(Oil Price) – The U.S. Supreme Court will be hearing on Monday arguments by ExxonMobil, backed by the Trump Administration, about the scope of a law allowing American companies to claim damages for seized assets in Cuba.
U.S. supermajor Exxon is seeking compensation upwards of $1 billion for assets seized by the Cuban government in 1960. At the time of the confiscation of the assets, then belonging to subsidiaries owned by Standard Oil, they were worth $70 million.
However, Exxon wants $1 billion in the current claim because interest has accrued and there is potential of enhanced damages.
Legislation from 1996, the Cuban Liberty and Democratic Solidarity Act, also known as the Helms Burton Act, allows U.S. nationals to bring lawsuits in federal court against anyone who “traffics in property which was confiscated by the Cuban Government on or after January 1, 1959.”
Three U.S. Presidents since 1996 — Bill Clinton, George W. Bush and Barack Obama – suspended parts of the Helms-Burton Act to avoid diplomatic conflicts with allies like Canada and Spain whose companies have invested in Cuba. But President Trump lifted the suspension in 2019 during his first term in office.
Exxon sued three entities owned by the Cuban government in federal court in Washington, D.C., in 2019 under the Helms-Burton Act, contending that they violated the law by trafficking in confiscated property owned by Exxon.
A U.S. district court ruled in 2021 that Cuban state-owned entities facing Helms-Burton Act lawsuits can invoke the Foreign Sovereign Immunities Act, which generally bars lawsuits in U.S. courts against foreign governments and their “agenc[ies] and instrumentalit[ies].”
Exxon then turned to the Supreme Court to rule on the scope of the Helms-Burton Act and whether it trumps the Foreign Sovereign Immunities Act.
A Supreme Court ruling in favor of Exxon could open the door to other claims for compensation over the expropriation of assets in Cuba after 1959.
By Tsvetana Paraskova for Oilprice.com
