The historic Cuban Electric Company (CEC) took legal action on July 29 by filing a lawsuit in the Federal District Court of Columbia against the Cuban Electric Union (UNE) and Energas S.A. The lawsuit seeks compensation amounting to approximately $802.7 million, accounting for treble damages and interest accumulated since 1960.
This legal move was initiated by Atlas Holdings under the authority of Title III of the Helms-Burton Act.
Understanding the Lawsuit's Financial Claims
The base figure of the claim is $267,568,413.62, an amount certified in 1970 by the United States Foreign Claims Settlement Commission (FCSC). This sum is supplemented by a 6% annual interest from August 6, 1960, when Fidel Castro's regime seized the company.
Title III of the Helms-Burton Act allows for the trebling of damages in certified claims, pushing the total sum—factoring in legal fees and court costs—to nearly $802.7 million.
The case, handled by the New York law firm Steptoe LLP, has been assigned to federal judge John D. Bates. This is the same firm that historically represented Exxon Mobil in a Supreme Court victory, affirming that Helms-Burton overrides sovereign immunity of Cuban entities.
Who Is Filing the Claim and Why?
Atlas Holdings, based in Greenwich, Connecticut, and owner of the Office Depot chain, acquired the certified claim of the CEC from the FCSC.
Founded in 1927 as a subsidiary of the U.S. based American & Foreign Power, the company once controlled over 90% of Cuba's electricity generation and Havana's manufactured gas system.
The complaint is explicit in its allegations: "In 1960, Fidel Castro's revolutionary regime illegally confiscated this property along with numerous other assets—valued collectively at over $300 million—from the claimant without just cause or compensation. As a direct result, the claimant was stripped of its investments, deprived of the use and value of its property, and forced to cease operations in Cuba."
The Defendants: UNE and Energas
The lawsuit identifies UNE as "a principal beneficiary of the confiscation," alleging it "owns, controls, manages, operates, and profits from numerous confiscated assets, including significant power generation facilities built on the claimant's installations, such as the Antonio Maceo (Renté) Thermoelectric Plant in Santiago de Cuba; the Carlos Manuel de Céspedes Thermoelectric Plant in Cienfuegos; the Melones electric substation and gas complex in Havana Bay, and the Guaso Hydroelectric Plant."
Regarding Energas, the claim states that this company "profits and traffics in the claimant’s confiscated property through its involvement in Cuba’s power generation and natural gas processing sectors."
It further asserts that Energas operations "rely on—and are physically integrated with—facilities, transmission infrastructure, and gas distribution assets confiscated from the Cuban Electric Company."
Energas is a joint venture involving UNE, the state oil company CUPET, and Canadian mining firm Sherritt International Corporation, which halted direct operations in Cuba this past May following an expansion of U.S. sanctions. Although Sherritt is not a direct defendant, the claim indirectly impacts the company.
Legal Context and Strategic Timing
Since the activation of Title III of the Helms-Burton Act in May 2019, at least 47 lawsuits have been filed in U.S. courts, with the Cuban government responding legally only in the Exxon Mobil case.
John Kavulich, President of the U.S.-Cuba Trade and Economic Council, explained to Café Fuerte the rationale behind the timing of the lawsuit. "The Cuban government has limited options to formulate a defense and is more likely to seek a settlement, especially given the risk that the lawsuit could negatively affect the purchase offer for Sherritt International Corporation, recently submitted by a Texas-based company," he told the outlet.
Kavulich also noted that Steptoe LLP has "an additional incentive to leverage its representation of both clients to achieve a settlement."
The FCSC has certified a total of 5,913 claims by U.S. citizens and companies against Cuba, valued at approximately $7 billion, suggesting that this lawsuit may be just one of many to reach federal courts soon.
Key Details About the Helms-Burton Lawsuit
What is the basis for the $802.7 million lawsuit against UNE and Energas?
The lawsuit is based on a certified claim of $267,568,413.62 from 1970 by the FCSC, with a 6% annual interest since 1960, and treble damages authorized under Title III of the Helms-Burton Act.
Who is behind the lawsuit against the Cuban entities?
Atlas Holdings, a company based in Greenwich, Connecticut, which owns Office Depot, is behind the lawsuit, having acquired the claim from the Cuban Electric Company.
How does Title III of the Helms-Burton Act impact claims against Cuba?
Title III allows for the filing of lawsuits in U.S. courts for claims against foreign entities that traffic in property confiscated by the Cuban government, enabling treble damages for certified claims.