Arbitration

Before the end of the year, Colombia must present to the Permanent Court of Arbitration, based in The Hague, its response – the last one before the start of the hearings – to a lawsuit filed by the American company Sea Search Armada, which claims a part of the treasure of the shipwrecked galleon Saint Joseph. The company intends to keep about 10 billion dollars or around four trillion pesos, half of the estimated value of the loot. Faced with such a requirement, the State’s National Legal Defense Agency (Andje) has chosen this month two international firms for the new phase of the litigation with which it seeks to defend the assets of Colombians.

The strategy for state defense is based, above all, on a premise: that the location advocated by the North American company as the site of the galleon wreck is erroneous. “The procedure [del arbitraje actual] It has nothing to do with the galleon,” says César Palomino, director of Andje, in an interview with this newspaper in his office in Bogotá. For the Agency, therefore, the claim of Sea Search Armada—a “treasure hunter” company, in Palomino’s words—has no basis whatsoever.

This perspective that the State will defend before the Court in The Hague invokes the announcement made by the then president of Colombia, Juan Manuel Santos, in 2015, when he declared the discovery of the ship – sunk by the English with cannon fire in the Battle of Barú in 1708. —, near the coast of Cartagena de Indias, in a location different from that claimed by Sea Search. “This is the most valuable treasure that has been found in the history of humanity,” said the then president. Its coordinates are kept as a state secret, to prevent underwater pirates from stealing the treasure, or part of it. Palomino maintains that the main duty of the defense will be to prove “that it is physically impossible” that the wreck discovered by the plaintiff company is related to the vessel in dispute.

In written submissions to the Court, Sea Search alleges that the 2015 discovery, commanded by the Colombian Institute of Anthropology and History with the collaboration of the Colombian Navy and a group of international scientists, is part of the same debris field as the company. identified in the 1980s. For Palomino, the coordinates presented by Sea Search are “very generic” and do not correspond to those presented by the Santos Government.

Arbitration is “the most valuable thing that Colombia has at the moment,” Palomino acknowledges, which is why he underlines the importance of having a team of lawyers with “extensive knowledge” of the controversy. For this, the firms Gaillard Banifatemi Shelbaya Disputes (GBS Disputes) were chosen in association with the firm Xtrategy, after a rigorous selection process from among twenty law firms that presented their proposals to Andje. The contract had a value close to 4,000 million pesos, according to the contract that can be accessed on the Public Procurement Agency platform.

Images of the San José Galleon, revealed by the government of Colombia, on June 6, 2022.Presidency of Colombia

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Coordinates in dispute

The lawsuit over the coordinates is one of the most relevant obstacles in the case. The controversy dates back more than 40 years. In 1982 the Glocca Morra company, now Sea Search Armada, announced the discovery of “a large shipwreck” within an exploration area that had been agreed upon with the Colombian Maritime Authority (Dimar) a few years before. That deal stated that the company had the right to 50% of the treasure it found in the delimited area. In that report he did not refer to the galleon.

More than a decade later, in 1994, Colombia hired an independent study that concluded that there was no shipwreck in those coordinates, but rather “pieces of wood corresponding to the modern era.” Despite this, Sea Search continued to defend that it had rights to what was found in that area. A decision by the Supreme Court of Justice in 2007 ruled in favor of the company: it deserved ownership of half of the assets found, as treasure. But Colombia reiterates that the Spanish ship is not among them. For this reason, he has reiterated that the legal battles that the company has undertaken both nationally and internationally (in the United States and before the Inter-American Commission on Human Rights) are unfounded.

The contest gained another boost in 2010, when Colombia and the United States signed a free trade agreement (FTA). The agreement includes a chapter that protects the resources of American investors in the country and empowers companies of that nationality to initiate an arbitration process in case of dissent. Sea Search Armada seeks protection as a US investor under the FTA and has therefore undertaken litigation in court. For Colombia, the company cannot be considered as such: “The company does not have a protected investment nor can it claim to be an investor (…). That he now appears before this Court is a desperate attempt to claim property rights that he never had,” the State argues in a response to the arbitration notice.

Another key point in the Colombian strategy is supported by the decision in 2020 of the Ministry of Culture to declare the galleon Saint Joseph as an asset of cultural interest, thus shielding it from any commercial exploitation and turning it into an “unseizable” heritage of Colombians. This classification – reinforced with the declaration of the shipwreck area as a protected archaeological area – protects its preservation, so that both the ship and its contents are indivisible. It is a position supported by Spain, the initial owner of this ship that set sail with 600 crew members.

The team that will defend Colombia in The Hague will have renowned international jurists such as the Franco-Iranian lawyer Yas Banifatemi, one of the most recognized figures in the field of arbitration. There is also Colombian representation: the lawyer Ximena Herrera, who had already worked in the Meritage case —who won the State and saved more than 300 million dollars—, and the lawyer José Antonio Rivas, who participated in victories for the State against Sea Search before US courts in 2010 and 2011.

Both Herrera and Rivas maintain that they cannot reveal the details of the defense. “Colombia is respectful of the arbitration process and, therefore, seeks to litigate this controversy directly before the Court,” they respond to this newspaper’s questions. However, they confirm that they will present their response in December and that the hearings will take place next year in which it is expected to resolve, four decades after the first exploration, the ownership of the Saint Joseph.

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