As President Clinton decides whether to implement a new law allowing Americans to sue foreign companies that traffic in property seized in the 1960s by the Cuban government, lawyers are having a field day trying to decide what the legislation means for people like Kenneth M. Crosby and Alberto Diaz Masvidal.

In theory, both men should stand to benefit from the so-called Helms-Burton law, which sailed through Congress in March and was signed by Clinton on a wave of national anger at the downing by Cuba of two civilian aircraft. Both men fled Cuba after the revolution that brought Fidel Castro to power in 1959, leaving behind valuable property that was subsequently confiscated by the Cuban government.

But practice is another matter. One dispute is over whether the law might effectively dilute long-established legal claims by people like Crosby, who were American citizens when their property was expropriated. The law might do that, because it allows claims for the first time by people like Diaz Masvidal, who were Cubans in the 1960s but have become Americans.

It's uncertain how many Cuban Americans will try to take advantage of the law; estimates of the number of suits likely to be brought range from several dozen to tens of thousands.

What is not in dispute is that the deadlines set in the Republican-drafted legislation for Clinton to decide whether to waive the law were deliberately designed to put maximum political pressure on the president. He must decide by tonight, with the GOP-controlled Congress still in session, whether to invoke national security reasons for waiving the legislation's most controversial clauses. Otherwise, he has until mid-October, just three weeks before the election, to do so.

A waiver could antagonize Cuban American voters in Florida and New Jersey, key battlegrounds in the presidential campaign. If the president lets the sanction stand, however, he will alienate important U.S. allies such as Canada and some European countries, that fear the law could be used to penalize any foreign company doing business in Cuba.

The law, sponsored by Sen. Jesse Helms (R-N.C.) and Rep. Dan Burton (R-Ind.), is explicitly designed to put pressure on foreign investors to pull out of Cuba. In addition to allowing the private lawsuits, the law also requires the State Department to bar foreign executives from traveling in the United States if their corporations are using property in Cuba deemed to have been unlawfully confiscated from U.S. citizens.

The latter provision, already invoked against a Canadian mining firm, Sherritt International Corp., has aroused particular ire on the part of U.S. trading partners, who say it is illegal under international law.

The private lawsuit debate has underlined a long-standing rift between the two principal groups with property claims against Cuba. The first consists of 5,911 U.S. citizens and American corporations who had property in Cuba before the 1959 revolution. Crosby is a typical example. The Havana representative of Merrill Lynch, he abandoned a dream vacation home on the Isle of Pines after the revolution began taking on a xenophobic, anti-American flavor in early 1960.

"They sent word around to the Americans that the time had come to get out," said Crosby, who lives and works in the Washington area, recalling the execution of a close friend in the early 1960s. "We left practically all our possessions behind."

Crosby's claim of $61,000 is small compared with some big corporations like Colgate-Palmolive Co. and PepsiCo Inc., which lost millions of dollars worth of property in Cuba. But Crosby's claim is backed up by dozens of legal documents and officially registered with the Department of Justice. The cutoff date for filing certified claims was 1967. In order to be eligible, claimants had to be U.S. citizens at the time of the revolution.

This requirement effectively excluded a much larger group of potential claimants -- the hundreds of thousands of Cuban immigrants who fled the island after the revolution and have become naturalized U.S. citizens since 1959. Diaz Masvidal is a typical of these "uncertified" claimants. A wealthy Havana lawyer who became a U.S. citizen in 1970, he had extensive investments in the mining and copper industries. He values his expropriated property at between $2 million and $3 million.

Up until the passage of the Helms-Burton law, "uncertified" claimants like Diaz Masvidal had no way of using U.S. courts to seek restitution for their property. Now, the new law permits them to sue anybody trafficking in their property but obliges them to wait in line behind the "certified claimants" for two years. Some lawyers describe this distinction as unconstitutional, and believe that it could open the floodgates to a wave of legal cases by Cuban Americans.

"This law will enfranchise thousands of Cuban Americans to sue the Cuban government for restitution of their property," said Robert Muse, an attorney for the Amstar Sugar Co., which opposed the Helms-Burton legislation because it feared it would distract attention from the better-documented cases of the certified claimants. Muse predicts that there could be hundreds of thousands of potential lawsuits by Cuban Americans.

Supporters of Helms-Burton say this figure is wildly exaggerated. Robin Freer, general counsel of the Cuba-U.S. Business Council, said that Cuban Americans would probably be deterred from using the U.S. courts because of the difficulty of proving their claims and high legal costs. He also notes that the new law allows suits only by persons with claims of at least $50,000.

"There is no way that this is going to be more than a trickle. The spectacle of tens of thousands of lawsuits is a figment of the imagination," said Freer.

The Clinton administration initially opposed Helms-Burton because of concern at the way in which it drags companies in allied countries into property disputes between U.S. citizens and Cuba. An administration memorandum dated September 1995 warned that the act would diminish the prospects of the certified claimants for getting their property back, would be difficult to defend in international law, and would increase the litigation risks run by U.S. companies.

But the administration dropped its objections in March following the shooting down by Cuban fighter jets of two small planes belonging to a Miami-based Cuban emigre organization.

Most of the companies whose property has been expropriated by the Cuban government have sought to avoid being dragged into the controversy surrounding the Helms-Burton law, and refuse to comment on the case.

Even though the Helms-Burton law theoretically opens the way for them to bring cases against "agents" of the Cuban government, neither Crosby nor Diaz Masvidal expects to get any compensation for their expropriated property, at least in the short term. "In order to file a claim, I would have to be able to prove that someone was trafficking in my property," said Crosby, explaining that he does not know who occupies his property now. CAPTION: THE EXTENT OF THE CLAIMS American citizens have claimed that $1.8 billion -- not including interest -- of their property in Cuba was seized in the 1959 revolution, a value far greater than certified claims against any other country. Country

Claims

Settled in

For Cuba

$1.8 billion Unsettled East Germany $275 million 1992

$190 million Vietnam

$220 million 1995

$203 million China

$196 million 1979

$80 million Iran

$86 million

1990

$57 million Russia

$60 million

Unsettled SOURCE: Justice Department