration of the applicable term. In the February 6, 2023 order, the Eleventh Civil Court of First Instance sustained the incompetence exception, ruling that the dispute was subject to arbitration under the plaintiff entity's corporate bylaws. Administradora de Restaurantes, S.A., through its general judicial and administrative agent, attorney Elmar Baldemar Ambrocio Mazariegos, filed an appeal against that order.
The Court of Appeals established that the right of appeal, as an expression of the right to effective judicial protection recognized under Article 29 of the Constitution, allows a superior court (ad quem) to review the lower court's (a quo) decision. However, Article 603 of the Code of Civil and Commercial Procedure limits the appellate court's review to matters that the appellant has expressly challenged and that are unfavorable to the appellant.
The Court noted that upon receiving the appeal, it granted the appellant a three-day hearing to state, clearly and specifically, the grievances caused by the challenged order. The appellant did not respond within that period. The failure to state grievances made it impossible for the Court to review the challenge, as its jurisdiction is limited to ruling on matters expressly raised by the appellant.
The Court cited binding precedent from the Constitutional Court, particularly the February 22, 2013 judgment in case file 5068-2012, which holds that when the appellate procedure provides only for a hearing on review (vista), the appeal must be filed with a statement of grievances, and the failure to state them at the proper procedural moment precludes the appellate court from ruling. The Constitutional Court reaffirmed this standard in subsequent decisions (case files 186-2013 and 725-2013).
This case is part of the pattern of actions brought by Avícola Villalobos Group entities seeking to extinguish Lisa, S.A.'s dividend rights. Distribuidora Avícola del Norte, S.A. (later absorbed by Administradora de Restaurantes, S.A.) sued to have Lisa's right to collect dividends declared prescribed. The appellant's failure to state grievances before the Court of Appeals, despite having filed the appeal, resulted in the first-instance order referring the case to arbitration becoming final. The incompetence of the ordinary courts, upheld on the basis of the arbitration clause in the corporate bylaws invoked by Lisa, closed this avenue of attack on Lisa's dividend rights in Guatemalan civil jurisdiction.