Court In Spain Rules Against Melia Hotels Effort To Obtain Ruling By Court Of Justice Of the European Union
/A court in Palma de Mallorca, Spain, has rejected a motion by Palma de Mallorca, Spain-based Meliá Hotels International (2019 revenues approximately US$2.1 billion) to suspend procedure and to refer a preliminary ruling to the Court of Justice of the European Union.
Against this resolution, there is reportedly only an appeal for reconsideration that would be before the same judge. If, as expected, Melia Hotels International files an appeal, plaintiff counsel believes the court will again reject motion/appeal based upon the same arguments.
The court did formally require within ten days the defendant provide original documents.
LINK To Interlocutoria (6 July 2020)
LINK To Antecedentes De Hecho (6 July 2020)
LINK To Defendant Document Requirement (6 July 2020)
LINK To Letter From Attorney For Melia Hotels International (15 June 2020)
Related Post
There Is Jurisdiction For The Issue Of Unjust Enrichment
Melia Hotels International Wants Spanish Courts To Link Lawsuit To Libertad Act So European Union (EU) Blocking Statutes Can Be Invoked
Libertad Act Plaintiffs In United States Will Be Monitoring Discovery Process
Background
On 12 March 2002, Palma de Mallorca, Spain-based Meliá Hotels International (2019 revenues approximately US$2.1 billion) reportedly offered US$5 million to the descendants of Mr. Rafael Lucas Sanchez Hill as payment to prevent the United States Department of State from using Title IV relating to the Sol Rio de Oro Hotel in response to enactment in 1996 of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as "Libertad Act").
Title IV of the Libertad Act restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims. Employees of one Canada-based company is currently known to be subject to this provision based upon a certified claim.
On 26 March 2002, Sol Melia International, reportedly believing the [George W. Bush Administration; 20 January 2001 to 20 January 2009] United States Department of State would neither implement Title III nor Title IV of the Libertad Act, Melia Hotels International withdrew the offer of US$5 million and proposed US$3,197.75 representing a value (.06%) based upon the twenty-nine (29) acres of land occupied by the Sol Rio de Oro Hotel of the approximately 120,000 acres of land claimed by the descendants of the owners of the property. The US$3,197.75 was determined by Melia Hotels International as the corresponding percentage of the US$5 million tax loss carry-forward amount with the Internal Revenue Service (IRS) in the 1960's.
On 29 May 2019, descendants of Mr. Rafael Lucas Sanchez Hill, acting as Central Santa Lucia L.C., filed a lawsuit in Spain seeking US$10 million from Meliá Hotels International seeking damages for the use of land upon which a hotel is located in the Republic of Cuba. The lawsuit is not using provisions of Title III of the Libertad Act.
Title III of the Libertad Act authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.
On 3 September 2019, the court in Spain dismissed the lawsuit on grounds of jurisdiction. On 30 September 2019, the plaintiffs filed an appeal.
In October 2019, Melia Hotels International reported receiving a Title IV letter from the United States Department of State; unknown is which property or properties in the Republic of Cuba were the basis for the letter. Melia Hotels International has refused to release the text of the Title IV letter, so uncertain whether the letter was a) a request for information about Melia Hotels International operations in the Republic of Cuba to determine whether there may be issues relating to the Libertad Act or b) a notification that executives and their families are to be denied entry into the United States.
On 18 October 2019, Melia Hotels International filed its 55-page response including reference to European Council (EC) Regulation No. 2271/1996 enacted on 22 November 1996.
On 4 February 2020, executives of Melia Hotels International reported receiving a letter from the United States Department of State notifying the company that visas had been revoked for senior executives.
On 18 March 2020, the Spanish Appellate Court ruled the lawsuit against Melia Hotels International would proceed.
Other hotel management companies operating in the Republic of Cuba- those already listed as defendants in lawsuits and those notified by plaintiff attorneys as potential defendants in lawsuits could be impacted by the offer in 2002 by Melia Hotels International S.A., particularly as the company has the largest number of properties under management in the Republic of Cuba.
LINK To Spanish Appellate Court’s Decision (18 March 2020) Spanish
LINK To Spanish Appellate Court’s Decision (18 March 2020) English- Google Translate
LINK To Case Filings
Previous Posts
Plaintiffs Appeal Dismissal Of Lawsuit In Spain Against Melia Hotels; Plaintiffs Sue In U.S.; Why Did Melia Hotels Offer US$5 Million Then US$3,197.75?
October 05, 2019
Court In Spain Dismisses Lawsuit Against Melia Hotels International Relating To Operations In Cuba; Plaintiffs Now Expected To Sue In U.S. Using Libertad Act
September 04, 2019
Recent Court Filings In Spain (Not United States) Lawsuit Against Melia Hotels International
July 23, 2019
Vozpopuli (Madrid, Spain) 10 July 2020
https://www.vozpopuli.com/economia-y-finanzas/melia-cuba-tribunales_0_1371764169.html
Translation:
“New setback for Meliá. The Court of First Instance number 24 of Palma de Mallorca has issued a resolution dated July 6, in which it rejects the three requests raised by the Spanish hotel company in its war with the Cuban family Sánchez Hill for the exploitation of two of its hotels in Cuba, as recorded in the documentation consulted by Vozpópuli.
Specifically, Meliá had transferred to the judge that the Sánchez Hill lawsuit is a “covert attempt” to avoid the effects of community regulations regarding the extraterritorial application of legislation adopted by a third country. It had also requested that the judge refer a preliminary question to the Court of Justice of the European Union (CJEU) for indications on how to proceed and, finally, he had requested the adoption of measures aimed at maintaining the confidentiality of the process. The court has rejected everything.
In the first place, Meliá points out that Central Santa Lucía is a company incorporated with the sole objective of claiming compensation for the confiscations of the Castro dictatorship and claims that the present case is a claim based, indirectly, on the Helms-Burton Act , which has no effect in Spain thanks to the Blocking Statute of the European Union.
The Sánchez Hill, advised by the lawyer Alejandro Gimeno-Bayón, do not resort to the controversial law in their argumentation and support their thesis in the so-called unjust enrichment, on which the Spanish justice can pronounce itself. The court agrees with this argument and recalls that the procedure "will resolve only and exclusively a claim for unjust enrichment." Thus, it rejects both the procedural and the preliminary questions.
Regarding the maintenance of the confidentiality of the process, Meliá expresses his fear that the Sánchez Hills may collect documentation that they can use against the hotelier later in a proceeding in the United States. The Escarrer hotel company, which has signed Garrigues for its defense, had asked the Sánchez Hill to sign a document that they would refrain from revealing or disseminating the documentation of the process or from initiating actions under the Helms-Burton in the United States.
The court assures not to appreciate cause that justifies the adoption of measures "so restrictive and contrary to the general principle of the publicity of the actions, essential in a democratic society". In addition, she adds that Meliá has not demonstrated that the Sánchez Hills have any idea of using this procedure to initiate actions in the United States.
When asked about this matter, the hotel company assures Vozpópuli that "it is not surprised by the decision taken by the Court not to raise the procedural incident of a preliminary ruling before the CJEU, since the judge considers that it can be resolved with strict application of applicable Spanish law ". Likewise, Meliá insists that "there are evident factual and legal elements for the claim to be dismissed in its entirety."
A year of judicial swings
This is the last chapter of a judicial battle that started a year ago, in June 2019, when the family of Cuban origin Sánchez Hill filed a lawsuit against the hotel chain for "unjust enrichment" by operating two hotels, Paradisus Rio de Oro and Sol Rio and Luna Mares, in land that was expropriated after the Castro Revolution of 1959.
The lawsuit reached the Spanish courts after the United States reactivated the controversial Helms-Burton Act, the regulation that allows nationalized Americans and Cubans to claim compensation for the goods that were confiscated by Fidel Castro, although Spanish Justice cannot assess this matter and, therefore, the lawsuit is not based on said law.
Three months later, the Court of First Instance nº 24 of Palma de Mallorca filed the case due to the absence of jurisdiction and lack of international judicial competence of the Spanish courts. However, the process that seemed buried took an unexpected turn in April, with the reactivation of the lawsuit by the Provincial Court of Palma de Mallorca, which upheld the appeal filed by the Sánchez Hill.
The judicial body understands that the Spanish courts do have jurisdiction and international judicial competence to process a procedure against a company domiciled in Spain in the exercise of what it seems to identify as a personal action for compensation. With which, he returned the case to the Court of First Instance number 24 in Palma.
Now the magistrate has rejected Meliá's attempt to suspend the procedure and, with this resolution, the chain has only one last bullet left: the appeal for reinstatement before the same court in the five days following the notification, that is, before of Saturday. The plaintiffs claim compensation from Meliá for at least ten million dollars.”
