Court of Appeals denies clarification and extension challenging dismissal of dividend prescription claim
Aug 6 2024
Court of Appeals
The First Chamber of the Civil and Commercial Court of Appeals denied the clarification and extension remedies filed by Administradora de Restaurantes, S.A. (successor by merger of Compañía Importadora La Perla, S.A.) against the ruling of May 6, 2024, which had upheld the dismissal of the dividend prescription claim against Lisa, S.A. The ruling closes the appellate proceeding, confirming that the complaint was correctly rejected as defective for lacking essential documentation and clarity in the chosen procedural avenue.
Administradora de Restaurantes, S.A. filed an ordinary lawsuit seeking a declaration that Lisa, S.A.'s right to collect dividends decreed at the annual shareholders' meeting of La Perla held on May 28, 2013, had expired by prescription. The order of August 4, 2023, issued by the Eleventh Multi-Judge Civil Court of First Instance, sustained the preliminary defense of defective complaint and rejected the lawsuit. The Court of Appeals confirmed that decision in its ruling of May 6, 2024, denying the appeal.
Administradora then filed clarification and extension remedies against the appellate ruling, giving rise to this decision.
Administradora argued that the Court of Appeals should explain why it was necessary to prove the existence of a quorum, the assembly convocations, and the complete minutes, given that the lawsuit's purpose was not to challenge the assembly but to determine whether the five-year prescription period had elapsed. In its view, the certified excerpt of the relevant agenda item approving the distribution of profits was sufficient to support the claim.
Lisa, S.A. responded that both the trial court and the Court of Appeals had clearly established that the plaintiff was required to comply with the requirements of Articles 61, 79, 106, and 107 of the Civil and Commercial Procedural Code, and that a simple certified excerpt of one agenda item did not constitute sufficient title to prove the obligation whose prescription was sought.
Administradora requested that the court rule on a grievance it allegedly failed to address: the incompetence exception related to the arbitration clause in La Perla's articles of incorporation. Administradora contended that if the proper avenue was arbitration, the court should have sustained the incompetence exception rather than the defective complaint exception, and that the first-instance ruling contained an internal contradiction by denying incompetence while sustaining the defective complaint based on the same arbitration clause.
Lisa countered that the contradiction was attributable to Administradora itself, which had argued on appeal that the arbitration clause was inapplicable because the prescription of dividends arises from the law, not from the corporate charter.
On clarification. The court determined that Administradora's arguments were a reiteration of the same contentions raised in its statement of grievances during the appeal. The court stated that its May 6, 2024 ruling was clear and precise in finding that the plaintiff failed to establish clearly the amount, timing, and form of dividend payment, and failed to attach documentation proving the assembly convocations and the existence of a quorum. Disagreement with a ruling does not constitute grounds for clarification under Article 596 of the Civil and Commercial Procedural Code.
On extension. The court characterized Administradora's argument as fallacious. Reviewing the grievances expressed on appeal, the court found that Administradora itself had argued that the arbitration clause was inapplicable to the case because the prescription of dividends derives from the law, not from the corporate charter. The court noted that counsel for Administradora contradicted her own arguments across different procedural stages. Invoking the principle of procedural congruence and Article 603 of the Civil and Commercial Procedural Code, which limits appellate review to matters expressly challenged and unfavorable to the appellant, the court concluded that the appellant could not seek a ruling on an exception that was plainly unfavorable to her own position. The lack of consistency in Administradora's requests was not attributable to the court, and no issue had been left unresolved.
Administradora de Restaurantes, S.A. filed a cassation appeal before the Supreme Court of Justice. In a ruling dated November 29, 2024, the Civil Chamber rejected the appeal outright, finding that the challenged ruling lacked objective appealability because it did not prevent renewal of the litigation under Article 620 of the Civil and Commercial Procedural Code.