Appeals Court Sets Aside $440M Havana Damages Award Against Cruise Lines
A U.S. Appeals Court announced its decision overturning a ruling by the U.S. District Court for the Southern District of Florida that had found four of the major cruise corporations liable for committing a “trafficking act” for using piers in Havana that had been confiscated from a U.S. company after the 1959 Communist Revolution. The lower court had awarded the Havana Docks Corporation $440 million in compensation from Carnival Corporation, MSC Cruises, Norwegian Cruise Line Holdings, and Royal Caribbean Group for the cruises the lines operated to Havana between 2016 and 2019.
At issue was a section of a U.S. law known as the Helms-Burton or the Libertad Act passed in 1996 that permitted U.S. corporations to seek compensation from companies profiting from the use of the confiscated property. The section known as Title III however had been suspended by presidential actions until 2019 when the suspension was removed as part of the moves by President Donald Trump against Cuba. He also bared travel and trade with Cuba.
The Havana Docks Corporation, a dormant company, filed its claims citing that in 1905 it received a 99-year concession for the docks that it built in Havana. The company operated the docks until they were seized by the Castro regime in 1960 and it has never been compensated for its loss.
The claim against the four cruise corporations was part of more than 40 Libertad Act Title III lawsuits filed since May 2019. Other corporations named in the individual actions included commercial shipping companies Maersk, MSC, Crowley Maritime, and Seaboard Marine, as well as large U.S. corporations Texaco and Marriott.
The District Court ruled at the end of 2022 that the four cruise lines had trafficked and benefitted from the property by docking their cruise ships at the piers and using the piers for the location of their shore excursions into Havana. The cruise lines made a series of arguments saying the Obama administration had granted waivers and that they were operating legal trips as well as citing the fact that the Havana Docks Corporation had management in the U.K. calling into question if it was a legitimate U.S.-controlled entity entitled to compensation under Title III.
In a majority 2 to 1 decision, the three-judge Appeals Court panel found that the 99-year concession would have expired in 2004 more than 12 years before the major of the cruises were operated. They believed there was no assurance that the concession would have been in effect at the time and dismissed the lower court’s award totaling $440 million. One justice however dissented saying the issue was not the existence of the claim but the value and saying the act did not provide for excluding a situation such as this where the concession expired after confiscation but without compensation.
The justices agreed that Havana Docks was harmed through the confiscation of the property, but that was not at issue in the case. They noted that had Havana Docks owned the docks instead of having a concession on the property, the decision would have been different. They however agreed with the lower court that it is a U.S. corporation and entitled to bring the claims.
The decision did not resolve another portion of the claim specifically against Carnival Corporation and Airtours and Costa which Carnival acquired in 2001. Before acquiring Costa, the Italian cruise line operated cruises from Cuba between 1996 and 2001 which were in the period covered by Havana Docks’ concession. Carnival and Havana Docks agreed that this portion should be remanded for further proceedings.
Havana Docks could also seek to appeal the three-judge panel’s decision to the full 11th Circuit Court of Appeals. It could also appeal the case to the U.S. Supreme Court.