Cruisers to Cuba $400m shock

Cuba’s flagging economy has received another blow after a United States federal judge ordered four Florida-based cruise lines that sailed to the island to pay more than $400 million in damages to the American company that had the concession to some of the port piers in Havana.

The judge decided that the company, Havana Docks, had been unlawfully expropriated by Fidel Castro in 1960. This is the first ruling of its kind under a law that punishes “trafficking in stolen property” in Cuba. If the ruling is enforced this means a huge jolt to the Cuban economy as it deters cruise ships continuing to dock there.

The much-anticipated decision by Judge Beth Bloom on Friday follows another consequential ruling in March in which she concluded that Carnival, MSC SA, Royal Caribbean and Norwegian committed “trafficking acts” and engaged in “prohibited tourism” by taking US travellers to Cuba and using the Havana port facilities that Castro had confiscated.

The Cuban government never compensated Havana Docks, the American company with the legal rights to the facilities and whose property claim was certified by the US Justice Department’s Foreign Claims Settlement Commission.

The four cruise lines, which are registered outside the United States but keep their principal place of business in Florida, will have to pay Havana Docks $439 million in total plus attorney fees and costs, according to the ruling.

Each company was ordered to pay the amount of the original property claim plus decades of simple interest. But the figure is even higher because the law that punishes using confiscated property in Cuba, the 1996 Helms-Burton Act or Libertad Act, permits the court to triple the amount of the damages awarded.

“Defendants’ offenses in these cases have been established, and the Court found that Defendants derived significant amounts of revenue — in the hundreds of millions of dollars each — from their wrongful trafficking activities, and to Plaintiff’s detriment,” the judge wrote.

“A lower award as Defendants suggest would not effectively serve a deterrent purpose, since a lesser award could conceivably be considered merely a cost of doing business.” The key provision in the Helms-Burton Act that allows lawsuits against those using unlawfully confiscated property in Cuba, called Title III, was suspended by each president since Bill Clinton signed it until Donald Trump came to office.

Breaking with tradition, Trump enacted it in 2019, the catalyst for a flurry of lawsuits. Still, scepticism continued on whether the claimants, mostly the Cuban and American heirs of the expropriated companies in the 1960s, would be able to get through all the legal hurdles involved in these complicated cases and find sympathetic ears in court. All four companies are appealing the ruling.