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Treasure hunters must return a $500M haul

An Atlanta appeals court upheld a lower-court decision ordering an undersea exploration company in Tampa, Fla., to turn over an estimated half-billion dollars in silver coins to Spain, which contends the treasure is from the wreck of a 19th century Spanish warship that is legally “immune” to the salvor’s claims.

Odyssey Marine Exploration co-founder Greg Stemm (left) and project manager Tom Dettweiler

A three-judge panel of the 11th U.S. Circuit Court of Appeals agreed with the findings of U.S. District Court in Tampa that the coins — 17 tons of them — most likely came from the Nuestra Señora de las Mercedes, which sank in October 1804 in a battle with a British naval squadron off Gibraltar.

Under the Foreign Sovereign Immunities Act, a warship remains the property of the nation it served unless its government says it doesn’t want it. Spain’s lead lawyer, James Goold, says his client has never said that about Mercedes or any of Spain’s other warships that sit on the bottom of the sea. “The decision is a complete victory for a principle that should never have been disputed,” he says in a statement. “The so-called ‘treasure’ that was taken by a U.S. company from a sunken warship of the Kingdom of Spain must be returned to Spain. The Spanish ship, the navy frigate Nuestra Señora de las Mercedes, was sunk in battle south of Portugal in 1804 and has a place in Spanish history that is comparable to the USS Arizona in Pearl Harbor.”
Odyssey Marine Exploration discovered the 594,000 silver coins in 2007 about 100 miles west of Gibraltar in the Atlantic. The coins and miscellaneous artifacts were spread over a swath of seabed three-and-a-half football fields long and 3,600 feet down. Odyssey argued that it had no certain vessel identification, though it suspected the ship might be Mercedes. Odyssey also maintained that even if the ship were the Mercedes, it was not serving as a warship when it sank, but had been impressed into commercial service, carrying mail and the personal fortunes of colonial Spaniards. As such, it should not be immune to salvage claims under the law.
“We are certainly disappointed by the Eleventh Circuit’s ruling,” Melinda MacConnel, Odyssey’s vice president and general counsel, says in a press release. “We believe the U.S. Constitution and all other applicable laws give jurisdiction to the U.S. courts to determine the rights of Odyssey, Spain and all other claimants in this case. Furthermore, we believe this ruling contradicts other Eleventh Circuit and Supreme Court opinions.”
Writing for the appeals court, Judge Susan Black agreed with Spain that the wreck’s location and the type of cargo it carried pretty clearly identified it as the Mercedes, and the historical record shows Mercedes was working as a warship when she sank. That would offer protection for the silver and other cargo it was carrying from the New World to Spain, operating with a naval crew and naval armament and carrying 2,000 copper and tin ingots for the Royal Treasury, which at the time was amassing funds to pay off debts to Spain’s French allies.
“The entirety of the record evidence supports the district court’s conclusion that the [wreck] is the Mercedes,” she writes. “The [wreck] was found within the zone Spain had plotted as the likeliest area of the Mercedes’ demise, and no other naval vessels matching the Mercedes’ type sank within that zone during the same time period. The site, essentially a scattered debris field, is consistent with a vessel that exploded at the surface.” Mercedes reportedly blew to pieces in the early minutes of the fighting.
She continues: “Moreover, the composition of the examined sampling of coins found … matches that of the 900,000 mostly silver coins aboard the Mercedes: Almost all the coins are silver; they were all minted in the late 18th and early 19th centuries, and none were minted later than 1804; and they were almost exclusively minted in Lima and Bolivia. The cannons, consisting of 6- and 12-pounders, match the type Mercedes would have carried.”
MacConnel says Odyssey will ask for a rehearing before the full appeals court — all 11 judges.
Odyssey clandestinely airlifted the 17 tons of coins from Gibraltar to a secret site in the Tampa area after raising the treasure. The salvor has maintained that in other sovereign immunity cases involving states rather than foreign countries sovereign immunity was not allowed unless the sovereign had possession of the recovered property. Right now, Odyssey has the treasure, not Spain.
The Mercedes case has drawn a slew of parties asserting an interest in the silver, including 24 descendants of Spanish colonials who reputedly had coins aboard the Mercedes when it sank, and the nation of Peru, which says its people have an interest in the silver because it was extracted from the country’s mines.
Soundings has written stories about the wreck, which Odyssey named the Black Swan, and treasure, as well as a profile of the company. Visit and search “black swan” in the archives.

Silver coins on the bottom

This article originally appeared in the December 2011 issue.