The First Superior Tribunal reverses Order No. 665/2023 of the Fifth Circuit Civil Court, fully reinstating Lisa, S.A.'s summary accounting action against Villamorey, S.A.

Procedural Background

The Fifth Circuit Civil Court, which had assumed jurisdiction over the proceeding through Order 176 of February 2, 2023 after the recusal of the Fourth Court judge, issued Order No. 665/2023 on April 13, 2023 in its capacity as substitute tribunal. The special substitute judge determined that Lisa had not proven "with certainty" its shareholder status to satisfy the requirements of Article 1379 of the Judicial Code, reasoning that the plaintiff presented an authenticated copy of the share certificate rather than the original. The lower court acknowledged that this did not prevent Lisa from pursuing an accounting action altogether, but held that it should proceed through the ordinary summary track rather than the special procedure under Articles 1379 et seq.

Lisa, S.A.'s Arguments on Appeal

Lisa's counsel, Licenciada María Luisa Villarreal Palacios, supported the appeal on the grounds that Lisa's 33.33% shareholder status was fully established through two judicially authenticated documents: the authenticated copy from the Eleventh Circuit Civil Court of Villamorey's Share Registry Book, and the authenticated copy from the Twelfth Circuit Civil Court of Share Certificate No. 1 issued by Villamorey to Juan Arturo Gutiérrez, with its corresponding endorsement to Lisa. The appellant emphasized that at no point during the proceedings did Villamorey deny Lisa's shareholder status, which stripped the challenged order of any legal basis.

Tribunal's Analysis

The First Superior Tribunal adopted a broader framework than the lower court, situating the dispute not only within the procedural rules of the Judicial Code but within substantive corporate law. The Tribunal invoked Article 270 of the Commercial Code, which provides that no company may deny its partners the right to investigate corporate affairs, examine the books, correspondence, and all documents relating to administration, with any stipulation to the contrary being void.

"En ninguna sociedad podrá negarse a los socios el derecho de investigar el curso de los negocios sociales, de examinar los libros, correspondencia y demás documentos referentes a la administración. Toda estipulación en contrario será nula." (Page 5)

The Tribunal characterized Lisa's claim as a challenge to the administrative management of corporate affairs. It recognized that administration is vested in the Board of Directors under Article 49 of Law 32 of 1927, and that Article 425 of the Commercial Code establishes the mechanism for the General Shareholders' Assembly to appoint auditors to examine the balance sheet or corporate management. In the absence of such appointment, shareholders may judicially compel an examination of corporate management as the starting point for an accounting.

Ruling

• Reversed Order No. 665/2023 of April 13, 2023, issued by the Fifth Circuit Civil Court of the First Judicial Circuit of Panama, within the summary accounting proceeding (Exp. 14606-21) filed by Lisa, S.A. against Villamorey, S.A.
• The reversal leaves in force Order 283, the order of February 25, 2021 by which the Fourth Circuit Civil Court had directed Villamorey to render accounts.

Legal Basis

• Article 270 of the Commercial Code — Guarantees partners the inalienable right to investigate corporate affairs and examine the books and administrative documents
• Article 425 of the Commercial Code — Establishes the mechanism for the General Shareholders' Assembly to appoint auditors for examination of the balance sheet or corporate management
• Article 49 of Law 32 of 1927 — Vests the Board of Directors with responsibility for administration of corporate affairs
• Article 1151 of the Judicial Code — Formalities governing appeals
• Articles 1379 et seq. of the Judicial Code — Procedural rules applicable to accounting actions

Signatories

• Janeth Torres, Magistrate (Reporting Judge)
• Carlos I. Pizarro H., Magistrate
• Jorge Luis García García, Special Substitute Magistrate