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Wednesday, March 27, 2024 | Back issues
Courthouse News Service Courthouse News Service

Firm Loses Claim to $17B Shipwreck Dating to 1708

(CN) - Sea Search Armada missed the statute of limitations to sue the Republic of Colombia for reneging on rights to salvage up to $14 billion worth of booty from 300-year-old shipwreck, a federal judge ruled.

The British Navy sank the San Jose galleon in 1708, and the wreck rests 1,000 feet deep on the edge of the continental shelf.

"The complaint in this case reads like the marriage between a Patrick O'Brian glorious age-of-sail novel and a John Buchan potboiler of international intrigue," U.S. District Judge James Boasberg wrote Monday.

Sea Search, a Bellevue, Wa.-based salvage company, says Colombia gave it permission in 1984 to recover the coins and bullion owned by private Peruvian and European merchants that was on board the San Jose when it sunk. In exchange, Sea Search would allegedly get to keep a share of the valuables.

After Sea Search discovered and disclosed the location of the ship, however, Colombia weaseled out of the deal, and the Colombian Parliament enacted the so-called Seizure Law to claim all rights to the San Jose treasure, except for a 5 percent finder's fee subject to 45 percent tax.

Sea Search sued Colombia in 1989 saying the Seizure Law was retroactive and unconstitutional, and the Colombian courts, splitting the rights to the San Jose treasure equally between Sea Search and Colombia.

By December 2010, Sea Search filed a federal suit in Washington, D.C., saying that Colombia had refused to honor the 1994 ruling, which the Colombian Supreme Court upheld in 2007.

Colombia moved to dismiss the claims for lack of subject-matter jurisdiction, insufficient service of process and failure to state a claim.

"In particular, defendant argues that the first two counts are barred by the applicable statutes of limitations and that the remaining count is not cognizable under the District of Columbia's Uniform Foreign-Money Judgments Recognition Act," Boasberg wrote.

The judge took little stock in Sea Search's claim that Colombia's alleged breach of contract did not become apparent until after the 2007 ruling. "Using that as the accrual date, the three-year statute of limitations would have expired on July 5, 2010," Boasberg found. "Since that is more than 150 days before [Sea Search] filed its complaint with this court, plaintiff's claim would be time-barred even using Plaintiff's own accrual date."

Boasberg found Sea Search's conversion claim also exceed the statute of limitations.

"When a defendant acquires the property unlawfully in the first instance, as plaintiff alleges here, a conversion claim accrues immediately," Boasberg wrote.

"Since Colombia's first attempts to take full ownership of the San Jose site occurred in 1984, [Sea Search]'s conversion claim accrued at that time," he added. "The statute of limitations for the conversion claim, accordingly, expired in 1987. Since plaintiff did not file its conversion claim until 2010, it is similarly time-barred."

Sea Search also lost its bid to enforce a foreign judgment. "According to plaintiff's description, the Colombian court merely determined what percentage of recovered San Jose treasure Plaintiff owns; it did not order that [Sea Search] be paid a 'sum of money,'" the 11-page ruling states. "For a foreign judgment to be recognized under similarly worded Uniform Acts, courts have held that the sum of money awarded or denied must be specific."

"In this case, the Colombia Supreme Court did not award plaintiff a sum of money at all, much less a specific one," Boasberg added. "According to the complaint, the Colombia Supreme Court found 'that Colombia and [Sea Search] owned any treasures recovered from the San Jose site in equal shares.' This decision cannot be considered a money judgment; it simply decided how the San Jose treasure should be divided if and when it is excavated."

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