Odyssey
Could Lose Treasure By David L. Ganz,
Numismatic News
June 11, 2009
A
shipwrecked treasure of an estimated $500 million in Colonial
Spanish silver and gold coins should go to Spain, according
to a June 3 ruling by a Florida court.
The coins recovered by Odyssey Marine Exploration, a Tampa
salvage firm, from a ship identified as the Nuestra Senora
de Mercedes would be returned to the Spanish government of
King Juan Carlos if a decision by a U.S. Magistrate Court
judge in U.S. District Court in Tampa is not modified.
In the contentious case with a docket sheet containing hundreds
of documents, U.S. Magistrate Judge Mark A. Pizzo was assigned
by the court to review and analyze the claims and make a recommendation
to the U.S. District Court Judge Steven D. Merryday.
Pizzo made a recommendation that Merryday will have to clarify
and turn into an opinion and finally a judgment affecting
title to tons of gold and silver coinage that has been salvaged,
removed from the remote site and shipped to the United States.
Odyssey is a successful salver which presently has 15 different
salvage actions brought by "arresting" long-sunken
vessels pending in the U.S. District Court for the Central
District of Florida, headquartered in Tampa. The Mercedes
sank on Oct. 5, 1804, after a battle with the British navy
off the Straits of Gibraltar in international waters.
The sinking had dramatic consequences, killing over 250 sailors
in the Battle of Cape St. Mary's and causing Spain to declare
war against England and enter the Napoleonic Wars on the side
of France. Among the dead: the Mercedes ship's captain (José
Manuel Goycoa) and the family of Second Squadron Leader Diego
de Alvear. The manifest aboard showed a cargo departing from
Peru laden with nearly 600,000 silver and gold coins.
Odyssey Marine Exploration in 2006 listed the Mercedes with
30 other shipwrecks of interest that were suspected of meeting
their demise along a heavily traveled area.
In November 2006, Odyssey representatives met with an official
from Spain's Ministry of Culture seeking Spain's consent to
recover and sell artifacts from shipwrecks of historical or
cultural interest to Spain. Although the participants now
have different views about the meeting, all agree Spain failed
to give Odyssey explicit approval.
By March 2007, Odyssey discovered sunken objects in international
waters about 100 miles west of the Straits of Gibraltar at
a depth of approximately 3,300 feet. It recovered an artifact
(a small bronze block), symbolically deposited that item with
the Florida Court and on the basis of this asked for the "arrest
of the vessel."
Odyssey then went to court and demanded under the "law
of finds" possessory rights and ownership over the items
it has recovered and that remain at the salvage site. It alternatively
asked the court, under the "law of salvage," that
it be given "a liberal salvage award" for its services."
Challenges to the Florida court's authority, challenges to
Spain succeeding to the rights of Peru, and other more nuanced
legal overtures were reviewed by the court and are part of
the 34-page, 11,000-word decision, which at first blush appears
to turn treasure salver law on its ear.
"Two sovereigns and 25 descendants of those [who died]
aboard the Mercedes have filed claims against the" ship,
Pizzo began. Spain's position is straightforward, he says.
The underwater wreck "is unquestionably the remnants
of the Mercedes; Spain has not abandoned its sovereignty of
the vessel, particularly one of such historical significance."
His summary of the Spanish view: "under applicable treaties
and executive branch directives, Spain's warship should be
accorded the same respect as those of the United States; and
this court is without subject matter jurisdiction over the
res under" the Foreign Sovereignty Immunity Act.
Peru, he says, has a different agenda. "The Republic
of Peru, which did not exist as a sovereign in 1804, asserts
a "conditional claim" to "all of its property
and patrimony," namely that specie minted in or produced
from ore extracted from Peruvian territory. In sum, Peru argues
this court should "address the competing claims of Peru
and Spain before reaching the question of whether either or
both nations have sovereign immunity from the claims of Odyssey."
One of the many pieces of evidence that persuaded Pizzo that
this was the warship (or frigate) Mercedes was its numismatic
cargo.
"The Mercedes was loaded with approximately 900,000
coins from El Callao and Montevideo. The mix overwhelmingly
favored silver to gold; in fact, the Mercedes only carried
a few hundred gold coins," Pizzo wrote.
His summary of the salvaged contents of the vessel: "Coincidentally,
Odyssey recovered: approximately 594,000 coins; with an overwhelming
disparity of silver to gold; dating from the latter half of
the 18th century to no later than 1804; all of Spanish nationality;
and minted almost exclusively in the South American Spanish
Crown Colonies" and the mint in Lima in particular.
If this is truly a Spanish warship carrying Peruvian gold
and silver that was sunk by a British frigate off the coast
of Portugal, you are perhaps a tad confused as to why a U.S.
court in Tampa is administering the claims of the parties.
Pizzo has an answer to that.
"Since our nation's founding, federal courts sitting
in admiralty, and particularly when adjudicating salvage claims,
have applied the jus gentium, or the customary law of the
sea, the origins of which date back to the ancients,"
he wrote.
Pizzo looked to precedent and saw the salvage of the Titanic.
"Titanic cautions a court should wade carefully into
international waters to adjudicate a salvage claim, particularly
one that concerns a historical wreck with significant loss
of life. This admonition is even more appropriate when the
salver's claim implicates a foreign sovereign's patrimonial
interests and that sovereign's asserted independence from
suit" under the Foreign Sovereign Immunities Act.
Spain's argument that American courts should abstain from
handling the case was made under the 1976 Sovereign Immunities
Act passed by Congress, but its ultimate predicate is an 1812
case decided by Chief Justice John Marshall and studied by
those who practice international law - the Schooner Exchange
case.
"In 1976 Congress enacted the FSIA, in order to free
the government from the case-by-case diplomatic pressures,
to clarify the governing standards, and to assure litigants
that ... decisions are made on purely legal grounds and under
procedures that insure due process."
Marshall applied the doctrine to a case involving another
Napoleonic War vessel, and found that the courts of the United
States lacked jurisdiction over an armed ship of a foreign
state in a United States port.
Pizzo wrote, "Unquestionably, the Mercedes is the property
of Spain - constructed in 1788 by Navy Engineers in the shipyard
of the Spanish Navy in Havana, Cuba; commanded by officers
and crewed by sailors of the Royal Spanish Navy throughout
its service; and designated as a Spanish frigate of war."
He continues, "It remains on the Royal Navy's official
registry of ships." Then, he recites a series of treaties
and international conventions that he believes govern the
salvage of the treasure.
"The United States protects its sunken warships"
his analysis begins, citing an article in the first Geneva
Convention on the High Seas, Art. 8, done April 29, 1958,
("Warships on the high seas have complete immunity from
the jurisdiction of any State other than the flag State");
and a domestic law, the Sunken Military Craft Act of 2004.
It is emphatic: "[n]o salvage rights or awards shall
be granted with respect to - any foreign sunken military craft
located in United States waters without the express permission
of the relevant foreign state."
Peru's claims were swiftly dispatched, ultimately concluding
that the viceroyalty of Peru might have claims - but that
there was no jurisdiction to handle those claims, either,
because of sovereign immunity.
Pizzo concluded by saying that "More than 200 years
have passed since the Mercedes exploded. Her place of rest
and all those who perished with her that fateful day remained
undisturbed for the centuries - until recently. International
law recognizes the solemnity of their memorial, and Spain's
sovereign interests in preserving it.
"This court's adherence to those principles promotes
reciprocal respect for our nation's dead at sea - It is this
comity of interests and mutual respect among nations, whether
expressed as the jus gentium (an impetus to exercise judicial
authority) or as sovereign immunity (an impetus for refraining
from the exercise of judicial authority), that warrants granting
Spain's motions to vacate the Mercedes's arrest and to dismiss
Odyssey's amended complaint."
Thus, he made four recommendations to the district Court:
1. Spain's motion to dismiss and motion to vacate the arrest
warrant be granted.
2. Odyssey's amended complaint be dismissed and the warrant
of arrest (of the ship) be vacated.
3. All claims against the wreck be denied without prejudice.
4. Odyssey, as the substitute custodian, be directed to return
the [wreck] to Spain within 10 days or as mutually agreed.
A U.S district court judge will decide this together with
the salvage compensation Odyssey may be entitled to if the
recommendation is upheld - something Pizzo did not look at
because it would be premature.