Grants Lisa's defective claim exception, rejects ordinary dividend prescription lawsuit
Jan 20 2020
11th Civil Court
The Eleventh First Instance Civil Court of the Department of Guatemala resolved, on January 20, 2020, five preliminary exceptions filed by Lisa, S.A. in the ordinary lawsuit for extinctive prescription brought against it by San José El Recuerdo, S.A. The court granted the defective claim exception upon concluding that the plaintiff's articles of incorporation require disputes between the company and its shareholders to be resolved through summary proceedings, and rejected the ordinary lawsuit. The remaining exceptions for lack of jurisdiction, lack of standing, failure of condition, and failure of term were denied. The ruling constitutes a procedural victory for Lisa: the attempt to extinguish Lisa's dividend rights through prescription was expelled from the ordinary track without reaching the evidentiary stage or a decision on the merits.
San José El Recuerdo, S.A., a Guatemalan company within the Avícola Villalobos Group, filed an ordinary lawsuit against Lisa, S.A. (a corporation organized under the laws of Panama) seeking a declaration that the obligation to pay dividends decreed at the annual general shareholders' assemblies in Lisa's favor had prescribed. The lawsuit was admitted by the Eleventh First Instance Civil Court of the Department of Guatemala under case number 01161-2017-00201. Lisa appeared through its special judicial attorney-in-fact, Tito Enoc Marroquín Cabrera, later substituted by Carmen Ileana Peralta Marroquín.
Lisa filed five preliminary exceptions: lack of jurisdiction, defective claim, lack of standing of the plaintiff, failure of the condition to which the right asserted is subject, and failure of the term to which the right asserted is subject.
Lack of jurisdiction. Lisa argued that, as an entity organized under Panamanian law with its seat outside Guatemala, and the action being a personal one, the competent court should be a first instance court in Panama. It invoked the principle that courts must examine jurisdictional competence ex officio.
Defective claim. Lisa identified multiple defects in the complaint: the plaintiff failed to specify the amount of the obligation whose prescription it sought, omitted the date and form of payment of dividends as required by clause sixteen of the articles of incorporation (which assigns to the board of directors the determination of payment date and form), failed to attach the articles of incorporation as an essential supporting document despite invoking it, and filed the lawsuit through ordinary proceedings when clause twenty-five of the articles of incorporation and Article 1039 of the Commercial Code require summary proceedings for disputes between the company and its shareholders. Lisa argued that the order admitting the lawsuit in ordinary proceedings was null and void for violating mandatory legal provisions.
Lack of standing. Lisa argued that San José El Recuerdo's general judicial attorney lacked authority to pursue an action for extinctive prescription of a shareholder's dividends, as such a decision exceeded the board of directors' powers and required prior authorization from the general shareholders' assembly, the company's supreme governing body. It invoked Articles 132, 137, and 155 of the Commercial Code, arguing that suppressing a shareholder's right to collect dividends requires the affected shareholder's consent.
Failure of condition. Lisa argued that San José El Recuerdo failed to comply with its obligation under the Asset Forfeiture Law to convert bearer shares to registered shares, did not deliver Lisa's corresponding shares, and did not file the required notice with the Commercial Registry. Without these conditions being met, the prescription period had not begun to run. Additionally, Lisa invoked the requirement of prior shareholders' assembly approval with the affected shareholder's consent to suppress dividend rights.
Failure of term. Lisa argued that prescription was interrupted on two grounds. First, San José El Recuerdo itself expressly recognized Lisa's rights in 2011 when it communicated the shareholder exclusion resolution, stating that Lisa would be paid its corresponding share under applicable law, without alleging any prescription, which triggers the interruption provision of Article 1506(2) of the Civil Code. Second, the plaintiff filed an ordinary lawsuit for damages (case 01048-2012-00221 before the Seventh First Instance Civil Court) in which it requested a precautionary attachment on Lisa's dividends, profits, and shares in San José El Recuerdo and Villamorey, S.A., thereby recognizing Lisa's rights. Lisa also denounced that multiple Avícola Group entities had obtained active attachment orders on Lisa's dividends across all group entities, making payment impossible, and that the prescription action constituted fraude de ley (fraud upon the law), an attempt to appropriate dividends whose collection the group itself had blocked.
San José El Recuerdo argued that Guatemalan courts have jurisdiction because the dividend payment obligation arises from legal acts performed in Guatemala, that the complaint meets formal requirements because the amount is irrelevant to a prescription action, that the attorney-in-fact has sufficient powers under the Judiciary Law, that share conversion does not condition dividend payment, and that no valid ground for interruption of prescription exists because Lisa never judicially demanded payment of its dividends nor filed precautionary measures in its capacity as creditor.
Lack of jurisdiction. The court denied this exception. It acknowledged that Lisa is a Panamanian entity but determined that Guatemalan courts have jurisdiction under Articles 33 and 34 of the Judiciary Law, because the dividends originated from profit distribution resolutions adopted by the general assembly of San José El Recuerdo, which was incorporated under Guatemalan law and has its seat in Guatemala. The court cited Constitutional Court precedent (cases 1161-2004, 3754-2010, and 432-2012).
Defective claim. The court granted this exception. It analyzed clause twenty-five of San José El Recuerdo's articles of incorporation (public deed number 44, dated June 15, 1983, authorized by notary Norman Henry Moklebust Chua), which provides that disputes between the company and shareholders arising from corporate activities must be resolved through summary proceedings before ordinary courts. Applying the principle of pacta sunt servanda under Article 1519 of the Civil Code, the court concluded that the conflict arises as a consequence of corporate activities (the obligation to pay dividends to a shareholder) and that the proper procedural track was summary proceedings, not ordinary proceedings. It cited Constitutional Court precedent (cases 4793-2013 and 1675-2014). Consequently, it rejected the ordinary lawsuit.
"Se determina que conforme a lo convenido en la escritura constitutiva de la sociedad demandante las disputas que surjan entre la sociedad y los accionistas por las actividades sociales deben dirimirse en juicio sumario, de conformidad con el principio de pacta sunt servanda" (Page 30)
Lack of standing. The court denied this exception. It verified that the general judicial power of attorney granted to attorney Alberto Antonio Morales Velasco was registered with the Archive of Protocols and meets the requirements of Article 45 of the Civil and Commercial Procedural Code. Applying Article 190 of the Judiciary Law, it concluded that judicial attorneys have sufficient authority to perform all procedural acts without prior authorization from the board of directors.
Failure of condition. The court denied this exception, determining that Lisa's arguments regarding share conversion and the requirement of prior shareholders' assembly approval are substantive matters to be analyzed at the merits stage, not through a preliminary exception whose purpose is to purge procedural defects.
Failure of term. The court denied this exception for the same reasons: the arguments regarding interruption of prescription arising from the summary opposition proceeding, the ordinary damages lawsuit, and the precautionary attachments on Lisa's shares and dividends are substantive matters to be resolved in the final judgment.
Costs. No costs were imposed on either party, as the matters involved doubtful questions of law under Article 576 of the Civil and Commercial Procedural Code.