Could Lose Treasure
By David L. Ganz
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
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
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
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 (Jos� 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
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
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
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
"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
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,"
Pizzo looked to precedent and saw the salvage of
"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
"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
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
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.