Order: Court dismissed dividend case by Industria del Sur

On February 12, 2024, the Tenth Civil Court of First Instance dismissed a lawsuit filed by Industria Avícola del Sur, S.A. that sought to extinguish its obligation to pay dividends owed to Lisa, S.A. The plaintiff argued that dividends declared between 2001 and 2011 had expired due to Lisa’s inaction and the five-year statutory prescription period. However, the court ruled that Guatemalan commercial law does not recognize a time limit for asserting shareholder dividend rights, and that applying civil law by analogy would contradict the principles of corporate equity and good faith.

The court also found multiple substantive defects in the lawsuit. It rejected procedural objections raised by Lisa, including lack of clarity, lack of mandate authorization, and failure to meet conditions precedent, but ultimately concluded that Industria Avícola del Sur lacked legal standing to bring the claim. The ruling emphasized that a company cannot use prescription to invalidate shareholder rights when it never paid or consigned the dividends, especially after recognizing Lisa’s rights during exclusion proceedings. The court denied all claims and declined to impose costs, citing the complexity of the case.