News

Colombia concedes US company owns share of sunken treasure

by Joey O'Gorman

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Locked in a 32-year legal battle over possibly the most valuable shipwreck ever discovered, the Colombian government Friday conceded that a United States salvage company is entitled to a 50% share.

Lawyers representing Colombia in Washington conceded that U.S. salvage company Sea Search Armada (SSA) was the rightful owner of half the proceeds of the San Jose treasure trove which could be worth as much as $17 billion.

“It was the first time they have ever admitted what the Colombian Constitutional Court ruled [in 1994],” SSA managing director Jack Harbeston told Colombia Reports.

The admission is the latest development in a saga which has been playing out since 1981 when, after extensive research, SSA sent a submarine to search for the shipwreck. They found the evidence they were looking for just off the coast of Cartagena, along Colombia’s Caribbean coast.

“We are 95% sure it is a wooden shipwreck down there,” Harbeston told Colombia Reports. “We are less sure it is the San Jose because we are not allowed to finish our expedition.”

The San Jose, which sunk in flames after being chased down by a British fleet in 1708, is estimated to have been carrying over two tons of platinum, along with a bounty of gold and emeralds collected in the South American colonies. The loot was on its way to King Philip V in Spain, to help finance his war against the British.

Originally SSA and Colombia had an agreement that the treasure would be split, but soon after the discovery the government drafted papers that offered the salvage company a meagre 5% finder’s fee.

“Their strategy was to declare that there was no property right, and they changed that right to a finder’s fee, which are legally very different things,” said the SSA managing director.

According to a 2011 statement from the Colombian embassy in Washington, the contract giving half the treasure to SSA “never existed.”

The salvors sued Colombia in 1994, and the Colombian Constitutional Court supported their claim, giving the company rights to 50% of the treasure.

However, according to SSA the Colombian government has “continued to deny” their right to half of the bounty, and repeatedly rejected the company’s attempts to bring it up.

“They refused every request we sent them, and when we said we were just going to go and finish the expedition, they threatened to intercept us with military force,” said Harbeston. “They said it was a matter of national sovereignty, and it was clear that they meant it.”

Friday’s admission came in oral arguments before the U.S. Court of Appeals where the company are currently appealing a 2011 decision by the U.S. Federal Court dismissing a lawsuit demanding Colombia pay $17 billion compensation. The case was thrown out because the three-year statute of limitations on unlawful events had passed.

According to Harbeston this was a mistake. “In fact, the most recent illegality of the GOC [government of Colombia] was June 2010, when it denied us access to our property in defiance of the Supreme Court ruling.”

The battle however, won’t end there.“The next step will be to prove that the government of Colombia’s actions are exempt from the U.S. law that says you can’t sue a foreign sovereignty. We will say they are exempt because they are not acting like a government but like a business,” said Harbeston.

Once the question of sovereign immunity has been settled, the company will seek a new judgement regarding compensation.

In 1980 the value of the treasure was estimated at between $3 and $10 billion. Because of the increased price of gold, the cache was valued at around $17 billion in 2010, and will be worth even more now according to Harbeston. SSA are aiming to sue the Colombian government for the value of the whole prize.

However it seems that the salvors may never see their long-awaited treasure in the flesh, according to the SSA director, who foresees the end of the debacle will be played out in court rather than a resumption of the expedition.

In fact, it is not certain that the shipwreck lying on the ocean floor off the coast of Cartagena, is even the San Jose and all its treasure.

“It isn’t anything that anyone I know would stake his life on, but it’s a good bet,” said Harbeston, who has already spent more than 30-years working on the assumption that it is the San Jose down there.

“I have no doubt that the government of Colombia believes it is the San Jose,” said the managing director. “Not only were they on our submarine when we went down, but they shadowed us on their own submarine and would radio every now and then to let us know we were being watched.”

Apart from this Harbeston said that the Colombian government signed a $1 million contract with U.S. treasure-hunter Tommy Thompson, and influential Colombian Fabio Echeverri, before the 1994 ruling, in an attempt to preempt the court’s decision in favor of SSA.

Their plan was “to take SSA’s property before the ruling by the civil court; hence, there was a last minute rush to send their expedition before the ruling.” According to Harbeston “the real purpose for the first expedition was to pretend to find nothing at the site, thereby disenfrachising SSA.”

Fortunately for the salvage company, the courts sequestered the site before the salvors could return with a real salvage expedition.

The company still have some weeks to wait before the judgement is made on their appeal. “Under the worst case scenario, the Appeals Court rules against us, and that’s the end of that case. But we would prepare a new case,” said the managing director.

One thing is certain, SSA won’t be giving up on the treasure-hunt any time soon. “You’d think after 30-something years they would realise we wouldn’t go away,” said Harbeston. “In any event, nothing that happens in U.S. courts will in any way affect our property rights to the San Jose…no court in the world can change that.”

Sources