Case of the Day: Sea Search Armada v. Colombia

A Spanish GalleonAargh! We return today to Sea Search Armada v. Republic of Columbia, a case I first covered in October 2011. Here was my description of the facts:

According to the complaint, Sea Search Armada had an agreement with the government of Colombia for salvage of the treasure of the San Jose,a Spanish ship carrying $4 to $17 billion of coins and bullion. In 1708, when Britain really ruled the waves, the British navy sank the San Jose, and the ship came to rest off the coast of what is now Colombia. In 1980, the Colombian government authorized the Glocca Mora Co. to explore the continental shelf for shipwrecks, and the next year GMC discovered the wreck of the San Jose. GMC and Colombia agreed that GMC would be entitled to receive 35% of the treasure recovered. GMC assigned its rights to Sea Search Armada, and in 1984, Colombia agreed that SSA would be entitled to GMC’s 35% share, but it refused to enter a written contract with SSA and refused SSA permission to conduct full salvage operations at the shipwreck site. The Colombia parliament then passed a law giving the state the right to all of the treasure, leaving SSA with a 5% finder’s fee, which was to be taxed at 45% to boot!

SSA sued Colombia in its own courts in 1989. The Colombia Constitutional Court struck down the law at issue as unconstitutional in 1994. Later, the Circuit Court of Baranquilla held that SSA and Colombia each owned 50% of the San Jose treasure, although the source of the 50% figure is mysterious given that the original agreement called for a 65/35 split.

As we saw in the earlier post, SSA sued Colombia for recognition and enforcement of the Colombian judgment in the District of Columbia in 2010. SSA also sought damages in the amount of $17 billion. The judge dismissed the claim for recognition and enforcement on the grounds that the Colombian judgment was not one for damages but was merely declaratory and thus was not entitled to recognition UFMJRA, 1 which as its name suggests deals only with money judgments. 2

The DC Circuit has now summarily affirmed, just two weeks after oral argument. It adopted the district court’s reasoning in full.

The statute of limitations analysis seems correct. The courts are also correct to conclude that there is no claim here under the UFMJRA, but I still do not understand why there might not be an action for recognition of the Colombian judgment at common law rather than under the statute. Neither the UFMJRA nor the UFCMJRA precludes recognition of judgments not within the scope of the statute. See, e.g., DC Code § 15-371 (” This subchapter does not prevent the recognition under principles of comity or otherwise of a foreign-country judgment not within the scope of this subchapter”). But unfortunately, SSA’s brief does not really make this point, or does not make it clearly, 3 and so it is perhaps not surprising that the court missed it.

The case is not over: SSA has filed a petition against Colombia with the Inter-American Commission on Human Rights, alleging violations of Articles 21 and 25 of the Inter-American Convention on Human Rights.

Photo credit: Yellow Cat

Notes:

  1. In 2011, the District of Columbia adopted the UFCMJRA.
  2. The judge also dismissed the common law claims for conversion and breach of contract on statute of limitations grounds—a point I didn’t cover in my prior post.
  3. The brief seems to argue that the judgment is a money judgment, but then it says: “In any case the principle of comity requires that the District Court enforce the Colombian decision.” Is this an argument that the judgment should be recognized even if it is not within the scope of the statute? It’s hard to say—the very next sentence is: ” The Uniform Enforcement of Money Judgments Act is a codification of common laws of comity.” As far as I can tell, SSA did not cite the savings provision of the Act.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

2 thoughts on “Case of the Day: Sea Search Armada v. Colombia

  1. IJA member Jie Huang points to a 2009 ICSID decision in Malaysian Historical Salvors v. Malaysia, holding that ICSID had jurisdiction to consider the salvor’s claim against the Malaysian government under the UK/Malaysia bilateral investment treaty on facts similar to the facts in our case. She suggests that since the United States has a BIT with Colombia, Sea Search Armada might have a claim under the investment treaty—though she notes that in the Malaysian case it’s not clear what happened once the tribunal reached the merits. She also points to her forthcoming paper in Ocean and Coastal Management on “Chasing provenance: Legal dilemmas for protecting states with a verifiable link to underwater culture heritage.” She points out that Spain, as well as Colombia, has a claim to the San Jose and that the question of title to underwater cultural heritage is a tricky topic.

    Thanks, Jie, for commenting on these issues!

  2. Sea Search Armada has commenced another action against Colombia in the District of Columbia, alleging tortious intererence with its contracts with salvage contractors. I was quite surprised by this for what should be obvious reasons. I know that SSA has a view about why its new claims can proceed, but this seems to me to be plainly within the doctrine of bar, see Restatement (Second) of Judgments § 19. It’s true that the new cause of action was not in the first complaint, but the doctrine of bar does not permit claim splitting:

    “When a valid and final judgment rendered in an action extinguishes the plaintiff’s claim pursuant to the rules of merger or bar …, the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.”

    Restatement (Second) of Judgments § 24. I’m just saying.

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