I agree with Hillbilly -- never show up in court without a lawyer.
I would add to that by saying you should get a clear price from this lawyer as to what the appearance will cost you. A one-off price, not a price to fix the problem, nor a price to handle the initial case, etc, but a price which will include getting him up to speed on the case, advising you on the case and making that initial appearance. Get a clear number, not an "we'll work it out later".
But more to the point, it would seem from what you've posted (as you haven't posted the actual contract) that:
1) You are in breach of the spirit of the agreement
2) There is room to move with the "no pets" clause
3) The landlord is open to compromise
This being the case, there is no reason for you and your landlord to be in court. The fact that you are being served would seem to suggest you have dropped the ball at some point and missed at least one opportunity to come to an equitable arrangement.
A few mistakes you seem to have made (I say 'seem' because I can only go on what you've written). Please don;t take this as a personal attack, but rather as a response to your story with some well-intentioned advice:
1) "We talked more with the "rep" and explained that in our eyes we were not in breach of the contract. She tried to say that may the "permanently" issue was lost in translation. I explained that I understood the translation and that she would have to seek legal advice on it." She is giving you a way to move from your original position while saving face. You have replied by almost daring her to sue you. Which she has now done.
2) "The "rep" offered us a "compromise" of having our dog kept in a pen round the back of the shops (still on Plaza land). We refused(...)" So the rep is offerring a compromise, again trying to give you a way to move from your position while saving face. Rather than countering with another suggestion, you have outright refused.
3) You brought the dog to your property on a regular basis without asking the landlord first. That the other shopowners don't mind is not all that relevant if you don't do the landlord the courtesy of asking her as well.
4) "The lady in question is a member of the family who owns the parcel of land we are on, and although her mother is the person we have the contract with, this lady considers herself to be the representative of the owners and therefore deals with any "issues"." While legally the contract is with the person who owns the land and no other, family is a big deal in the DR, and for all intents and purposes, dealing with a member of the family is the same as dealing with the landowner. Whether you agree or not, that's the way it is here.
5) "2 months ago we were approached by one of the other shop owners and told we could no longer bring our dog with us." You have had two months in which to come to terms with the landlord regarding your dog, and from what I can read, haven't made a real effort to find a solution that allows both you and your landlord to come to a mutually acceptable solution. Is it any wonder you are now being served?
6) "She moved her birds when she was offering us the compromise of a pen for our dog." Seems to me she is trying to be reasonable and making a good faith effort to come to terms with you. How are you responding to these gestures?
7) "Once we started discussing it we were told that the issue was not in fact with our dog specifically." This is your landlord trying to find common ground with you, rather than fight you. It's an olive branch. What did you do with this olive branch?
8) When the marina police showed up, that presented you with another opportunity to come to terms. Instead you chose to view it as the landlord being sneaky. Well, since speaking directly with you has so far gotten her nowhere, sending in a middleman (even the police) to try to get you to accommodate her seems like a logical next step.
To sum up: Your contract makes mention of pets not being allowed (putting aside what 'permanently' is supposed to mean. Rather than seek clarification of exactly what is meant in your contract, or asking for an exemption (thereby giving your landlord the opportunity to graciously allow your pup to visit you), you chose to bring your dog and see what happened.
When your landlord complained and offered a compromise, you refused rather than offer alternative arrangements. Your landlord's options at this point? Follow-up or lose face.
When your landlord followed up, you made reference to the contract, rather than to what you can do to fix the issue. When the landlord gave you a way to come back to the table, you told her to get a lawyer. Her options? Get a lawyer or lose face.
At what point in this dispute did you make an effort to allow your landlord a gracious way out while saving face?
From your story, it seems like your landlord is being extremely reasonable, and you are simply refusing to budge. Now you find yourself in court, which will cost you a lot in unnecessary legal fees. More to the point, you are alienating someone with whom you will have a continuing business relationship and who has seemingly offered on several occasions to resolve this matter amicably.
My advice to you? Apologize for letting this matter get this far, and ask if you can start over again. You would be amazed at how powerful a simple apology can be. Find some middle ground, even if it doesn;t seem to make 'logical' sense. They have an issue with your dog being outside your shop? What about if you kept it inside the shop? What if you agreed that you would have the dog with you only for the next few months (unitl it is old enough to be left alone at home) and that after that you will leave it at home? The court won't reach a decision before then anyways. Hell, you could even set up a security camera out the back to keep an eye on him
Or, you could look into alternative retail space. Or you could pay a tonne of legal fees and alienate your landlord even more (have fun renewing when your contract is up, by the way...). Remember as well that there are a lot of ways to deal with a nuisance dog -- your landlord is chosing the most civilized way, for which you should be thankful.
Again, I know most people don't want to hear criticism and my input may not be as welcome some other people's, but I hope you will take it to heart and thereby avoid similar problems in the future.
Good luck, and let us know how it goes!
Joe
PS: Seek proper legal advice for the following, but:
1) To the best of my knowledge, judicial acts have to be served by alguacils, not politur, to be legally 'received' unless otherwise stated in the contract.
2) When there are parts of a contract that are unclear, the courts are supposed to interpret them in favour of the party who did NOT prepare the contract.
3) Courts will attempt to apply the spirit of the agreement (which is supposed to be clear from the wording). When the spirit of the agreement is in dispute, but the wording is clear -- the letter of the contract is what counts.