By Alejandra Garcia on April 4, 2023
Today Cuba won an important legal victory against a vulture fund that sought to take advantage of the Caribbean island. The High Court of England and Wales of London ruled that the vulture fund CRF I is not a creditor of the Cuban State, which means that the Republic of Cuba is out of the lawsuit filed by the fund in 2020 seeking to collect approximately US$80 million in sovereign debt from loans subscribed in the 1980s.
“The Republic of Cuba won the lawsuit in London: CRF is not a creditor of the Cuban State. Once again, the enemies of the nation failed. Their lies collided against a professional and prestigious court,” Cuban President Miguel Díaz-Canel wrote on his official Twitter account.
The Commercial of the High Court of London Sara Cockerill ruled that CRF I’s claim against the Banco Nacional de Cuba (BNC) for the recovery of that debt is valid, but not against the Cuban State.
This means that the lawsuit in London will continue only against the BNC, which was the Cuban Central Bank until the creation of the Central Bank of Cuba in 1997 and it managed the loans acquired in 1984 with the European banks Crédit Lyonnais Bank Nederland and the Italian Bank Institute to acquire those US$80 million.
The court ruling confirms that the irregularities committed by BNC officials, who were subject to criminal investigation first and to judicial sentence afterwards, were reasonable grounds for the Cuban government to withhold its consent to assign the debt in favor of CRF.
CRF, set up to invest in defaulted Cuban sovereign debt, has a bond portfolio that in 2017 amounted to $1.3 billion at today’s exchange rate, of which it has begun to reclaim a portion through the courts.
In this trial in London, Cockerill concluded that the BNC legitimately recognized in 2019 as a creditor to CRF -something that the BNC and Cuba disputed-, but it acted outside its capacities by assigning the State of Cuba as guarantor.
“This decision ratifies that CRF is a stranger to the financial instruments it claimed against Cuba and was not entitled to establish the claim in London. Therefore, the Republic of Cuba is immune from English jurisdiction and has no obligation to respond with its assets to this claim.
CRF sought to illegally acquire two Cuban debt securities at low prices, and to condition possible agreements with the BNC and the Republic of Cuba as the only option to avoid the lawsuit before the English jurisdiction.
With this maneuver, they intended to obtain a net profit that would range between 1,200 percent and 2,000 percent of the value they paid.
“Cuba won. The Cuban State never consented to the assignment of debt to the CRF vulture fund. We have the right to defend ourselves against those who seek to illegitimately appropriate Cuban patrimony,” Foreign Minister Bruno Rodriguez concluded.
Source: Resumen Latinoamericano – US