Judge Rules Against Plaintiffs In Non-Libertad Act Title III Lawsuit Against Spain's Melia Hotels; Lawsuit Will Continue
/On 3 May 2021, Judge Margalida Victoria Crespi, Magistrate-Judge of the Court of First Instance No. 24 of Palma, Spain, again rejected the jurisdiction of the Court to hear the procedure, which obliges again plaintiffs to return to the Provincial Court.
Neither Gaviota S.A. nor the government of the Republic of Cuba responded to the Court. Judge Crespi then ruled that since the defendants did not respond, and they are indispensable parties to the lawsuit, the case cannot go forward. Plaintiffs will appeal. LINK To Ruling
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 Palma de Mallorca, Spain-based Melia Hotels International S.A. (2019 revenues approximately US$2 billion) 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 Cuban Liberty and Democratic Solidarity Act of 1996 (known as “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 11 January 2021, the judge ordered the inclusion of the government of the Republic of Cuba and Gaviota S.A., but not Gesmesol S.A. Plaintiff attorneys objected as the complaint alleges “unjust enrichment” only against Melia Hotels International S.A. Plaintiff attorneys did not appeal the order to avoid the risk of a dismissal. Plaintiff attorneys are serving the government of the Republic of Cuba and Gaviota S.A. through the required diplomatic channels. The government of the Republic of Cuba may claim sovereign immunity, but Gaviota S.A. is subject to the jurisdiction of the court. The government of the Republic of Cuba and Gaviota S.A. are not subject to plaintiff claim of “unjust enrichment,” but are deemed necessary parties by the judge since they are responsible for the initial expropriation and current operation of property of plaintiff.
On 10 February 2021, Central Santa Lucia L.C. filed its response to the court. The focus of the response was the government of the Republic of Cuba may only be added as a defendant if the government of the Republic of Cuba consents to being a defendant; the plaintiff does not believe the government of the Republic of Cuba needs to be a defendant while Melia Hotels International S.A. believes that the government of the Republic of Cuba should be a defendant.
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