Meliá faces $10 million lawsuit for hotels on confiscated properties in Cuba

Descendants of former Cuban businessman Rafael Lucas Sánchez Hill have filed a lawsuit in Spain against the Meliá hotel chain.

The Sanchez Hills, who live in the United States, are seeking $10 million as indemnification for Cuba lands seized by the government in 1960, after Fidel Castro seized control of the island. The land is now the site of some hotels built by the Cuban armed forces and run by the Spanish hotel chain.

The Spanish newspaper El Confidencial reported that it was the first lawsuit ever filed in Spain by Cuban Americans against Spanish companies that benefit from expropriated properties in Cuba.

The lawsuit follows the Trump administration’s full implementation of Title III of the Helms-Burton Act on May 2. The law allows owners of properties confiscated by the Castro Revolution to file suits in U.S. courts against entities that “traffic” in those properties.

The Sanchez Hills and Meliá had been negotiating for some time and had been close to reaching an agreement for $5 million. But the hotel chain, believing that Title III was unlikely to ever be enacted, dropped its offer to $3,000 and no agreement was reached. The lawsuit will be heard by Spanish courts, so it will not be covered by Title III.

The Sanchez Hill family fled to the U.S. from Cuba after the government expropriated its Santa Lucia sugar mill near the eastern city of Holguín and surrounding lands totaling more than 100,000 acres. The patriarch of the family built the mill in 1857, after he moved to Holguín from Matanzas. But Law 890, signed in 1960 by then Cuban President Osvaldo Dorticós, left them with nothing.

Enterprises owned by the Cuban armed forces have since built several hotels on that land, including the Meliá Sol Río de Luna y Mares, Paradisus Río de Oro, Costa Verde and Playa Costa Verde, among others.

The lawsuit, filed in the city of Palma de Mallorca, demands indemnification equivalent to the benefits the family claims that the hotel chain received from its use of the land during the past five years, according to El Confidencial. It also criticizes the chain for its attitude on the claims against it.

“The illegal nature of this confiscation is known to Meliá, which over the past 20 years has ignored the claims by those enterprises and families from which it benefits,” the lawsuit declares, according to the newspaper.

Meliá is the foreign company that administers the most hotels in Cuba, at least 34 so far. Iberostar follows it with 20 hotels. Both companies have been strongly criticized by human rights groups and opponents of the Cuban regime because of the circumstances surrounding their investments on the island.

Until 2008, Cubans were barred from staying in tourist hotels, and the salaries of workers in the international hotels now barely stand at a few dozen dollars per month.

“Throughout these 31 years we have been clear: Our bet on Cuba is unconditional. We believe this is totally unfair, all these measures,” Gabriel Escarrer, executive vice president of Meliá Hotels International, told Cuban government television after Title III was activated.

“Because of that, we will continue with our plan. We will continue collaborating closely with Cuban authorities in the development of the country’s tourist industry, which I believe is a model in every sense,” he added.

The company expects to have 38 hotels and more than 15,000 rooms on the island by 2020.

Escarrer visited the island with Reyes Maroto, Spain’s minister for industry, trade and tourism, who tried to reassure Spaniards who have invested in Cuba.

She said her government wants Spanish companies to continue investing in the island and contribute to its development. She criticized President Donald Trump but also urged the Cuban government to pay the $300 million owed to Spanish enterprises.