Overview
First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. This month we cover two back‑to‑back Helms‑Burton cases argued in the Supreme Court on February 23. (Steptoe represents ExxonMobil in its Helms‑Burton case against CIMEX and Cupet, instrumentalities of the Cuban government.) We also summarize recent developments in Petersen v. Argentina, including a statement of interest filed by the United States opposing sanctions against a foreign sovereign.
A. Helms-Burton at the Supreme Court: Havana Docks v. Carnival & Exxon Mobil v. CIMEX
On February 23, the Supreme Court heard extended oral arguments in two, closely watched Helms‑Burton Act (Title III) cases: Havana Docks Corp. v. Carnival Corp. and Exxon Mobil Corp. v. CIMEX S.A. The arguments, held consecutively, drew sustained questioning across the bench and highlighted the court's active engagement with both the statutory‑interpretation issues and the sovereign‑immunity questions at issue. A decision in each case is expected by late June.
1. Havana Docks: When Does a Property Interest Expire for Title III Purposes?
Havana Docks centers on whether a Title III claim may proceed when the underlying property interest—a concession to operate the Havana Cruise Terminal—had expired years before the defendants' alleged "trafficking" (but not before the expropriation of that interest by the Cuban government). The Eleventh Circuit had vacated plaintiffs' verdict, holding that because the concession naturally terminated in 2004, no actionable property interest remained when the cruise line's alleged trafficking activity occurred more than a decade later.
During argument, several of the Justices—across ideological lines—pressed petitioner on this timing issue. Questions focused on whether Title III's reference to an ownership "claim" can survive past the natural expiration of the claimant's interest, and whether Congress contemplated that time‑limited concessions could support trafficking actions long after the rights themselves had lapsed. Several Justices noted the challenge of treating an expired concession as a still‑cognizable property interest under a statute enacted in 1996 but triggered in litigation decades later.
At the same time, some members of the court, including Justice Jackson, explored Helms‑Burton's broader policy aims—namely, exerting economic pressure on the Cuban government. That line of questioning examined whether denying relief to concession holders could undermine one of Title III's central deterrent purposes. The court appeared divided on how far statutory purpose can shape the statute's protection of an interest that has expired as a matter of domestic property law.
2. Exxon/CIMEX: Does Title III Abrogate Foreign Sovereign Immunity?
The second argument, Exxon Mobil v. CIMEX, addressed a foundational question: whether Title III's cause of action operates independently of the Foreign Sovereign Immunities Act (FSIA) when plaintiffs sue agencies or instrumentalities of a foreign state for trafficking in confiscated property. The DC Circuit held that plaintiffs must still satisfy FSIA exceptions. Exxon—supported by the United States—argues that the structure and text of Title III reflect Congress's decision to permit suits directly against foreign instrumentalities without separately meeting FSIA gateways.
The Deputy Solicitor General, arguing for the United States, faced pointed questioning from Justices Sotomayor, Kagan, and Jackson, who expressed skepticism that Congress clearly displaced the FSIA. Those Justices pressed the government on what degree of clarity is needed to "override" FSIA immunity and whether Title III's text suffices.
Conversely, Exxon's appeal to the statute's language and structure resonated with others on the court. Justices Gorsuch and Kavanaugh focused on the placement and breadth of Title III's cause of action, including its creation of liability specifically for agencies and instrumentalities—asking whether that language reflects Congress's intent to authorize suits that could otherwise be barred under FSIA immunity principles. Justice Barrett asked difficult questions of both sides, expressing concerns, on the one hand, that the statute's reach beyond Cuban agencies and instrumentalities to those in other countries might speak to whether its prohibition is sufficiently clear, and, on the other hand, that the statute's approach to sovereign immunity may simply reflect Congress's conclusion that Cuba and its instrumentalities were the most culpable and most properly subject to its provisions. Justice Alito (joined by Justice Gorsuch) engaged CIMEX's counsel in an extended colloquy about the extent to which a congressionally enacted cause of action must "negate" an existing one, apparently eliciting concessions from counsel that abrogation "maybe" can be found where less than 100% of possible claims are extinguished.
In sum, the court was highly engaged on both cases. On Havana Docks, the Justices' focus on the expiration of the concession suggests that the timing of property interests may become central to Title III jurisprudence. On Exxon, the court showed genuine interest in whether Title III constitutes a clear abrogation of the FSIA in these limited circumstances—which could reshape future FSIA cases. A decision in both cases is expected by the end of June.
B. Petersen v. Argentina Update, Including: United States Filing Statement of Interest on Sanctions and Contempt
In the Petersen v. Argentina litigation (which has been ongoing since 2015), plaintiffs collectively hold more than $16 billion in judgments from the Southern District of New York district court based on Argentina's 2012 expropriation of YPF. A number of appeals are currently pending before the Second Circuit. One of those appeals, addressing the amount of the judgment entered by the district court and whether the case should have been litigated in Argentina instead of New York, was argued in October of last year. Other appeals concerning enforcement issues (the judgment is unstayed) have been set for argument before the Second Circuit on April 16 of this year. Those enforcement issues include a district court order requiring Argentina to turn over its YPF shares, ongoing discovery about Argentina's other assets, alter‑ego allegations, and requests for discovery concerning "off-channel" communications such as WhatsApp and personal email correspondence of senior Argentine officials. In addition, several other judgment-enforcement issues concerning ongoing asset discovery are still pending before the district court.
In late February, the US government filed a detailed Statement of Interest before the district court, addressing plaintiffs' motions for sanctions and contempt concerning Argentina's compliance with post‑judgment discovery orders. The United States emphasized that although the Supreme Court's NML Capital decision permits broad post‑judgment discovery, that ruling does not eliminate relevance, burden, or comity limits. The Statement of Interest argues that discovery into personal communications of high‑ranking Argentine officials implicates significant foreign relations and reciprocity concerns—particularly when such communications relate to entities whose assets may ultimately be immune from execution under the FSIA.
Plaintiffs asked the court to preclude Argentina from contesting that certain state‑owned entities—including Banco de la Nación Argentina and YPF S.A.—are its alter egos. The United States argued that such a preclusion sanction would conflict with the FSIA framework and the Supreme Court's Bancec doctrine, which presumes the separate juridical status of state instrumentalities absent a factual showing of extensive control or fraud. Imposing an alter‑ego determination as a punitive measure, the United States noted, would sidestep Bancec.
Plaintiffs also sought civil contempt fines of at least $1 million per day. The United States opposed monetary contempt sanctions against a foreign sovereign, asserting such relief is generally unenforceable under the FSIA and inconsistent with international practice. The Statement of Interest noted that many foreign sovereign‑immunity regimes—including those in Canada, the United Kingdom, Israel, and Australia—bar monetary contempt sanctions against foreign states, and that reciprocal treatment poses concrete risks to US interests abroad.
In addition, in the turnover order appeal pending in the Second Circuit, last fall, the US government filed an amicus, arguing that the FSIA does not abrogate execution immunity as to sovereign property located outside of the United States, which if true means that the Petersen plaintiffs cannot get at those YPF shares located outside of the United States.
The United States' submission signals serious Executive Branch concern over the discovery path in the case and the potential remedies sought. While the Second Circuit's merits and enforcement appeals continue on an expedited track, the district court will now evaluate sanctions and contempt in light of the government's views. Evidentiary hearings on some issues are currently scheduled for April.
We will keep you posted each first Tuesday of the month.
