Treasure hunting Odyssey defeated again in court

For a third time, federal courts have sided with Spain in its dispute with ocean salvager Odyssey Marine Exploration Inc. over a half-billion dollars in gold and silver Odyssey discovered and brought from the ocean floor to Tampa.

The U.S. Court of Appeals in Atlanta on Wednesday decided that Tampa-based Odyssey had found a Spanish vessel on a military mission, and thus is not subject to any kind of common notion of "finder's keepers."

"You just can't go on a ship that belongs to another nation and strip it for valuables for sale to collectors," said James A. Goold, an attorney representing Spain in the matter. Goold has long argued such plunder would be akin to salvagers finding a sunken U.S. Navy vessel and stripping the dead captain of his wedding ring.

Odyssey Marine officials on Wednesday said they would appeal the ruling to the full panel of the federal court in Atlanta, one stop short of the U.S. Supreme Court.

The dispute with Spain started almost the moment Odyssey located a wreck it code-named the "Black Swan" off the Straights of Gibraltar in the summer of 2007 and shipped hundreds of buckets of coins from the seafloor to a secure warehouse in Florida.

Spanish authorities claim the wreck is the Mercedes, a military vessel traveling from Peru and sunk by British ships in 1804 off Spain, and thus remains the rightful property of the Spanish government. A federal magistrate and a federal judge in Tampa have previously agreed, despite Odyssey's claims of a legal salvage job.

To add more intrigue to the case, at one point in December last year, diplomatic cables revealed by WikiLeaks suggested the United States was secretly helping Spain in the legal tussle by providing customs documents that Odyssey had prepared regarding the treasure.

Among the reasons that a three-judge panel at the Atlanta court held for Spain this time was that foreign military vessels are immune from normal salvage rules.

"At the time it sank, the Mercedes was a Spanish Navy vessel," the court found, carrying among other things 900,000 silver pesos, 5,809 gold pesos and almost 2,000 copper and tin ingots – on a journey from South America to Europe, partly to pay off France amid a three-way tangle of war between Brittan, France and Spain.

"It was under the command of a Spanish Navy captain both when it left [South America] and when it was sunk," the court found. "It delayed its departure from Lima to comply with Spanish Navy orders to prepare for war with the British."

Plus, the court said, a 1902 "Treaty of Friendship and General Relations" between the United States and Spain "requires the United States to extend to Spanish shipwrecked vessels the same protection and immunities afforded to its own shipwrecked vessels in similar circumstances."

As with past courts, the court in Atlanta is ordering Odyssey to return the treasure to Spain, so the matter may turn on whether Odyssey is successful in holding off that order by appealing the case to a higher court.

Odyssey executives have long held that the case would surely reach the Supreme Court, and Tuesday they said they planned to appeal. For the time being, the treasure will stay in an Odyssey vault, executives say, as the case moves through the appeals process.

"While we were surprised by the ruling and are obviously not pleased with the opinion, there is no near- term economic impact on the company and our day-to-day business operations," said Odyssey President and COO Mark Gordon in a written statement. "Since the original adverse ruling in the 'Black Swan' case, we have developed numerous shipwreck projects and opportunities to move the company forward."

Several exploration projects were being done in cooperation with – not against – foreign governments, Gordon said, including "several recent projects which we expect to confirm very soon."