Under Trump change, Cuba business partners can now be sued
Havana, Cuba

Carnival Corp. facing down lawsuits over disputed property in Cuba

MIAMI — Carnival Corp. is facing down lawsuits over disputed property in Cuba, however a lawyer familiar with the case says the suits likely won’t go far.

In 1958, Jose Ramon Lopez’s father owned Cuba’s main airport, its national airline and three small hotels. Conchita Beltran’s family had about 2,160 acres (874 hectares) of sugar and tobacco fields. And the families of Mickael Behn and Javier Garcia Bengochea had docks in Havana and Santiago de Cuba.

All properties were taken in Cuba’s socialist revolution.

The dispossessed families later moved to the United States and abandoned hope of compensation as Cuba and the U.S. severed relations and fought during decades of the Cold War.

But on Thursday, Behn and Garcia Bengochea filed what were believed to be the first lawsuits against European and American companies doing business on confiscated properties in Cuba – thanks to the Trump administration’s decision to activate a provision of the U.S. embargo on the island.

Known as Title III of the 1996 Helms-Burton Act, the section allows Americans, and Cubans who later became Americans, to sue almost any company deemed to be “trafficking” in property confiscated by Cuba’s government. Every president since the law’s passage has suspended Title III because of objections from U.S. allies doing business in Cuba and because of the potential effect on future negotiated settlements between the U.S. and Cuba.

The law contains exceptions for residential properties, properties worth less than $50,000 and properties linked to travel to Cuba deemed legal under U.S. law.

Its activation, however, could generate dozens or even hundreds of lawsuits, along with trade fights between the U.S. on one side and countries including Spain, France and Britain on the other.

Behn and Garcia Bengochea, who filed cases in federal court in Miami, are the heirs of families that owned ports which are now being used to dock cruise ships that began travelling to Cuba in 2016 under President Barack Obama’s detente with the island.

Behn’s grandfather, American William C. Behn, was president of the company Havana Docks, which owned three docks in the capital that were confiscated in 1960. Mickael Behn, a television executive who lives between Miami and London, says he is suing Carnival Cruise Corporation for up to three times the current value of the docks, as permitted under the law.

Bengochea, a neurosurgeon who lives in northeast Florida, owns 80 per cent of the shares of the confiscated Cuban company La Maritima, which operated the port of Santiago de Cuba. He is suing for up to $20 million.

“We want to get justice,” said Bob Martinez, the lawyer for both men. “This was a robbery and what we’re trying to get is compensation for the illegal use of these properties.”

But for George Fowler, an attorney who has advised Carnival on Cuban matters, the law provides an exception for companies that go to Cuba legally, like the cruise lines. For that reason, he said, the Helms-Burton law does not apply to them.

“I don’t think the lawsuits are going to go very far,” said Fowler, who also is vice-chairman of the Cuban-American National Foundation, a Cuban exile organization. “It is all about money,” he said after explaining that Carnival agrees with him.

During the Obama administration, the cruise companies were issued licenses by the Treasury Department to carry American passengers to Cuba.

Other potential major targets include Spanish hotel chains Melia and Iberostar, Pernod Ricard of France, and other U.S. cruise lines that dock at ports confiscated from U.S. residents.

Lawyers and potential plaintiffs say they expect only a trickle of lawsuits at first due to the expense and complexity of filing litigation under a law that is being put into effect for the first time and touches on issues of international trade and sovereignty.

Suing is also expensive, with initial filing fees of more than $6,500 a case, and there is the difficulty and expense of proving ownership with old Cuban documents.

For its part, Cuba fears it’s already lagging levels of foreign investment could be permanently crippled as a result of the activation of the provision. At a Cuban government-organized May Day parade Wednesday in Havana, marchers carried signs and chanted slogans denouncing the Helms-Burton law.

The law “was an effort to tie the hands of any president to improve relations with Cuba,” Carlos Fernandez de Cossio, Cuba’s director-general of U.S. affairs, told The Associated Press in Washington.

“No doubt that there will be a threatening effect that will inhibit some investors of going to Cuba. We cannot ignore that that will occur,” he said. “It will perhaps have an impact on the living standards, the living conditions, of common Cubans … It will damage perhaps the relationship of the United States and Cuba more than it is today.”

On Thursday, the European Union also said it could file a World Trade Organization lawsuit or levy its own sanctions against U.S. entities that sue under Title III.

“The EU sees the extraterritorial application of unilateral restrictive measures as violating international law, and will take all appropriate measures,” the EU said in a statement.

Others, however, celebrated the first lawsuits.

Orlando Gutierrez Boronat, from the exile group Cuban Democratic Directorate, said that the lawsuits have a clear message.

“Everyone who wants to invest in Cuba will have to go to federal court,” he said after a press conference in front of the downtown court where the suits were filed.

Beltran said her family had 860 acres (348 hectares) of sugar fields and 1,300 acres (526 hectares) of tobacco in western Pinar del Rio province. She has no idea if she will be able to sue a foreign corporation doing business related to her properties, but she is optimistic.

“God willing, I want to see restitution or compensation before I die,” said Beltran, 76, who fled to Miami in 1961. She said her husband died 35 years ago dreaming of some form of compensation for their loss.

“For me, justice is being done,” she said of the decision to activate the law.

The Justice Department has certified some 6,000 claims worth approximately $8 billion at current values. There are an additional 200,000 uncertified claims, many by Cuban-Americans, whose value could reach into the tens of billions of dollars.

One of the uncertified claims belongs to Lopez, whose family had owned the airport, airline Cubana de Aviacion and three hotels in Havana and the southern city of Cienfuegos since 1952. Along with the airlines Aeromexico, LATAM of Chile and Copa of Panama, Lopez said he is preparing documents to sue the Cuban government and Melia, which runs the Cienfuegos hotel.

He said he isn’t worried by the potential investment of time or money.

“At the end of the day they’re going to recognize that it’s ours,” said Lopez, a 65-year-old retiree who divides his time between Madrid and Miami. “The moment has finally come.”

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