Carnival Corp. is the first U.S. company sued for using ‘stolen’ property in Cuba
In an expanding legal battle, Exxon Mobil has filed suit in U.S. federal court against Cuba’s CIMEX and CUPET companies for their use of an oil refinery and other properties seized by the Fidel Castro government six decades ago.
Exxon Mobil is the first U.S. company to file suit against Cuban companies after President Donald Trump allowed Title III of the Helms-Burton Act to take effect, opening the way for demands against Cuban and foreign companies that benefit from properties seized by the communist government.
Title III had been suspended every six months by every U.S. president since the law was approved in 1996.
The Exxon Mobil lawsuit, filed in federal court in Washington Thursday, followed two other complaints filed in U.S. court in Miami against Carnival Corp. for the use of port facilities in Havana and Santiago de Cuba, by descendants of the families that owned the docks and warehouses.
“This filing is immensely significant. The largest energy company in the United States, the fifth-largest energy company in the world (is) using Title III … to sue a company owned by the government of Cuba,” said John Kavulich, president of the U.S-Cuba Trade and Economic Council.
“This provides comfort for other large claimants to sue, will increase fear by companies in other countries from engagement with Cuba due to the reach of Exxon Mobil and is consistent with Exxon Mobil efforts to recover assets in Venezuela and defend themselves in other countries,” he added.
Exxon has filed suit against the Venezuelan government’s PDVSA oil company for the nationalization of properties during the government of the late President Hugo Chavez.
Exxon Mobil, a successor company to Standard Oil, argued in its lawsuit that CIMEX and CUPET (Cuba Petroleo) have long exploited a refinery in Havana, formerly called the Belot and now the Nico López refinery, as well as gasoline stations and other installations that were worth $72 million when they were seized by the Castro regime without compensation in 1960.
The Helms-Burton law allows companies to demand three times the original value of the seized properties, plus six percent per year and court costs.
The U.S. Department of Justice has certified nearly 6,000 claims by U.S. citizens and companies for properties expropriated after Castro seized power in 1959. Now Cubans who became U.S. citizens after their properties were seized will also be able to file lawsuits under Title III.
Cuban Foreign Minister Bruno Rodríguez said Thursday his government will protect the companies facing lawsuits under Title III, but offered no details.
“The Helms-Burton law is illegal, violates international law, cannot be applied and has no legal weight or impact,” he declared on Twitter. “Cuba will protect the Cuban and foreign entities operating in the country, and considers all demands based on that judicial monstrosity to be null.”
Kavulich warned of rough waters ahead for Havana.
“Regardless of the position of the government of Cuba, if enough certified claimants use Title III, there will be immense pressure upon Cuba by members of the EU, Canada, Japan, Russia and China to negotiate a settlement with the 5,913 certified claimants,” he said.
Founded by the Cuban Ministry of the Interior, CIMEX is on the list of restricted Cuban entities maintained by the U.S. Department of State. It is now part of GAESA, a conglomerate controlled by the Cuban military, and administers shops, restaurants and real estate agencies. With CUPET, it operates hundreds of gas stations on the island.
One CIMEX branch, Fincimex, has a contract with Western Union to deliver remittances to island residents, one of the principal sources of hard currencies for the country.
CUPET also co-managed a gasoline refinery in Cienfuegos with Venezuela’s PDVSA until 2017, when CUPET took over sole management of the facility.
In the past, a number of people have won lawsuits in U.S. courts against Cuba, but have been largely unable to collect on the damages awarded because the Cuban government no longer has properties or accounts in the United States that can be seized.
But that apparently did not dissuade Exxon Mobil, which has a powerful legal team, from filing its lawsuit.
Kavulich said the oil giant could try to seize some part of the fees that Western Union or other clients pay to CIMEX for the remittances. Western Union itself has a certified claim against Cuba for more than $1 million.
Exxon Mobil has “the commercial, economic and political reach to locate assets and litigate for assets,” Kavulich said. “And, the Trump Administration will certainly assist in whatever way is viable.”