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First court sentence conviction by a US court related to Title III of the Helms-Burton Act

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First court sentence conviction by a US court related to Title III of the Helms-Burton Act

On December 30th 2022, the Southern District Court of the State of Florida (hereinafter, "the Court"), issued its decision in the lawsuit filed by Havana Docks Corporation (hereinafter, "Plaintiff"), against the cruise companies: Carnival Corporation, Royal Caribbean Cruises, Ltd, Norwegian Cruise Line Holdings, Ltd. and MSC Cruises SA/MSC Cruises SA Co./MSC Cruises (USA) Inc. (hereinafter "the Defendants"), claiming damages arising from the application of Title III of the Helms-Burton Act (hereinafter "HBA" or "the Act").

These proceedings were initiated by the Plaintiff against the Defendants for the use of the cruise ship terminal in the port of Havana, which the Plaintiff built and managed until the Cuban government confiscated them in 1960.

The Plaintiff's application sought to have the Court define the amount to be paid by the Defendants, based on the amount of its claim certified by the Foreign Claims Settlement Commission ("FCSC") for US$9,179,700.88.

Previously, in March 2022, the Court had already decided that the use of the cruise ship terminal in question constituted "trafficking" in the property confiscated under Title III of the HBA.

Let us remember that Title III of the HBA, activated in 2019 by the Donald Trump administration, allows US nationals to sue any person who knowingly and intentionally traffics in property that was confiscated by the Cuban government on or after 1st January 1959 to which he or she has any rights. The definition of "trafficking" includes the purchase, receipt, possession, control, management, use or holding of an interest in confiscated property without the owner's consent. It also includes engaging in commercial activities that use or benefit in any way from confiscated property without the owner's consent.

Pursuant to that decision, the Court gave judgment by separate order against each of the Defendants, quantifying the damages that each of them should satisfy and rejecting the Defendants' arguments to try to reduce the amount to be paid and argued: "a lower award, as suggested by the Defendants, would not effectively serve a deterrent purpose, as a lower award could possibly be seen simply as a cost of doing business". It therefore found that "a compensation of just over $100 million per Defendant is certainly reasonable".

The Court determined the damages figure by adding to the amount certified by the FCSC, the amounts resulting from the interest applicable to each week between the date of seizure and the date on which Plaintiff filed each of the claims against each of the Defendants. This figure was tripled under Section 302 of Title III of the HBA because the Defendants continued to deal in the forfeited property after 30 days of service of process, as required by the Act itself. To this figure are added attorneys' fees and the costs of the proceedings.

Therefore, the Court defines the damages to be paid by each of the Defendants as the following figures:

  • Carnival Corporation: $109,671,180.90
  • Royal Caribbean Cruises, Ltd.: $109,848,747.87
  • Norwegian Cruise Line Holdings, Ltd.: $109.848.747.87
  • MSC Cruises SA/MSC Cruises SA Co./MSC Cruises (USA) Inc.: $109,848,747.87                                                                                                             

Although the judgment is subject to appeal by the Defendants, and indeed Carnival Corporation and Royal Caribbean Cruises, Ltd. have already announced that they will appeal it, it constitutes an important milestone and precedent in the application of Title III of the Helms-Burton Act.

You can download the full PDF file here.

For more information you may contact with:

Ignacio Aparicio | Partner Corporate / M&A 
ignacio.aparicio@es.Andersen.com

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