CUBA – MARITIME CLAIMS

Cuba has established with Canada extensive and prosperous commercial relations, to such an extent that Cuban ships appear regularly at Canadian ports. At least two liner services subsist between Eastern Canada and La Habana.

Simultaneously, at the global level, Cuban ships have stemmed bunkers in all the areas of the world, with the exception of the United States. In addition, Cuban ships have been repaired in various jurisdictions, including in Canada, and essential machinery spares have been purchased to enable its ships to navigate. Finally, Cuba has chartered various ships from Greek, Israeli and other shipowners.

Despite the American embargo, the famous Helms Burton legislation, and the Soviet pull out, Cuba has been able to survive at the commercial level, but in doing so, it has had to face enormous difficulties to fulfil its contractual obligations. It is worthwhile to recall that in most Latin American jurisdictions; merchant fleets have disappeared. Peru and Venezuela are blatant examples. In Cuba, on account of its internal needs, export and freight revenues are immediately allocated to social priorities, food and medicine. This means that freight revenues cannot be allocated to maintain and consolidate its ships and merchant fleet. This situation creates in various cases delays in payment and, in several instances, failure to pay when credit is extended by foreign shipowners, or bunker suppliers or ship repairers or other similar creditors.

On account of these difficulties, several structural changes have been witnessed in the last five to six years. Until 1995, entitles such as Cuflet Chartering and Empresa de Navegacion Mambisa have been transferred from the Ministry of Transport to the Ministry of Industrial Fishery and Merchant Marine. An entity named PESPORT was created to assume control of various Cuban fleets and connected maritime activity. During the year 1995, the jurisdiction of PESPORT was reduced to the management of the fishing fleets, and ANTARES (Asociación de Navieras de Cuba) was created to manage various merchant fleets. These changes, perhaps useful at internal levels, were troubling for creditors owed pending debts, as the usual lines of communication were discontinued, and others created, and the directors of former entities were replaced.

To add to the insecurity of creditors, Cuban vessels under the management of ANTARES were suddenly registered in flags of convenience jurisdictions. The fleet of the former Empresa de Navegacion Mambisa was substantially dismembered, and the majority of the ships, if not all, were registered in jurisdictions such as Belize, Malta and Cyprus. Thus, the fleets of ANTARES, such as FRIOMAR, POSEIDON, MAR AMERICA and PETROCOST were registered in flags of convenience jurisdictions.

Within this context, claims against Cuba are divided as follows:

1. Claims of bunker suppliers, engine parts suppliers.
2. Claims of shipowners.
3. Claims of cargo interests against Cuban ships.

In the case of claims by bunker and engine parts suppliers, the action in rem and sistership arrest have been used with considerable success. Thus, major English and German bunker suppliers have exercised these recourses and Cuba has invariably paid its debts. One particular English bunker supplier had a claim of more than £900,000, and after a sistership arrest at Bayside, New Brunswick, a payment schedule was agreed between the parties, and the debt inclusive of interest was paid in full. A Spanish corporation, supplier of engine parts, attempted to obtain payment from Cuba in Spain with the assistance of a total of five lawyers. The attempts in Spain were unsuccessful. The debt was presented in Canada, and a simple Notice for Caveat Release was filed against a Cuban vessel already arrested for another debt, and full payment was effected within fifteen days from the introduction of the Notice of Caveat Release.

The claims of shipowners are related to charter hire claims under Time Charters entered into between Empresa Cubana de Fletes (Cuflet) and Greek and other shipowners. After the withdrawal of the Soviet Union, Cuflet found itself with more than thirty specific cases where charter hire was due in favor of shipowners. These claims, usually in excess of US$1 Million each, have been generally resolved gradually with payment agreements.

Greek shipowners prior to 1992 had prospered from Cuflet charters, particularly in the sugar trade. However, after 1992, no payments of charter hire took place. The shipowners desperately sought arbitration awards in London, and demanded payment with the threat of seizures and Mareva Injunctions. The action in rem or sistership arrest could not be invoked as Cuflet was not an owner of ships. Apart from the Greek claims, there is today a large claim by Israeli shipowners which is presently being settled. Greek shipowners have attacked Cuban vessels, but Cuba has retaliated by seizing Greek vessels in Cuban waters. In the case of the M.V. MATHEW 1, the Greeks obtained an arbitration award against Cuflet, but Cuflet retaliated by seizing the M.V. MATHEW 1 for an alleged claim by Cuflet, as time charterer against the Greek shipowner. The vessel was laden with cargo insured by an American Underwriter, unknown to the Cubans. After considerable negotiation in Piraeus, Cuflet agreed to pay a settled amount through monthly instalments and the M.V. MATHEW 1 was released from the Cuban seizure, and the cargo was discharged in Central America, without a cargo loss, and thus without indemnification by American Underwriters.

Presently, close to 80% of the Cuflet claims have been settled. The balance 20% constitute claims where no agreement has been reached between the creditor and Cuflet, and various Cuban ships are presently seized in Spain, Morocco, South Africa and France to secure the judgments that will eventually emanate from these jurisdiction.

As far as claims of cargo interests against Cuban ships, Cuban ships are protected by P & I Clubs. The Cuban entity representing the P & I Clubs in La Habana is called ESICUBA. This latter settles cargo claims in the same manner as P & I Club correspondents in other jurisdictions.