US Supreme Court OKs ExxonMobil in Castro-era expropriation case | Business and Financial Issues

The U.S. Supreme Court has made it possible for U.S. companies to seek compensation from the Cuban government for assets they seized decades ago.

The United States Supreme Court has ruled that ExxonMobil can sue Cuban state-owned companies in US courts over the island’s assets that were confiscated after Fidel Castro took power.

The 6-3 decision on Tuesday was the second in as many months in favor of the US owners of Cuban lands seized by the Communist government 65 years ago.

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The outcome of these two cases could be an additional incentive for US President Donald Trump to pressure Cuba, which is already being pressured by a. US oil embargo.

The issue was whether the 1996 Helms-Burton law would remove the shield from lawsuits in US courts that often involve foreign countries and government enterprises. The judges reversed a lower court ruling that found that Cuban state-owned companies could not sue in US courts.

The court said that so-called foreign immunity, which bars US lawsuits against foreign governments and their subsidiaries, is not available in cases like the one ExxonMobil brought against the Cuban state-owned Corporacion CIMEX.

Conservative Justice Brett Kavanaugh, who wrote the ruling, wrote that the 30-year-old federal law removes “full protection for Cuban institutions and assets”.

“The Helms-Burton Act authorizes private suits against Cuban entities and assets — suits that would not be subject to the FSIA,” Kavanaugh wrote, referring to the Foreign Sovereign Immunities Act of 1976.

The 6 conservative judges of the court were the majority. Justice Elena Kagan wrote dissents that were joined by two other liberal members of the court.

Kagan said the plaintiffs must show that their suit was waived by the Foreign Sovereign Immunities Act, saying that “there is nothing in the text or the “structure” of the Helms-Burton Act that suggests Congress waived immunity for the defendants — much less that it did so expressly.

ExxonMobil is seeking compensation for the expropriation of assets by Standard Oil, ExxonMobil’s predecessor, including more than 100 properties and refineries.

Many cases

Last month, the court ruled on another case involving seized goods from Cuba, reviving the case of a US company operating in Havana against four cruise lines that brought tourists to Cuba during the period when relations were strained during the administration of former US President Barack Obama. This case opened up the same section of Helms-Burton, allowing lawsuits over confiscated property.

Congress passed the law in response to the 1996 downing of a civilian airliner piloted by people from Miami.

Title III of the law allows Americans to prosecute almost any company that deals in or profits from assets seized by the Cuban government.

Prior to Trump’s first administration, every president had suspended the project due to the opposition of US allies doing business in Cuba and the potential for future trade between the US and Cuba.

But Trump suspended the moratorium in 2019, and ExxonMobil filed a lawsuit the same day against CIMEX.

The US Foreign Claims Settlement Commission, which is an agency of the Department of Justice, said in 1969 that the value of ExxonMobil’s assets in Cuba is $ 71.6m, including 6 percent per year since 1960. This would be worth 3 billion dollars today, including triple damages.

In addition, the agency found that about 6,000 individuals and businesses had $1.9bn in cash, before adding interest or spending.