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In May 2019
the United States ended the suspension of rights of Americans under the Helms-Burton
Act to sue for losses arising from the Cuban government’s expropriation of
their properties in Cuba. The following
month, a Cuban-American and his company, heirs to former owners of expropriated
Cuban land, sued the Spanish hotel chain Melia, which leased that land (in
Playa Esmeralda, a popular beach vacation destination) to operate a hotel.
Why bring
such a claim in Melia’s home jurisdiction?
The Spanish Civil Code establishes a right to receive the fruits of
possession in bad faith and profiting off confiscated land. Also, it may be hard to enforce in Spain an
American judgment. Such a judgment, which
would be based on the Helms Burton Act, would face the hurdle of an EU
blocking law (EU Council Reg. 2271/96) which aims to protect E U residents and companies
against the effects of extra-territorial legislation of foreign countries.
Not
surprisingly the Spanish Court was not receptive. But its analysis was
principled and should guide courts in other cases brought under Helms
Burton. The Court noted that the
claim is based primarily on “the illegality of Cuba’s nationalization of the
land”. That meant the court would have
to “assess the legality of the nationalization, or the confiscation” in order
to decide whether Melia was “illicitly enriched” through its use of the
land.
The Court
had at least three reasons not to accept the claim. One,
the nationalization was a state action of a foreign country, exercising its
sovereign powers, over which action the Spanish court has no jurisdiction. Spain, like Canada, has a statute giving
foreign states immunity from most legal claims: the Foreign State Immunity Act (Spanish law 16/2015). This statute, like Canada’s, carves out an
exception for commercial dealings.
However, even though the hotel’s
lease and use of the land is commercial, the underlying issue of the
expropriation is not, and so the Court held the exception did not apply.
Two, Spanish courts –like Canadian courts –
generally will not take jurisdiction over cases pertaining to foreign
land.
Three, to
assess the legality the nationalization would entail an analysis of the law of
Cuba as of the time of the expropriation, the circumstances surrounding the
expropriation, and the fairness of the compensation offered for the land. Testimony from Cubans would certainly be
necessary. Some may be very elderly and
unable to travel. If this claim was
subjected to a forum non conveniens
analysis, a court may well find Cuba to be the more appropriate jurisdiction.
The ruling
is under appeal.
