The US Supreme Court on Friday agreed to weigh in on two major disputes testing the reach of a federal law that permits Americans to sue for damages over property confiscated by Cuba following the 1959 revolution.
In both instances, the outcome could transform the firm’s capabilities to seek reimbursements decades later following the nationalisations effected by ex-Cuban chief Fidel Castro.
An example is ExxonMobil, which is seeking damages from Cuban state-owned companies for the expropriation of oil and gas assets in 1960.
The other involves Havana Docks Corporation, a Delaware-registered firm whose Cuban port facilities have been nationalised, which is trying to re-enforce judgments against several cruise line operators that subsequently utilised the site.
According to Reuters, on Monday, the new nine-month term for the high court will begin.
ExxonMobil and the Helms-Burton Act
Castro nationalised foreign-owned energy holdings in the early 1960s without compensation, wiping ExxonMobil’s assets in Cuba and costing the company the equivalent of over US$700m in claims today.
Exxon has never received compensation.
In 2019, the oil giant sued three Cuban state-owned entities, Corporación Cimex, S.A. (Cuba), Corporación Cimex, S.A. (Panama) and Unión Cuba-Petróleo.
The firm insisted that these companies continue to benefit from the expropriation of property from 60 years ago.
Against this background, Exxon bases its assertions on the Helms-Burton Act: a US law from 1996 allowing lawsuits from any US national against any entity “trafficking” in property taken from a US national by the Cuban government after January 1, 1959.
It further includes a provision that allows the US president to suspend that provision, a suspension that every administration has enacted until 2019, when then-President Donald Trump suspended the suspension.
Then came years of litigation, but not about culpability, but rather when a legal threshold was met. And that wasn’t the end of it.
The United States Court of Appeals for the District of Columbia Circuit ruled that plaintiffs had to go through what we can only describe as an extra hoop: the Foreign Sovereign Immunities Act, which prohibits foreign governments from being sued in US courts unless a narrow exception applies.
Exxon asked the Supreme Court to overturn that decision and allow its claims to proceed.
Havana Docks and the Cruise Line dispute
The second involves Havana Docks Corporation, which in 1934 was given a 99-year concession to build and operate the piers in the Havana port.
Those rights were expropriated without compensation after the Cuban revolution. Between 2016 and 2019, the terminal was used by cruise operators, which the company argued amounted to trafficking in confiscated property.
Havana Docks sued Carnival, Norwegian, Royal Caribbean Cruises and MSC Cruises shortly before the 2019 legislation in federal court in Florida.
One judge ruled in favour of the company, which said the lines had trafficked in violation of the Helms-Burton Act, and issued judgments of over $100 million against each operator.
That verdict was overturned last year by the 11th US Circuit Court of Appeals, which determined that Havana Docks had no viable claim because its concession expired well before cruise lines moored ships there in 2004.
The Supreme Court will now rule on the judgment’s resurrection.
Implications of the cases
The two cases mark the first time the Supreme Court has interpreted the Helms-Burton Act’s scope since its passage over three decades ago.
The decisions may determine whether decades-old expropriations can still result in accountability for entities accused of benefitting from confiscated property.
If Exxon and Havana Docks prevail, the verdicts might pave the way for future claims against Cuban state-owned companies and other corporations that have done business with them.
If the court agrees with the lower appeals courts, the rulings may severely limit the scope of lawsuits under the statute.
For the time being, the justices are ready to rule on a long-running legal struggle involving Cold War-era expropriations that are still being heard in US courts today.
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