USA increases pressure on Cuba: ExxonMobil gains right to sue Cuban oil companies over seized property

US oil giant ExxonMobil has won a key legal battle over compensation for property seized from the company by the Cuban government after the revolution. The US Supreme Court ruled that the company can sue Cuban state-owned companies in US courts. They still use property seized by Fidel Castro’s regime in 1960 after the revolution. ExxonMobil is seeking more than one billion dollars in damages.

More than sixty years ago, the Cuban government nationalized the property of Standard Oil, the predecessor of the company now known as ExxonMobil. It included refineries, oil terminals and gas stations, which still operate under the names of Cuban state-owned companies CUPET and CIMEX.

For decades, ExxonMobil had no way to challenge the seizure of its property in court. That changed in the 1990s with the passage of the so-called Helms-Burton Act, which allows lawsuits against Cuba. However, previous US presidents blocked the possibility of such lawsuits for diplomatic reasons, according to S&P Global. Donald Trump gave them the green light in 2019, and ExxonMobil immediately filed suit.

The Cuban companies had previously argued in lower US courts that, as foreign state entities, they were entitled to so-called sovereign immunity, meaning that US courts could not hear cases against them.

However, the US Supreme Court ruled the other way, by a vote of 6-3. According to Justice Brett Kavanaugh, it would make no sense for US lawmakers to pass a law allowing lawsuits if they could not then be heard at all because of immunity.

The ruling therefore opens the way for the company to seek compensation in US courts without having to wait for government commissions, although enforcing any judgment will be the key challenge. ExxonMobil would have to actively search for Cuban state accounts and commercial assets around the world, then persuade local courts in those countries to seize them.

The court’s decision further intensifies the pressure the US has recently been putting on Cuba. The US government is significantly tightening economic sanctions against Cuba, and the oil company CUPET was recently added to the blacklist over alleged financing of repression against the local population. The situation on the island is further aggravated by a sharp decline in fuel supplies from Venezuela, which have been crippled by US interventions.