ExxonMobil Sues Cuba for $280M Over Expropriated Property
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ExxonMobil on Friday sued Cuba's state-owned Cuba Petroleo and CIMEX Corp in U.S. federal court seeking $280 million over a refinery, gasoline stations and other assets seized after Fidel Castro’s revolution.
Exxon, the largest U.S. oil producer, is the first corporation to sue Cuba since the Trump administration allowed a long dormant section of the 1996 Cuban Liberty and Democratic Solidarity Act, known as the Helms-Burton Act after its sponsors, to take effect on May 2.
The Trump administration has been ratcheting up pressure on Venezuela and Cuba. Previous presidents had waived the provision of the act that allows anyone whose property was nationalized after the 1959 Cuban Revolution to sue any individual or company profiting from their former holdings.
Carnival Corp sued over ports
On Thursday two Cuban-Americans sued cruise operator Carnival for using Cuban ports nationalized from the family members who owned them.
ExxonMobil accuses the Cuban defendants of "unlawful trafficking in Plaintiff’s confiscated property in violation of Title III of the ... Cuban Liberty and Democratic Solidarity Act of 1996," according to the complaint filed in U.S. District Court for the District of Columbia.
The Standard Oil refinery at Havana Bay, now operated by CUPET, was the first U.S. property taken over by Castro and his bearded revolutionaries after the company refused to process oil from the Soviet Union as tensions mounted with the United States.
CIMEX operates gasoline stations in Cuba with CUPET. Standard Oil was broken up into several companies, one of which was Exxon, which merged with Mobil in a 1998 deal.
'This filing is significant'
In the 1960s the United States certified 5,913 claims against Cuba valued at $1.9 billion of which Standard Oil and Mobil each have a claim valued at a combined $245 million, according to the U.S.-Cuba Trade and Economic Council, a New York-based organization whose expertise includes U.S. claims.
"This filing is significant. This is the fifth-largest company in the world using Title III of the Libertad Act to sue a company owned by the government of Cuba," said John Kavulich, president of the 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 ExxonMobil and is consistent with ExxonMobil efforts to recover assets in Venezuela and defend themselves in other countries," he said.
Under a Cuban law passed in 1996 in response to the Helms-Burton Act, certified claimants who take advantage of the act will be disqualified from future settlements.
CUPET and CIMEX were not immediately available for comment. An ExxonMobil spokesman confirmed the suit is seeking to recover $280 million from expropriated assets.
Cuba charges Title III violates international law because its nationalization of property was legal and also because Cuban-Americans were not U.S. citizens when their properties were taken.
Other nations settle claims
All other nations settled their citizens' property claims decades ago. Certified U.S. claims by American citizens at the time of expropriation were never settled.
Canada, the European Union and other countries charge the United States has no jurisdiction over their citizens' activity in Cuba and they will take the issue to the World Trade Organization, among other actions.
International opposition, and the fear that thousands of suits brought by Cuban-Americans would clog U.S. courts, led previous U.S. presidents to waive implementation of Title III.
Title I and II of the Helms-Burton Act codify all previous sanctions into law and set conditions for the U.S. Congress to lift them. Title IV bans executives and their families from the United States if they profit from expropriated properties.
ExxonMobil Sues Cuba for $280M Over Expropriated Property
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