Court of Appeals dismisses appeal, upholds arbitration referral of dividend prescription claim against Lisa
Mar 1 2021
Court of Appeals
The First Civil and Commercial Court of Appeals upheld the referral to arbitration of the extinctive prescription action filed by Compañía Importadora La Perla, S.A. against Lisa, S.A. La Perla had sued to obtain a judicial declaration that Lisa's right to collect dividends had been extinguished by prescription. Lisa raised a preliminary objection of lack of jurisdiction based on the arbitration clause in La Perla's articles of incorporation, and the January 20, 2020 order of the Eleventh First Instance Civil Court sustained that objection. La Perla appealed. The Court of Appeals dismissed the appeal, confirmed the first-instance ruling, and condemned La Perla to pay costs.
Compañía Importadora La Perla, S.A. filed an ordinary civil action against Lisa, S.A. seeking a declaration of extinctive, negative, or liberatory prescription of Lisa's right to the distribution of profits decreed by the Ordinary General Shareholders' Assembly. La Perla alleged that Lisa had failed to appear to demand payment of the dividends within the five-year statutory period and that the right had therefore been extinguished by operation of law.
Lisa, S.A. filed preliminary exceptions of lack of jurisdiction, defective complaint, lack of standing in the plaintiff, failure to satisfy the condition to which the asserted right is subject, and failure to satisfy the term to which the asserted right is subject. The first-instance judge sustained the jurisdictional objection in the January 20, 2020 order and declined to rule on the remaining exceptions, directing the parties to proceed through arbitration.
La Perla's claim represents a direct attempt to judicially extinguish the obligation to pay dividends to Lisa. In the broader context of the litigation, this action seeks to eliminate through prescription a right that the Avícola Group itself has prevented Lisa from exercising through embargoes and other procedural maneuvers in related proceedings.
La Perla argued that the first-instance judge misinterpreted clause twenty-eight of the articles of incorporation. According to the appellant, the clause submits to arbitration controversies arising "by reason of this contract, its interpretation, adjudication, resolution, or nullity," but the prescription of the right to collect dividends does not originate in the corporate contract, rather operating by virtue of law. La Perla maintained that the controversy is legal in nature, not contractual, and that ordinary courts therefore have jurisdiction.
The Court examined public deed number 71, executed on April 16, 2001 before notary Carolina Paniagua Corzantes, which contains the incorporation of Compañía Importadora La Perla, S.A. Clause twenty-five of that instrument provides that the distribution of profits or dividends is within the authority of the Annual Ordinary General Assembly. Clause twenty-eight states:
"Cualquier controversia que se suscite entre las partes con motivo de este contrato, su interpretación, adjudicación, resolución o nulidad que no sea resuelta de mutuo acuerdo, lo será mediante arbitraje de derecho, conforme el procedimiento establecido en la Ley de Arbitraje, Decreto sesenta y siete guion noventa y cinco del Congreso de la República, renunciando al fuero de su domicilio, y sometiéndose a la jurisdicción territorial de Guatemala." (Page 8)
The Court held that the dispute between La Perla and Lisa over the prescription of dividend rights is a conflict that arose between the parties to the corporate charter by reason of that contract. Lisa's right to dividends originates in its status as a shareholder in La Perla, governed by the articles of incorporation, and the prescription of that right is a controversy derived from the same instrument. The Court concluded that the matter falls within the jurisdiction of an arbitral tribunal as expressly agreed by the parties, applying the principle of pacta sunt servanda.
The Court also confirmed the application of Article 11(1) of Decree 67-95 (Arbitration Act), which provides that an arbitration agreement bars courts from hearing actions subject to arbitration when the interested party invokes the objection of lack of jurisdiction, which Lisa timely did.