Feb 12 2024
10th Civil Court
Industria Avícola del Sur, S.A. filed an ordinary civil lawsuit against Lisa, S.A., a shareholder of the company, seeking a declaration that the obligation to pay dividends decreed at annual ordinary general shareholder assemblies held on October 3, 2001, November 8, 2006, August 25, 2008, December 17, 2009, May 6, 2010, and April 5, 2011, had been extinguished by prescription. Each assembly approved the distribution of profits from the corresponding fiscal year, as well as accumulated profits, to be distributed as dividends.
Lisa, S.A. answered the complaint in the negative and filed three peremptory exceptions: failure to meet legal requirements for the claim, lack of legal authority to file the lawsuit, and failure to satisfy the conditions to which the asserted right is subject. Lisa, S.A. argued that the dividends were subject to embargo orders obtained by the plaintiff itself and by other Avícola Villalobos Group entities, which prevented both collection and the running of any prescription period.
Industria Avícola del Sur, S.A. argued that the dividend payment obligation arose from the distribution resolutions adopted by the assemblies, that the funds were available to shareholders the day after each assembly, and that Lisa, S.A. never appeared to demand payment. It relied on Articles 1319, 1501, and 1508 of the Civil Code, asserting that in the absence of a special provision governing prescription of dividends, the general five-year period applied from the date each obligation became enforceable.
On the perfection of the obligation. Lisa, S.A. argued that the obligation had not been perfected by the assembly resolution alone. Clause sixteen of the articles of incorporation of Industria Avícola del Sur, S.A. assigns to the Board of Directors (Consejo de Administración) the duty to determine the date and form of payment of approved dividends. The plaintiff neither proved nor argued that the Board had fulfilled this prerequisite, leaving the obligation indeterminate and unenforceable.
On the embargoes preventing prescription. Lisa, S.A. demonstrated that the plaintiff itself had obtained precautionary embargo measures (Expediente 01044-2011-613) on Lisa's dividends and shares in Industria Avícola del Sur, S.A., decreed on January 6, 2012, and maintained through bond renewals. The General Manager of Industria Avícola del Sur, S.A. was appointed judicial depositary of the embargoed assets. Lisa, S.A. characterized the prescription action as a manifest fraud of law, given that the plaintiff was seeking to extinguish an obligation over assets it had itself placed under judicial seizure.
On interruption of prescription. Lisa, S.A. established that multiple Avícola Villalobos Group entities maintained active embargoes on its dividends across several courts, including proceedings <law id="gua-01163-2012-00178" />, <law id="gua-01045-2012-00210" />, <law id="gua-01045-2012-00242" />, and <law id="gua-01044-2012-00279" />, among others. Lisa, S.A. invoked Article 1506 of the Civil Code, which provides that prescription is interrupted by a duly notified judicial demand or any executed precautionary measure.
On the exclusion and recognition of the obligation. Lisa, S.A. noted that on April 5, 2011, the plaintiff adopted a resolution excluding Lisa, S.A. as a shareholder and instructing the administration to liquidate Lisa's share, which constituted an express recognition of the obligation the plaintiff now sought to extinguish by prescription. Article 233 of the Commercial Code permits the company to retain the excluded partner's profits for a maximum of three years, a period that elapsed without liquidation.
The court focused on whether extinctive prescription of dividend payments is cognizable under Guatemalan commercial law.
On the peremptory exceptions. The court denied all three of Lisa's exceptions. The exception for failure to meet legal requirements restated arguments already resolved as a preliminary exception for defective complaint on October 25, 2017, and the court verified that the complaint met Articles 61, 106, 107, and 109 of the Civil Procedure Code. The exception for lack of legal authority failed because the general judicial and administrative mandate granted to the plaintiff's attorney met the requirements of Articles 188 and 189 of the Judiciary Act, and Lisa, S.A. offered no evidence to the contrary. The exception regarding conditions had likewise been addressed in the preliminary phase.
On the improcedence of dividend prescription. The court conducted a substantive analysis of the applicable commercial framework. Under Article 669 of the Commercial Code, commercial obligations are to be interpreted and performed according to the principles of verdad sabida y buena fe guardada. Article 105(1) confers on every shareholder the right to participate in the distribution of profits. The court determined that:
On the evidence. In her testimony (declaración de parte), the legal representative of Industria Avícola del Sur, S.A. admitted that the articles of incorporation do not contemplate prescription of dividends and that no specific provision in the Commercial Code governs it. The accounting certification dated February 2, 2017, records an account payable in favor of Lisa, S.A. derived from the dividend distribution resolutions, which the court treated as recognition of the outstanding obligation. The plaintiff's representative also admitted that Lisa, S.A. never appeared to collect dividends, but the court did not consider this fact dispositive given the substantive improcedence of the prescription claim.
The court established that Lisa, S.A. was excluded as a shareholder on April 5, 2011, and notified on May 3, 2011. Under Article 233 of the Commercial Code, the company could retain the excluded partner's profits for a maximum of three years, and no evidence showed that liquidation or payment had been made.
Industria Avícola del Sur, S.A. appealed this judgment. Lisa, S.A. filed its brief dated June 30, 2025 (<doc id="gua-01042-2017-00059-2025-06-30-a" />) before the Third Civil and Commercial Court of Appeals, requesting that the appeal be denied, the first-instance ruling confirmed, and costs imposed on the appellant. The appeal remains pending resolution.