Cerro Colorado Dividend Prescription Claim Against Lisa Rejected on Preliminary Exceptions

I. Ordinary Action and Resolution of Preliminary Objections

Order

Cerro Colorado, S.A., an entity within the Avícola Villalobos Group incorporated in Guatemala by public deed number fifty-six dated June 15, 1983, filed an ordinary action for extinctive prescription against Lisa, S.A., a Panamanian company and shareholder of Cerro Colorado. The plaintiff alleged that Lisa's right to collect dividends decreed at five annual general shareholders' assemblies (2006, 2008, 2009, 2010, and 2011) had prescribed because more than five years had elapsed without Lisa exercising that right, invoking articles 1501 and 1508 of the Civil Code. Cerro Colorado submitted as evidence a certificate from its board secretary dated February 14, 2017, and an accounting certification from certified accountant Winston Alexander Mencos Caal dated February 2, 2017.

Lisa, S.A., through its special judicial representative Katty Aime Reyes Martínez, raised four preliminary objections. Incompetence, arguing that the Guatemalan court lacked jurisdiction over a Panamanian entity without domicile in Guatemala. Defective complaint, on two grounds: the ordinary track was incorrect because article 1039 of the Commercial Code and clause twenty-five of Cerro Colorado's articles of incorporation require summary proceedings for disputes between the company and its shareholders, and the complaint failed to specify the amount of the obligation and omitted foundational documents. Failure to fulfill condition, because Cerro Colorado had not obtained a shareholders' assembly resolution to suppress the right to dividend payment per articles 137 and 149 of the Commercial Code. Failure to fulfill term, invoking two grounds for prescription interruption: in 2011, when resolving to exclude Lisa as a shareholder, Cerro Colorado expressly recognized Lisa's patrimonial rights and instructed the administration to liquidate her share without raising any prescription defense; and the Avícola Group entities themselves maintained precautionary embargoes on Lisa's dividends, decreed in various judicial proceedings, which prevented Lisa from collecting those dividends. Lisa characterized the lawsuit as a fraud upon the law: the same entities that had embargoed Lisa's dividends were now seeking to have them declared prescribed.

The Eleventh First Instance Civil Court denied the objections of incompetence, failure to fulfill condition, and failure to fulfill term. On jurisdiction, the court held that the action relates to juridical acts performed in Guatemala, relying on articles 33 and 34 of the Judiciary Act and Constitutional Court rulings in cases 1161-2004, 3754-2010, and 432-2012. On condition and term, the court held that Lisa's arguments were substantive matters for resolution at trial, not through preliminary objections.

The court sustained the preliminary objection of defective complaint. It examined clause twenty-five of Cerro Colorado's articles of incorporation, which provides that disputes between the company and shareholders that cannot be resolved directly "shall be settled through summary proceedings before the ordinary courts." Applying the pacta sunt servanda principle under article 1519 of the Civil Code, the court concluded that the ordinary track was not the appropriate procedural route and rejected the complaint. It cited Constitutional Court rulings in cases 4793-2013, 4524-2014, and 1675-2014.

The ordinary action filed by Cerro Colorado, S.A. was rejected outright, and costs were imposed on the losing party.

Cerro Colorado's extinctive prescription action was dismissed at the preliminary stage without reaching the merits. Lisa, S.A. successfully prevented the case from advancing by demonstrating that the plaintiff deliberately chose an incorrect procedural track despite its own articles of incorporation requiring summary proceedings. This lawsuit is part of a coordinated series of extinctive prescription actions filed by Avícola Villalobos Group entities against Lisa, S.A. across multiple Guatemalan courts, all seeking declarations that dividends owed to Lisa have prescribed, while the same entities maintain embargoes that prevent their collection.