January 14, 2020 Practice Points

Libertad Act Found Inapplicable Against Norwegian Cruise Lines

Other plaintiffs may not have a similar issue and may yet be able to recover under this act.

By David Y. Loh

On January 7, 2020, in Havana Docks Corporation v. Norwegian Cruise Line Holdings, Ltd., Case No. 19-cv-23591, the U.S. District Court for the Southern District of Florida dismissed Havana Ports’ suit against Norwegian Cruise Line (NCL). In 1996, Title III of the Helms-Burton Act, also known as the Cuban Liberty and Democratic Solidarity or “Libertad” Act was signed into law. Both Republican and Democratic administrations refused to enforce the Libertad Act for fear of interfering with existing commercial operations with Cuba and especially since the Obama administration sought to normalize relations with Cuba. The Trump administration, however, announced in April 2019 that it would no longer stay the implementation of the Libertad Act.

U.S. companies and individuals are now free to pursue any other company which traded on their property in Cuba, which was wrongfully confiscated by the Cuban government after Castro took power. In response, Havana Docks filed separate suits against four shipping companies, MSC Cruises, Carnival Corp., Royal Caribbean and, of course, NCL, on the theory their cruise ships were regularly calling at a pier that was previously owned by Havana Docks. Under the Libertad Act, if Havana Docks can establish that these cruise lines were in fact trading on their property, which was wrongfully seized by the Castro government, then Havana Docks would be entitled to liquidated damages pursuant to the act.

It turns out that Havana Docks’ property interest in the dock was only a time-limited leasehold interest that expired in 2004. As a result, Havana Docks’ suit against MSC Cruises, Carnival, and now NCL have been dismissed. The suit against Royal Caribbean remains outstanding, but unless new facts emerge, we anticipate this suit will be dismissed as well.

In this case, the Libertad Act was unsuccessful because the plaintiff could not establish it continued to have an interest in the confiscated property. Other plaintiffs may not have a similar issue and may yet be able to recover under this act.

David Y. Loh is a partner with KMA Zuckert in New York City, New York.

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