Objects from the Mercedes Wreck to be Returned to Spain

Images from an Odyssey Marine Press Release of the Coins

The costs of recovering objects from underwater sites is very high. As Andrew Lambert, a maritime historian says, “If you want to stand in a cold shower tearing up £50 notes, go shipwreck hunting . . . Most shipwrecks are rotting away, or carrying dull things—all the romance has been taken out of it.” Those working for Odyssey Marine may feel the same way this week.

The company has had its motion denied; the motion asked to stay last year’s decision in the 11th Circuit Federal Court of Appeals in Atlanta this week.

This means the thousands of silver and gold coins the company spirited up from the ocean floor in the North Atlantic, and flown to Florida—will now finally reach Spain. The company may decide to appeal the case to the United States Supreme Court, which would be an expensive and risky undertaking. So for now at least, Spain has prevailed. As the embedded video below reports, the coins may finally reach their ultimate destination—Spain—over 200 years after they first began their journey. The coins were minted in Peru and were sent around South America, before their vessel wrecked in the North Atlantic. The Spanish culture minister states in the video embedded below the jump that Spain is willing to return some of the coins to South America, which is the origin of many of those objects.

Odyssey Marine will not be going away any time soon however. Odyssey has it seems carefully timed an announcement that it reached an agreement with the UK Ministry of Defence and the Department for Culture, Media and Sport that will provide for, as Odyssey’s press release puts it “financing, archaeological survey and excavation, conservation and exhibit of HMS Victory (1744) and artifacts from the shipwreck site”.

HMS Victory in Portsmouth Harbour, 1828

So that site may provide objects, and Odyssey will receive “80% of the fair value” of most of the objects it may recover for the site. I’m not a marine archaeologist of course, and don’t know how well this agreement will preserve the archaeology of the site. On the one hand the wreck has been underwater for nearly two centuries, and the policy international legal instruments have taken is that that is the best place for them until they can be recovered. But on the other hand I’ve spoken to Odyssey employees that sites like this in the Atlantic are at risk due to commercial fishing, and other activities which disturb the site. And they have the pictures of scallop trawlers dragging through underwater sites. Yet is the answer to that destruction that we get these objects up quickly? Or should we mark these sites as marine preserves where commercial fishing cannot take place?

In the short term Odyssey has another wreck to attract investors, and buoy its stock price. This ‘stock treasure’, as one analyst argues, is the real treasure Odyssey is pursuing:

If the net recovery of Odyssey Marine is consistently negative, what exactly is its treasure? Like Mel Fisher, these folks want to chase the dream of finding the big score, with the romance of searching the unknown, and the possibility of becoming really famous (at least among wreck divers) and of getting on TV a few times to smile for Mom. Unlike Mel Fisher, these guys ahve figured out how not to get ruined doing it: Every time they run out of money, they ask you to refill their coffers. And that’s the real treasure of Odyssey Marine — they are chasing a romantic dream and being paid a nice salary to do so at the expense of investors who are unfamiliar with the outlandishly poor outlook for salvage operations.

Or as the New York Times breathlessly proclaims, this deal may be the ‘world’s richest shipwreck trove’. Perhaps, but not in the ways we might expect.

Background on Odyssey Marine here.

  1. Al Goodman, U.S. court backs Spain over $500M sea treasure, CNN, February 2, 2012, http://www.cnn.com/2012/02/01/world/europe/spain-u-s–treasure-dispute/index.html (last visited Feb 3, 2012).
  2. Brooke Bowman, Shipwreck hunters stumble across mysterious find – CNN.com, CNN, January 30, 2012, http://www.cnn.com/2012/01/28/world/europe/swedish-shipwreck-hunters/index.html (last visited Feb 3, 2012).
  3. William J. Broad, Deal to Salvage Britain’s Victory May Yield Richest Trove, The New York Times, February 1, 2012, http://www.nytimes.com/2012/02/02/science/wreck-of-british-ship-victory-may-yield-richest-trove.html (last visited Feb 3, 2012).

 

Questions or Comments? Email me at derek.fincham@gmail.com

11th Circuit Ruling Deals a Big Blow to Odyssey Marine

The explosion of the Nuestra Senora de las Mercedes

The 11th Circuit has ruled that the objects brought up from the wreck initially code-named the “Black Swan” should be released immediately to the custody of Spain. In response Odyssey’s stock is dropping rapidly.

In a press release Odyssey has said it will ask the full 11th Circuit to rehear the case en banc with the full complement of Federal Judges rather than the three judge panel which decided this appeal.

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Embassy Cables Discuss Odyssey Marine, and a Nazi era Dispute

So the World is buzzing with all the revelations, mundane and otherwise, offered by the release of diplomatic cables via wikileaks. This has touched all manner of foreign and diplomatic relations, even cultural property and heritage issues. The Guardian has reprinted and summarized a series of recent cables which detail meetings between US officials and Spanish officials between 2007 and 2010. The various positions and points of concern related here really don’t come as much of a surprise. What is perhaps heartening to note is the importance of these issues at the highest levels of international relations. Nations take these disputes very seriously.

It is certainly possible to over-emphasize the importance of these, but both parties certainly seem to have very different priorities. In a 2008 cable, Spanish Culture Minister Molina is concerned with the then-emerging dispute with Odyssey Marine, while the American Ambassador focuses on Spain’s dispute with Claude Cassirer. As the embassy cable summarized,

The Ambassador stressed the USG’s interest in direct discussions between the Spanish government and Claude Cassirer, the AmCit claimant of a painting by Camille Pisarro (“Rue St. Honore”) in the Thyssen Museum. The Ambassador noted also that while the Odyssey and Cassirer claim were on separate legal tracks, it was in both governments’ interest to avail themselves of whatever margin for manuever they had, consistent with their legal obligations, to resolve both matters in a way that favored the bilateral relationship. The minister listened carefully to the Ambassador’s message, but he put the accent on the separateness of the issues. Molina said that no Spanish government could return the painting (if this is what the claimant wants). To begin with, while the minister presides over the board that manages the Thyssen Museum’s collection, the minister could not oblige the board to return the painting without a (Spanish) legal judgment. The minister added that paying compensation, as the British government has reportedly done in a number of cases, also posed legal problems.

  1. Giles Tremlett, WikiLeaks cables: Art looted by Nazis, Spanish gold and an embassy offer, The Guardian, December 8, 2010, http://www.guardian.co.uk/world/2010/dec/08/wikileaks-us-spain-treasure-art (last visited Dec 9, 2010).
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Odyssey/Spain Dispute Headed to 11th Circuit Appeal

The dispute between Odyssey Marine Exploration and Spain over a shipwreck which was sunk in the early 19th Century will now likely be headed for appeal.  Federal District Court Judge Steven Merryday has issued an order that has adopted the Federal Magistrate’s Report and Recommendation.  In his order Judge Merryday stated a separate opinion would “add only length and neither depth nor clarity (and certainly not finality) to this dispute.”  Though this is a win for Spain, it also means the 11th circuit will now hear an appeal.   Back in the Spring, federal Magistrate Pizzo held the Federal District Court lacked jurisdiction over the dispute and the property should be returned to Spain. 


As I wrote then, though Odyssey Marine attempted to hide the true identity of the wreck, initially code-naming the wreck the Black Swan, there was enough information to conclude the coins came from the “Nuestra Senora de las Mercedes”, a warship which was carrying treasure back from Peru when it was sunk by the British off the Spanish coast in 1804. Spain, soon declared war on Great Britain, a point which may be lost in all this talk of the treasure. This treasure was an important piece of heritage, and all the talk of Odyssey’s share prices, and the rich treasure haul shouldn’t distract us from why these objects are protected, and why Spain fought so vigorously to have them declared the owner.This latest development then is not terribly surprising.  The case involves some complex issues of international admiralty law, and half a billion dollars in gold and silver coins.  It should be a fascinating appeal, as the 11th Circuit will set a precedent governing how these salvors can explore and remove historical objects from the ocean floor.

Odyssey Marine has a press release here.

James Thorner, Odyssey Marine’s treasure tangle with Spain moves to appeals court,  St. Petersburg Times, Dec. 23, 2009.

Richard Mullins, Sunken treasure case headed to federal appeals courtTampa Tribune, Dec. 23, 2009.  

Questions or Comments? Email me at derek.fincham@gmail.com

Odyssey Marine Salvage Award

One nation’s underwater looters are another nation’s excavators-for-hire.  Dow Jones Newswires is reporting that Odyssey Marine will receive a $160,000 award for recovering artifacts for the U.K. from the English Channel:

Odyssey Marine Exploration Inc. (OMEX) will receive a salvage award of $160,000 in a settlement with the U.K. government for artifacts recovered so far from a gunship wreck in the English Channel.The company – which uses advanced technology to comb the ocean’s depths for silver, gold and historical artifacts – also has filed a motion to vacate its admiralty arrest on the wreck in U.S. federal court. An admiralty arrest is a legal proceeding by which Odyssey seeks court recognition of its right to salvage a ship.Shares recently were up 14% at $2.33 in recent premarket trading. Still, that’s far below its all-time high of $8.32 a share in May 2007, shortly after a separate major discovery in the Atlantic Ocean, which led to a legal dispute with Spain. Shares lost two-thirds of their value in one day in June after Odyssey was recommended to return an estimated $500 million in sunken cargo. The case is still pending.The U.K. salvage award represents about 80% of the value of two cannon recovered from Admiral Balchin’s HMS Victory, a British Navy 100 gun ship lost in 1744 and submitted to the U.K. Receiver of Wreck. The company plans to contribute $75,000 of the award to support the National Museum of the Royal Navy.The company also will be involved in talks to determine approaches that should be adopted towards the wreck. Odyssey has booked losses in every year except one since it went public in 1997, but has loyal investors confident in its long-term prospects. The company generates revenue by selling artifacts and coins, from a partnership with the Discovery Channel and from leasing fees for traveling museum exhibits.  The HMS Victory is one of Odyssey’s significant finds and sank in a storm with 41 bronze cannons and other artifacts aboard.Odyssey in April had admiralty arrest on about a dozen sites.

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Spain Prevails For Now

“It is this comity of interests and mutual respect among nations . . . that warrants granting Spain’s motions to vacate the Mercedes‘s arrest and to dismiss Odyssey’s amended complaint”. So concludes US Magistrate Judge Mark Pizzo yesterday in Odyssey Marine Exploration, Inc. v. The Unidentified Shipwrecked Vessel.

Odyssey Marine has lost in its bid to petition a US court for ownership of the coins, and Spain has prevailed—for now—in its suit to regain half a million gold and silver coins from Odyssey Marine Exploration which recovered them from a wreck in the Atlantic Ocean. The recovery of the coins, thought to be worth as much as $500 million was announced, though the location of the wreck, and information about the wreck was kept secret. In response Spain filed suit, and seized some of Odyssey’s other vessels. UNESCO condemned the recovery, and much has been written and discussed about this recovery, considered perhaps the richest haul ever recovered from a wreck.

In the judgment which I’ve embedded below, the District Court held it lacked jurisdiction over the dispute and the property should be returned to Spain. Though Odyssey Marine attempted to hide the true identity of the wreck, initially code-naming the wreck the Black Swan, the court held that there was enough information to conclude the coins came from the “Nuestra Senora de las Mercedes”, a warship which was carrying treasure back from Peru when it was sunk by the British off the Spanish coast in 1804. Spain, soon declared war on Great Britain, a point which may be lost in all this talk of the treasure. This treasure was an important piece of heritage, and all the talk of Odyssey’s share prices, and the rich treasure haul shouldn’t distract us from why these objects are protected, and why Spain fought so vigorously to have them declared the owner.

So these coins may be destined for Spain, finally, even though these coins were initially taken from Peru, which also asserted an interest. This has been a protracted dispute, and one that may indeed continue at the appellate level. It will be interesting as well to see how much continued involvement Peru has with the appeals process, or if Spain and Peru can come to an agreement about what can or should be done with the objects.

Spain’s Culture Minister Angeles Gonzalez-Sinde is quoted by the BBC, calling the decision “a very important precedent for all future undersea discoveries”. Gregg Stemm, CEO of Odyssey Marine said “I’m confident that ultimately the judge or the appellate court will see the legal and evidentiary flaws in Spain’s claim, and we’ll be back to argue the merits of the case.”

But for now, US Magistrate Judge Mark Pizzo has the final word, concluding his recommendation, “More than two hundred years have passed since the Mercedes exploded. Her place of rest and all those who perished with her that fateful day remained undisturbed for centuries – until recently. International law recognizes the solemnity of their memorial, and Spain’s sovereign interests in preserving it.”

For more on the company this older piece from Voice of America is pretty interesting. This suit is really about the continued viability of this kind of business, and the perils of doing so without the support of organizations like UNESCO or other nations of origin:

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"We actually invited the Spanish government to send Archaeologists along."

So said Greg Stemm on the Today show last week discussing the ongoing dispute between Odyssey Marine and Spain. The interview was primarily an excercise in corporate self-promotion for the upcoming special on the sister network at 10 p.m. (ET) on Thursday, April 2, on the Discovery Channel’s “Treasure Quest.” Nonetheless there were some interesting comments made, though there was very little attention paid to archaeology or the importance of preservation of the site and the remains of the vessel.

The odd thing about this dispute and the Today segment in particular are the insistence on painting the controversy in terms of pirates and buried treasure and other romantic ideas. The reality of underwater heritage is far mor nuanced and important.

A few excerpts:

“The ship is the history and national patrimony of Spain, not a site that may be covertly stripped of valuables to sell to collectors. Odyssey was well aware that it is off limits,” said Spain’s American attorney in the case, James Goold.

Odyssey, a publicly held company that is a leader in deep-sea archaeology and treasure recovery, found the vast trove on a 2007 expedition in what it says are international waters off Portugal and the Straits of Gibraltar. The coins were spread over an area the size of several football fields at the bottom of the ocean.

After filling a chartered Boeing 757 with the coins and shipping them to Florida, Odyssey returned to the area to further investigate the site. There they were boarded by a Spanish warship, and the ship and crew were held for several days in a Spanish port.

Stemm concedes that the treasure may have been that carried by the Mercedes, but said that the identity of the vessel has not been established. One difficulty in doing that is that the Mercedes was hit in its powder magazine during the battle and blew up, leaving little actual wreckage at the bottom of the ocean.
Even if it was the Mercedes, Stemm said, that still does not automatically mean that Spain has sole claim to the treasure. Odyssey has argued in court that the Mercedes was carrying the treasure under contract with the merchants who owned it, and as such was acting as a merchant ship and not a warship.

“The Mercedes, if it was the Mercedes, was carrying a merchant cargo,” Stemm said. “While governments can take a sovereign immune warship and say that nobody can salvage it, they can’t say that you can’t salvage goods on behalf of merchants. In fact, we have the descendants of a lot of the merchants that had goods aboard the Mercedes that have come into court and said, ‘We think Odyssey should salvage these goods for us.’ ”

“And remember, there is not even a shipwreck there,” Stemm added. “This is like several football fields of just coins, scattered out over the bottom.”
Stemm says that the original expedition was to an area where his company believed a number of ships had sunk over the years. He said Odyssey notified the Spanish government of its intentions to search the area.

“When we went out to look in this general area, we thought there might be some Spanish shipwrecks,” he told Curry. “We actually invited the Spanish government to send archaeologists along. They just never got back to us.”

Goold has told other news outlets that Spain did respond to the invitation, telling Stemm, “Sunken ships are cultural heritage. Spain does not do commercial deals. It’s national patrimony.”


Questions or Comments? Email me at derek.fincham@gmail.com