By Thom Weidlich Dec. 23 (Bloomberg) — A U.S. judge ruled that property Odyssey Marine Exploration Inc. recovered from a sunken ship codenamed “Black Swan” must be returned to Spain. U.S. District Judge Steven D. Merryday in Tampa, Florida, adopted the recommendation of a magistrate judge that backed Spain’s position concerning the treasure from the ship, whose full name is Nuestra Senora de las Mercedes. Merryday said Odyssey could maintain the property while it pursues any appeal. “The ineffable truth of this case is that the Mercedes is a naval vessel of Spain and that the wreck of this naval vessel, the vessel’s cargo and any human remains are the natural and legal patrimony of Spain,” Merryday wrote in an order yesterday. Odyssey, which searches for sunken treasure, said in May 2007 it recovered more than 17 tons (15,422 kilograms) of silver coins from the ship, which went down in the Atlantic Ocean off the Strait of Gibraltar. Spain contested the company’s claim to the wreck. Spain claims the ship is “a Spanish frigate that exploded in a pivotal 1804 engagement with the British and precipitated Spain’s declaration of war against Britain,” U.S. Magistrate Judge Mark A. Pizzo wrote in his report on June 4. Odyssey fell 9 cents, or 5.3 percent, to $1.40 in Nasdaq Stock Market trading at 10:09 a.m. New York time. The shares fell 57 percent this year. ‘Legal Issues’ “Judge Merryday’s ruling serves to move this case to the appellate court faster, where we feel confident that the legal issues are clearly in our favor,” Greg Stemm , Odyssey’s chief executive officer, said in a statement. “The ruling yesterday does not affect the current operations of Odyssey, and we have not been counting on any revenue from the ‘Black Swan’ in any of our budgets since it was clear that this case would go to appeal no matter which way the judge ruled.” Pizzo agreed with Spain that the U.S. lacks jurisdiction over the case and recommended that Merryday drop it and order the property returned to Spain. None of the exceptions Odyssey offered to a federal law applied, he said. The Foreign Sovereign Immunities Act grants immunity to a foreign state’s property in the U.S. from being taken. Odyssey General Counsel Melinda MacConnel said in the company statement that the ship isn’t entitled to sovereign immunity because it was “serving a well-documented commercial – -not military — purpose when she sank.” More than 70 percent of the coins never belonged to Spain, she said. Most of Odyssey’s shipwreck projects “don’t have the same potential legal issues” as the ‘Black Swan’ case, Stemm said in the statement. Merryday also adopted Pizzo’s finding that the U.S. can’t decide Peru’s claim against Spain to some of the treasure. Peru wasn’t an independent nation at the time of the wreck. The case is Odyssey Marine Exploration Inc. v. The Unidentified Shipwrecked Vessel, 07-cv-614, U.S. District Court, Middle District of Florida (Tampa). To contact the reporter on this story: Thom Weidlich in New York at tweidlich@bloomberg.net .
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Odyssey Marine Loses Bid for `Black Swan’ Treasure Against Spanish Claim
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