Court of Appeals confirms dismissal of La Perla's dividend prescription claim against Lisa
May 6 2024
Court of Appeals
The First Chamber of the Civil and Commercial Court of Appeals confirmed the dismissal of the extinctive prescription lawsuit filed by Administradora de Restaurantes, S.A. (successor by merger of Compañía Importadora La Perla, S.A.) against Lisa, S.A. The lawsuit sought to extinguish Lisa's right to collect dividends decreed at the annual general shareholders' meeting held on May 22, 2013, which approved distribution of profits for the fiscal year January through December 2012 as well as accumulated retained earnings. The court found that the plaintiff failed to comply with the formal requirements of the Civil Procedure Code by omitting the foundational documents for its claim, confirming in full the first-instance ruling of August 4, 2023. This outcome protected Lisa's shareholder rights against an attempt to extinguish its dividends through prescription.
Compañía Importadora La Perla, S.A. filed an ordinary lawsuit for extinctive, negative, or liberating prescription against Lisa, S.A. before the Eleventh Multi-Judge First Instance Civil Court of Guatemala City. The complaint was admitted on November 19, 2018. La Perla was subsequently absorbed by Administradora de Restaurantes, S.A., which continued the proceedings as its successor.
Lisa appeared on January 29, 2019, raising five preliminary defenses: lack of jurisdiction, defective complaint, lack of standing in the plaintiff, failure to comply with a condition to which the asserted right is subject, and failure to comply with the term to which the asserted right is subject. The defenses were admitted for resolution on March 1, 2019, and the evidentiary period was opened on July 16, 2019.
In the ruling of August 4, 2023, the trial judge denied the defenses of lack of jurisdiction, lack of standing, failure to comply with a condition, and failure to comply with a term, but upheld the defective complaint defense, rejecting the lawsuit for filing. Over four years elapsed from the opening of the evidentiary period to the resolution of the preliminary defenses.
Administradora de Restaurantes raised a single grievance: that the trial judge erroneously interpreted article 107 of the Civil Procedure Code by requiring presentation of the full shareholders' meeting minutes as the foundational document. The appellant argued that the sole purpose of the lawsuit was to determine whether the five-year general prescription period had elapsed since the dividends were decreed, and that the other matters identified by the trial judge (quorum, individual dividend amounts, shareholder identities) were not contested facts. The appellant further contended that compulsory disclosure of shareholder identities and individual dividend amounts posed a security risk.
Lisa argued before the trial court that the plaintiff failed to comply with the formal requirements of the complaint by not attaching: the complete shareholders' meeting minutes (not merely a certification of a single agenda item), the notices published in the official gazette and a newspaper of general circulation, or proof that quorum existed pursuant to article 138 of the Commercial Code. Lisa also pointed out that the complaint lacked clarity regarding the amount of the obligation whose prescription was sought and regarding the time and manner in which the dividends were to have been paid. Lisa further invoked clause twenty-eight of La Perla's articles of incorporation, which stipulates that the agreed forum for resolving disputes is arbitration, not ordinary court proceedings.
The court examined the defective complaint defense under articles 61, 79, 106, and 107 of the Civil Procedure Code. The defense serves as a mechanism to correct procedural deficiencies before the answer stage, preventing nullities later in the proceedings.
The court agreed with the trial judge that the plaintiff was required to comply with all requirements of articles 106 and 107 when filing its complaint, including the obligation to attach the documents on which it bases its claim. The law provides an alternative: if a party does not have the documents at its disposal, it may identify them with sufficient particularity and designate the archive or public office where the originals may be found. The plaintiff failed to do either. The court concluded that no grievance was caused to the appellant and confirmed the ruling below.
"La parte actora al incoar su demanda, obligadamente debió cumplir con todos y cada uno de los requisitos regulados por los artículos 106 y 107 precitados; acompañando obligadamente los documentos en que fundaba su derecho y si no los tuviere a su disposición, la ley le otorga la oportunidad de mencionar e individualizarlos en lo posible, expresando lo que de ellos resulte y designar los archivos, oficina pública o lugar donde se encuentren los originales" (Page 10)
Administradora de Restaurantes sought clarification of this ruling, which was denied by the same court in the ruling of August 6, 2024. Administradora then filed a cassation appeal, which was rejected outright by the Civil Chamber of the Supreme Court of Justice in the ruling of March 17, 2025, leaving the dismissal of the lawsuit final and unappealable.