US appeals court sides with cruise lines in Havana docks suit
Cruise lines won most arguments on appeal in cases alleging they 'trafficked in stolen property' by using docks in Havana, Cuba.
October 22, 2024
The 11th Circuit Court of Appeals today ruled largely in favor of Carnival Corp., Royal Caribbean Group, Norwegian Cruise Line Holdings and MSC Cruises in long-running cases where a US national sought compensation for property — the Havana docks — confiscated by Cuba's communist government.
In a joint statement, MSC Cruises, NCLH and Royal Caribbean said: 'We are pleased with the appellate court’s decision and thank the court for its thorough consideration of the case.'
A Carnival Corp. spokesperson said: 'We pleased with the outcome and will not comment further on pending litigation.'
One of the first Title III lawsuits
The legal action, initially targeting Carnival, was one of the first filed under Title III of the Helms-Burton or Libertad Act. The Title III portion of this 1996 law had been suspended until 2019 when the Trump administration terminated the suspension, allowing for private lawsuits.
This closely followed the Trump administration's abrupt decision to halt cruises to Cuba from the US, which had operated for several years after the Obama administration sought greater engagement with Cuba.
'Straightforward analysis'
'The Circuit Court majority opinion in this 2-1 decision is a very straightforward analysis of the claim,' Robert Kritzman, partner, Watson Farley & Williams LLP, told Seatrade Cruise News.
'The Court notes that the property of Havana Docks confiscated by the Cuban government was the concession right to operate and profit from the docks for 99 years which was set to expire in 2004. The period the facilities were used by the cruise lines was 2016-2019. Havana Docks did not own the real property but had the concession right to operate and benefit from the port.'
Kritzman continued: 'The Court noted the confiscation of that right by the Cuban government probably violated international law but that was not the issue before the Court. The Court ruled that Havana Docks could not recover from a third party (the cruise lines) for use of property rights that would no longer exist regardless of the confiscation.
'In an atypical display of humor, the federal Court stated contractual rights could not be held for “infinity and beyond,” citing to Buzz Lightyear in "Toy Story." If Havana Docks had owned the real property that conclusion may have been different.'
Kritzman noted the dissenting judge and the lower Court took a different view and focused on the confiscation claim against the Cuban government which does not expire.
Key excerpts from today's decision
In the words of Chief Judge William Pryor of the 11th Circuit Court of Appeals:
'After a review of the record, and with the benefit of oral argument, we hold that Havana Docks’ limited property interest had expired, for purposes of Title III, at the time of the alleged trafficking by the cruise lines. We therefore set aside the judgments in favor of Havana Docks and remand for further proceedings as to its other claims against Carnival ...
'We affirm the district court’s ruling that Havana Docks is a US national under Title III of the Helms-Burton Act but reverse the judgments in favor of Havana Docks and against the cruise lines for conduct taking place between 2016 and 2019. We remand for further proceedings as to the trafficking claims against Carnival based on conduct taking place from 1996 to 2001.'
(The period refers to when Costa Cruises operated voyages from Havana, which ceased after Carnival completed its acquisition of Costa.)
Plaintiff seeks $439m plus legal fees
In 2022, after a District Court found cruise lines liable in the cases, Havana Docks sought total of $439.2m from the four cruise groups plus $10.7m in attorneys' fees and nearly $1m in expenses.
What's next
Havana Docks — if it does not accept the decision — could now seek a review by all 12 members of the 11th Circuit Court of Appeals or request a review of the appeals court decision by the US Supreme Court.
Thanks to John Kavulich, president of the US-Cuba Trade and Economic Council, who has helped keep Seatrade Cruise News apprised of developments in these legal cases
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CubaCarnival Corp. & plcRoyal Caribbean GroupNorwegian Cruise Line HoldingsMSC CruisesgovernmentUnited StatesAbout the Author
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