Avícola Las Margaritas Dividend Prescription Claim Dismissed on Jurisdiction Exception

I. First Instance and Appeal

Appeal Ruling

Avícola Las Margaritas, S.A. filed an ordinary proceeding against Lisa, S.A. seeking a declaration of extinctive, negative, or liberatory prescription of the obligation to pay dividends owed to Lisa, a 25% equity holder. Lisa, S.A., a Panamanian entity, appeared through a special judicial representative and filed a jurisdiction challenge (declinatoria de competencia), which was rejected on April 8, 2019, followed by five preliminary exceptions: lack of jurisdiction, defective complaint, lack of standing of the plaintiff, failure to comply with a condition precedent, and failure to comply with a time requirement.

The Eleventh First-Instance Civil Court, by order of August 25, 2022, denied four exceptions and sustained the defective complaint exception. The court found that Avícola Las Margaritas' articles of incorporation (public deed number 24, executed on February 22, 1993) require shareholder disputes to be resolved in summary proceedings, and that Article 1039 of the Commercial Code confirms that procedural track. The complaint, filed as an ordinary proceeding, lacked congruence between the factual allegations and the legal basis.

The First Civil and Commercial Court of Appeals, in its ruling of June 21, 2023, declared the appeal without merit. The Court identified two independent bases requiring summary proceedings: the company's own articles of incorporation and Article 1039 of the Commercial Code, read together with Article 229, paragraph six, of the Civil and Commercial Procedure Code. The Court affirmed the appealed order and ordered Avícola Las Margaritas to pay appellate costs.

Embargoes and abuse of process

Lisa, S.A. invoked at first instance the existence of precautionary embargoes decreed on its shares and dividends in Avícola Las Margaritas across multiple proceedings brought against it, as grounds for interruption of the prescriptive period. The trial court did not resolve this point, deeming it a matter of substance, and the Court of Appeals did not address it in confirming the procedural rejection.

The context is significant: the same entity that obtained embargoes on Lisa, S.A.'s dividends and shares, preventing their collection, simultaneously filed this extinctive prescription action seeking to declare those same dividend obligations time-barred. This pattern of conduct, embargoing dividends to prevent collection and then arguing prescription for failure to collect, is consistent with the weaponization of the legal system to extinguish Lisa's shareholder rights. The Court also noted the existence of a summary proceeding challenging Lisa, S.A.'s exclusion as shareholder and an ordinary damages suit filed by Avícola Las Margaritas, placing this prescription action within a coordinated set of legal proceedings against Lisa, S.A.

The definitive rejection of this complaint prevents Avícola Las Margaritas from extinguishing by prescription the dividends owed to Lisa, S.A. through the ordinary procedural track.