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Exxon's compensation claim to Cuban entities will be heard by the US Supreme Court

The U.S. Supreme Court has agreed to hear ExxonMobil’s request for compensation from Cuban state owned firms. These assets were seized by Cuban government-owned companies in 1960. This was done under a federal statute that allows Americans to sue foreign individuals and companies over confiscated property.

The Justices heard Exxon's appeal against a lower-court ruling that undermined its legal efforts to obtain compensation from Cuban companies who allegedly profited by stealing property.

The court also heard a similar request by a Delaware registered company that had built port facilities in Havana that were seized by Cuba in 1960. It sought to reinstate $440 million of judgments against Carnival Cruise Line, Norwegian Cruise Line, and two other cruise companies that used the terminal.

On Monday, the Supreme Court will begin its new nine-month session.

Exxon's dispute is about the former Cuban leader Fidel Cuba's confiscation all its oil and natural gas assets in Cuba. This loss, valued at over $700 million now, was caused by Castro. Cuba has not paid Exxon any compensation, but the Helms-Burton Act gives the oil company the opportunity to sue in a U.S. Court for damages.

Helms-Burton Act gives U.S. citizens who own property in Cuba the right to sue any person who "traffics property that was confiscated by Cuban government on or after 1 January 1959." The Helms-Burton Act also allows the U.S. President to suspend this provision if it is deemed necessary to "protect the national interest of the United States."

Exxon sued three Cuban state owned companies in 2019 for compensation, claiming that they continue to profit from their stolen property. These Cuban state-owned firms are Corporacion Cimex S.A., S.A., (Cuba), Corporacion Cimex S.A., (Panama), and Union Cuba-Petroleo. The litigation lasted for years, focusing on jurisdictional issues rather than liability.

The U.S. Court of Appeals, District of Columbia Circuit, concluded that plaintiffs bringing Helms-Burton Act cases must satisfy an exemption under a separate U.S. law: the Foreign Sovereign immunity Act. This act shields foreign governments against lawsuits in the United States unless there is an exception.

Havana Docks Corporation, in the cruise line dispute, sued four cruise lines in Florida federal court in 2019. Havana Docks constructed piers in the port before the Cuban Revolution, which took place in the 1950s. It is now seeking compensation from cruise operators for using the property between 2016 and 2019.

Fidel Castro, Cuba's leader, nationalized and expropriated U.S. property shortly after he came to power in 1959. This included Havana Docks which held a concession granted by Cuba in 1934 for a 99-year period of construction and operation at the Havana port.

Cuba has not paid compensation to Havana Docks. However, the Helms-Burton Act gives the company the opportunity to sue in U.S. courts for damages.

A federal judge ruled the cruise lines were guilty of trafficking for docking their ships at the terminal. Each of the four companies was fined more than $100,000,000.

The 11th U.S. Circuit Court of Appeals, located in Atlanta, threw out these judgments last year. It found that Havana Docks did not have a viable claim because its concession would have expired in 2004, well before the cruise lines used the facilities. The 11th U.S. Circuit Court of Appeals, based in Atlanta, threw these judgments out last year. It found that Havana Docks had no claim since its concession expired in 2004, long before cruise ships used the facilities.

Both parties of the U.S. presidency chose to suspend the law. This meant that private lawsuits were not allowed to proceed. In 2019, during President Donald Trump's first term, he lifted the suspension. This triggered a new wave of lawsuits in U.S. courtrooms against Cuban state owned entities and some American companies accused of trafficking confiscated property.

(source: Reuters)