Court Rejects Nicaragua’s Claim on Steel Firm

NEW YORK — The leftist Nicaragua government has no right to claim about $900,000 held in the United States for a Nicaraguan steel company that was confiscated by the Sandinistas, a federal appeals court has ruled.

The U.S. 2nd Circuit Court of Appeals ruled Tuesday that the money should be distributed to the company’s original shareholders, principally a family that fled Nicaragua in 1979, when the Sandinistas overthrew the government of dictator Anastasio Somoza.

The court rejected Nicaragua’s contention that the disputed money should be turned over to the present government.

Decision Unanimous

The unanimous decision by the three-judge panel was written by Judge Irving R. Kaufman, who emphasized that Nicaragua had seized the company without compensating the original owners.

Nicaragua is considering whether to appeal to the U.S. Supreme Court, said Michael Krinsky, a lawyer representing the Nicaraguan government.

In the ruling, the court noted that Industria Nacional de Clavos y Alambres de Puas, which produced and distributed steel products, was founded by Salvador Bandes. The Bandes family fled the country in June, 1979, the ruling noted. Shortly thereafter, the new Sandinista government took over the company.

The Bandes family sought a refund of $420,000 that the steel concern had paid to a Connecticut company for a shipment that was never completed. Harlow & Jones, the U.S. company, agreed to send the refund to the Bandes family. But the Nicaraguan government argued that since it now operates the company, it should get the refund instead. With interest, the disputed amount now totals about $900,000.

Tuesday’s decision affirmed a ruling early this year by U.S. District Judge Richard Owen, who said that the money should be distributed to the shareholders who owned the company before it was confiscated. Two former generals of the Somoza regime are among the other shareholders.