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Florida judge acknowledges "trafficking" of Havana port cruise terminal by cruise companies
| Publications | Cuban Desk
The decision of Judge Beth Bloom of the Southern District Court of Florida corresponds to a summary proceeding that is part of the appeals filed by all parties involved in the proceedings initiated by Havana Docks Corporation against Carnival, MSC, Norwegian and Royal Caribbean, for violation of Title III of the HBA.
Havana Docks Corporation sued the cruise companies on the grounds that they were trafficking in the Havana cruise terminal between 2016 and 2019. The plaintiff claims to have a Foreign Claims Settlement Commission (FCSC) Certified Claim No. CU-2492, which acknowledges that the Cuban government had granted it a 99-year concession for the use, improvement, construction, operation and management of the terminal, which was in operation until it was confiscated by the Cuban authorities in 1960.
Let us remember that Title III of the HBA allows US nationals to sue any person who knowingly and intentionally traffics in property that was confiscated by the Cuban government after Castro's revolution. 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.
In addition to having to prove trafficking in the confiscated property, the HBA requires several conditions to be met for the exercise of a claim under Title III, including: (1) The claimant must be a citizen of the United States; (2) The amount of Damages shall be the greater of: (i) the value of the claim already certified by the FCSC, plus interest; (ii) the amount determined by experts to be appointed by the court if the claim was not certified, plus interest; (iii) or the current market price or its value at the time it was seized, plus interest. The law provides for an increase of three times the amount chosen if the defendant entity continues to deal in the confiscated property; (3) The court shall accept as conclusive evidence of ownership the certification made by the FCSC.
The judge's decision, issued on 21st March 2022, dismissed the various motions filed by each of the shipping lines to dismiss a claim for damages. Therefore, the case will continue with a jury trial to be held in May, in which financial compensation to the defendant is to be determined.
Havana Docks' arguments were that: (1) The Cuban Government seized its property; (2) It is the owner of a Certified Claim; (3) It acquired title to that claim before the legal date; (4) It is a national of the United States; (5) The defendants knowingly and intentionally trafficked in the seized property; (6) The trafficking occurred after November 1st 1996.
The referenced FCSC Certified Complaint acknowledges, inter alia, that: (i) Havana Docks was a national of the United States; (ii) The Cuban Government renewed a concession to it for the construction and operation of docks and warehouses in the port of Havana; (iii) As a result of the Cuban Government's actions it suffered a loss of USD 9,179,700.88, plus six percent annual interest from the date of the loss.
The motions filed by each of the defendants in the damages proceedings were supported by the following grounds:
(1) Havana Docks did not own the terminal, but had only a limited non-exclusive right to operate a cargo business in which the defendants did not and could not traffic;
(2) Defendants' cruise ship voyages to Cuba fall within the lawful voyage exception;
(3) Havana Docks lacks standing because it is not a national of the United States; and
(4) Havana Docks' interpretation of Title III violates the United States Constitution in several ways.
Despite the arguments developed by the shipping companies, the main conclusions of Judge Beth Bloom to dismiss the various motions can be summarised as follows:
1) That the shipping companies made use of the expropriated terminal for tourism purposes, in exchange for economic returns, and therefore committed acts of trafficking according to the HBA.
2) The fact that the defendants had knowledge of the HBA since 1996, and that they may have had knowledge of the FCSC Certified Claim, means that their actions qualify as "knowingly and intentionally" under the HBA, as they continued to use the said terminal until May and June 2019.
The big question on everyone's mind is whether the judges of the Florida court will take into account the reasoning of Judge Beth Bloom as to whether or not there was trafficking on the part of the shipping companies under Title III of the HBA in the trial that will begin next May.
You can download the full PDF file here.
For more information you may contact with:
Ignacio Aparicio | Socio Mercantil / M&A
ignacio.aparicio@es.Andersen.com
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