Summary
- Exxon oil and gas assets in Cuba were seized in 1960
- Energy giant seeks compensation from Cuban entities
- Court will hear second case involving cruise lines
- A US law called the Helms-Burton Act in the spotlight
(Reuters) – The U.S. Supreme Court will consider on Monday the scope of a law that lets American companies seek compensation for property seized by Cuba in cases involving ExxonMobil and cruise operators being argued at a time when President Donald Trump’s administration is ramping up pressure on the Cuban government.
The court will hear back-to-back arguments in two cases involving a 1996 U.S. law called the Helms-Burton Act, which permitted lawsuits in U.S. courts against anyone who “traffics” in property confiscated by Cuba’s communist government after the 1959 revolution that brought Fidel Castro to power.
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In one of the cases, Exxon is seeking more than $1 billion in compensation from Cuban state-owned entities for the energy major’s oil and gas assets seized by Cuba’s government in 1960.
The other case involves whether four cruise operators – Carnival, Royal Caribbean, Norwegian Cruise Line and MSC Cruises – should be liable for using docks built by an American company that Cuba also seized in 1960. The cruise lines case will be argued first.
Exxon is backed by the Trump administration in the litigation.
The administration has declared Cuba “an unusual and extraordinary threat” to U.S. national security, cutting off the flow of Venezuelan oil to the Caribbean island nation and threatening to slap tariffs on any country supplying it with fuel.
While the two cases focus on distinct legal issues, both raise the question of just how powerful a remedy Congress intended the Helms-Burton Act to be. In both cases, the Supreme Court has the opportunity to eliminate barriers that claimants face in bringing lawsuits under the statute.
Castro’s confiscation of all of Exxon’s Cuban oil and gas assets represented a loss valued at $70 million at the time. Exxon’s current claim is worth much more than that because of interest and the potential for enhanced damages.
Exxon in 2019 sued Corporación CIMEX, Cuba’s largest conglomerate. Exxon accused CIMEX of continuing to hold and profit from the confiscated property.
Exxon appealed to the Supreme Court after a lower court ruled that Cuban state-owned entities facing Helms-Burton Act lawsuits can invoke a legal defense called foreign sovereign immunity, which shields foreign governments and their agents from U.S. lawsuits unless an exception applies.
The cruise line case was brought by Havana Docks, a U.S. entity that had a 99-year concession for the construction and operation of docks at Havana’s port, granted in 1934 by Cuba’s government at the time. Castro’s government revoked that agreement.
The four cruise lines sued by Havana Docks used the terminal from 2016 to 2019, after then-President Barack Obama eased travel restrictions on the Caribbean island nation.
A federal judge ruled that the cruise lines had unlawfully engaged in trafficking by using the terminal, and imposed judgments of more than $100 million against them. Havana Docks appealed after a lower court threw out those judgments, finding it did not have a viable claim because its concession would have expired in 2004, well before the cruise lines used the facilities.
When it passed the Helms-Burton Act, Congress authorized the U.S. president to suspend on national security grounds its provision allowing suits in U.S. courts. The provision was then suspended by three presidents seeking to avoid diplomatic conflicts with allies like Canada and Spain whose companies have invested in Cuba. Trump lifted that suspension in 2019 during his first term in office.
Reporting by Jan Wolfe in New Orleans; Editing by Will Dunham
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