Appeal Ruling: Avícola Las Margaritas complaint rejected as defective

On June 21, 2023, Guatemala’s First Civil and Commercial Court of Appeals rejected the appeal filed by Avícola Las Margaritas, S.A. and confirmed in full the ruling issued on August 25, 2022 by the Eleventh Civil Court of First Instance. The lower court had upheld Lisa, S.A.’s preliminary objection of defective complaint, dismissing the ordinary lawsuit in which Avícola sought to declare the obligation to pay dividends extinguished. Other exceptions raised by Lisa, S.A. were denied, but the court concluded the lawsuit had been filed incorrectly.

The Appeals Chamber emphasized that disputes over the prescription of dividend obligations are mercantile in nature and must proceed through summary proceedings, not an ordinary lawsuit, as provided under Guatemalan procedural law and the company’s own articles of incorporation. The appellate judges ruled that Avícola Las Margaritas’ filing did not meet the requirements of law and therefore its claim could not proceed. The ruling also condemned Avícola Las Margaritas, S.A. to pay the legal costs incurred at the appellate stage.