UPDATE 1-Exxon presses bid for compensation from Cuba at US Supreme Court

The justices heard arguments in two cases concerning the scope of a 1996 U.S. law called the Helms-Burton Act. That law's Title III provision ‌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. Exxon is seeking more than $1 billion in compensation from Cuban state-owned entities for the U.S. energy major's oil and gas assets confiscated by Cuba's government in 1960.

ExxonMobil argued at the U.S. Supreme Court on ‌Monday ​that it is entitled to compensation for property seized by the Cuban government in 1960, a case that inserts the justices into U.S.-Cuban relations at a particularly fraught moment. The justices heard arguments in two cases concerning the scope of a 1996 U.S. law called the Helms-Burton Act. That law's Title III provision ‌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.

Exxon is seeking more than $1 billion in compensation from Cuban state-owned entities for the U.S. energy major's oil and gas assets confiscated 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. Exxon, backed in the case by President Donald Trump's administration, has urged the court to eliminate barriers that claimants face in bringing potential lawsuits under the Helms-Burton ‌Act.

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. Morgan Ratner, a lawyer representing Exxon, said the lower court's decision was based on an "implausible" reading of the applicable provision in the Helms-Burton Act and would render it largely ineffective.

Curtis Gannon, a Justice Department lawyer, echoed that view. "The decision below would effectively negate suits that Congress authorized, thereby ⁠compromising a mechanism ​that Congress and the executive have concluded will promote ⁠U.S. interests and a transition to democracy to Cuba," Gannon told justices. "This court should reverse that decision."

Some of the nine justices appeared skeptical of that argument, but it was not clear how the court is likely to rule. "What you are asking us to ⁠do is to read the statute in a highly unusual way in order to abrogate sovereign immunity," Justice Elena Kagan told Gannon, adding: "Why would Congress have done that?"

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 state-owned ⁠conglomerate. Exxon accused CIMEX of continuing to hold and profit from the confiscated property.

Exxon's lawsuit was part of a flood of about 40 lawsuits filed under the Helms-Burton Act in 2019 and 2020. When it passed the Helms-Burton Act in 1996, Congress authorized the U.S. ⁠president ​to suspend Title III on national security grounds. 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.

Monday's arguments came at a time when the Trump 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. The other case involved an appeal by Havana Docks, a U.S. firm that built and maintained docks at ⁠the port in the Cuban capital. A federal judge ⁠ruled that the four cruise lines had unlawfully engaged in trafficking by using the terminal, and ordered them to pay a combined $440 million to Havana Docks.

But a federal appeals court threw out those judgments, finding 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 Supreme Court is expected to rule in the two cases by the end of June.

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