Scott – Action off Cartagena, 1708.

Yesterday, we posted about the lawsuits still ongoing related to the wreck of the Nuestra Senora de las Mercedes and quoted Cecilia Rodriguez, writing for Forbes.  Today Ms. Rodriguez has a wonderful article about the Galleon San Jose, often referred to as the “Holy Grail of Ship Wrecks.”  It is a tale of treachery, betrayal and deceit, and that refers to just the last 30 years of litigation.

In June of 1708, during the War of the Spanish Succession, a British squadron of four ships under the command of Captain Charles Wager attempted to capture a Spanish treasure fleet off Colombia, without much luck. Three Spanish warships and 14 merchant vessels sailed from Portobelo to Cartagena.  The largest warship, the San José carried 7 to 11 million pesos on board.  In an action with Wager’s squadron, the ship blew up, taking the pesos and most of its crew to the bottom. The treasure that sank is estimated to be worth today somewhere between $4 billion to $17 billion.

Almost three hundred years later, the wreck of the San José may have been found. Or perhaps not. We may never know. What did happen, as summarized by Letters Blogatory is that 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 it turns out, it doesn’t matter how the Colombia Constitutional Court came up with its ruling because the government of Colombia chose to ignore it.  Sea Search Armada subsequently sued in US court, but that case was thrown out on technical grounds.

And where does this leave the treasure of the San José?  On the bottom, where it sank over three hundred years ago.  Unlike the $500 million of treasure from the Nuestra Senora de las Mercedes, the loot from the San José has never been salvaged and there is some question over whether the ship was ever found or if it has been found whether the treasure is still there. Ms. Rodriguez ends her article with the comment:

No one apart from SSA has confirmed that the ship even exists. I count myself among the many Colombians who don’t believe it’s still there. Yet again, the stuff dreams are made of…

Whether or not the treasure is ever found, Fox News Latino comments on the larger impact of the endless litigation over the San José :

The ruling could also affect other commercial salvage companies eager to dive for more than 1,000 galleons and merchant ships believed to have sunk along Colombia’s coral reefs during more than three centuries of colonial rule. Almost none has been recovered because of the legal limbo in the San Jose case.