Inversiones Empresariales 2012 Dividend Prescription Action Against Lisa Defeated

I. Ordinary Proceedings and Preliminary Objections

Order

Inversiones Empresariales, S.A. filed an ordinary action against Lisa, S.A., holder of twenty-five percent of the company's issued shares, seeking a judicial declaration that Lisa's right to collect dividends decreed at the annual ordinary general shareholders' assembly of May 2, 2012, covering accumulated profits from the fiscal year January 1 to December 31, 2011, had been extinguished by prescription. The complaint did not specify the amount of the obligation it sought to declare prescribed. Inversiones Empresariales argued that the five-year statutory period under Article 1508 of the Civil Code had elapsed without Lisa exercising collection.

Lisa, S.A. filed five preliminary objections. The central defense was the defective-complaint objection: clause twenty-five of Inversiones Empresariales' own articles of incorporation provides that disputes between the company and its shareholders must be resolved through summary proceedings, not ordinary proceedings. Lisa also argued that Inversiones Empresariales lacked legal standing to bring the action, that the prescription period had not begun to run due to the company's failure to convert bearer shares to registered shares, and that prescription had been interrupted. On interruption, Lisa pointed out that Inversiones Empresariales itself had resolved in 2011 to exclude Lisa as a shareholder and instructed the administration to liquidate Lisa's corresponding share, expressly recognizing Lisa's rights without alleging prescription. Additionally, precautionary embargoes remained in force on Lisa's dividends, obtained by Inversiones Empresariales in the ordinary damages action, File 01041-2012-00224, and by other Avícola Group entities. Lisa characterized this as fraud on the law: the same entities that embargoed the dividends now sought to declare Lisa's right to collect them extinguished by prescription.

The Eleventh First Instance Civil Court upheld the defective-complaint objection. Public Deed Number Sixteen, dated March 6, 1984, contains in clause twenty-five the provision that disputes between the company and its shareholders arising from the corporate charter or corporate activities shall be resolved through summary proceedings. The court determined that the conflict originates from corporate activities (the obligation to pay dividends to Lisa as holder of 25% of the shares) and that the ordinary proceeding was the wrong procedural vehicle under the pacta sunt servanda principle of Article 1519 of the Civil Code. The remaining objections were denied: lack of jurisdiction because the legal acts took place in Guatemala; lack of legal standing because Lisa failed to produce the mandate document whose limitations it alleged; and failure to comply with condition and term because those arguments are substantive matters for trial.

The ordinary lawsuit filed by Inversiones Empresariales, S.A. was rejected.

The rejection of the complaint on defective-complaint grounds is a favorable outcome for Lisa, S.A., preventing Inversiones Empresariales from extinguishing through prescription Lisa's dividend rights that the plaintiff itself helped to embargo. The court did not reach the merits of Lisa's arguments regarding prescription interruption by embargoes and the express recognition of the obligation, issues that remain relevant to Lisa's position across the broader litigation.