The term “treasure salvage” has a tendency to conjure romantic images of pirates and adventurers. Not, I might add, of modern day pirates, who are widely acknowledged to be unromantic thugs and scoundrels, but rather those of the old story books, of whom time and fi ction writers have been more forgiving. In these stories, “x” marks the spot and the hero follows obscure and cryptic clues in a wild adventure to the longlost chest of gold in the abandoned sunken shipwreck, keeping it all for himself and living happily ever after.
Just to define our term, by “treasure salvage” we mean the subsea exploration and recovery of artifacts from sunken vessels that are believed (or, more often, hoped) to be of historical or monetary signifi cance. Successful treasure salvage has always required mastery of the combined disciplines of historical research and subsea exploration and recovery, and in real life, of course, it has always involved long hours and a lot of disappointment.
As in many areas, technology has been the driver of change. Subsea exploration that was impossible just twenty years ago is now practically routine. Modern satellite positioning capabilities are precise to a degree that was only recently inconceivable. Data analysis and computer modeling capabilities are exponentially more sophisticated, and are expanding rapidly with each passing year. Historical research and information is more widely available and accessible thanks to the internet. Successful treasure salvage, in other words, has become increasingly a product of investment and hard work rather than a game of chance.
The result of these changes is that sunken shipwrecks that were once assumed to be lost forever are increasingly being found. In addition to the “rogue” salvors who have traditionally engaged in the treasure salvage business, sophisticated publicly traded companies have entered the scene in recent years and have applied considerable funding and efforts towards seeking out newer and more dramatic discoveries. The discovery of the TITANIC in 1985 and of the sidewheel steamer CENTRAL AMERICA in 1987 are good examples of early high-profi le discoveries, and more recently Odyssey Marine, a publicly traded company, discovered a shipwreck it nicknamed the “Black Swan,” recovering over 500,000 silver coins weighing some 17 tons and hundreds of gold coins and worked gold. According to news reports, the estimated value of the recovered property in this case was about $500 million.
The United Nations estimates there are some 3 million shipwrecks on the ocean fl oor. Most, of course, are of no interest to treasure salvors; however, there are many undiscovered wrecks of substantial interest to subsea explorers. Of course, treasure salvors are only one subset of subsea explorers, and a perennial confl ict exists between the interests of archaeologists and historians on the one hand, who are principally interested in collecting and preserving historical and culturally signifi cant information, and treasure salvors on the other who, at least according to stereotype, are principally interested in recovering artifacts of value.
As it often occurs, the law has been forced to adapt to these technological developments, and the adjustment has not always been entirely smooth. Early treasure salvage cases tended to rely upon the maritime law of “fi nds” to hold that a party that recovered artifacts from an abandoned shipwreck was entitled to keep them. More recently, however, the courts have substantially favored applying maritime salvage law. In a nutshell, the difference is that under the law of fi nds the fi nder is considered to have title to the property once it obtains possession. Under the salvage law, by contrast, the salvor merely has a lien in the property and is deemed to be holding it in trust for the owner. It does not obtain title, but instead is entitled to a salvage award to reward it for recovering the property for the benefi t of the owner. The salvage law presumes, in other words, that a property’s owner did not intend to abandon the property merely because it was lost at sea.
To enforce a salvage lien, the salvaged property must be arrested within the jurisdiction of a competent court or must otherwise be physically brought into the jurisdiction of the court. In the United States, the Federal District courts are vested with exclusive jurisdiction over maritime salvage claims. Once the property is within the jurisdiction of a competent court, that court may adjudicate the ownership and salvage interests in the property as against all potential claimants. This is based on its in rem jurisdiction over the property.
But what about a shipwreck sitting on the ocean fl oor in international waters? What law applies? And what court has jurisdiction? Or, indeed, should any court have jurisdiction? This issue was at the fore in the litigation concerning the
TITANIC, which has reached the Fourth Circuit Court of Appeals on three separate occasions. In those decisions, the Fourth Circuit confi rmed the view that the law of salvage should ordinarily prevail over the law of fi nds in this context. It also concluded that the law of salvage was so universal and well accepted that it constituted, in essence, the general maritime law of nations that should—and would—be uniformly recognized in maritime jurisdictions around the world. Thus, a U.S. District Court may exercise “constructive in rem jurisdiction” over a shipwreck in international waters, so long as the salvor has managed to bring some small artifact from the wreck in to the jurisdiction.
Constructive in rem jurisdiction means, in essence, that a U.S. court may issue orders designating a party as “exclusive” salvor of a wreck and may issue orders to protect the wreck site from interference from others. It may also issue orders to protect archaeological or historical data that might otherwise be damaged or lost in the course of salvage operations. It may not, however, adjudicate ownership of the property, nor may it issue a salvage award in the property, until such time as the property is physically brought within the jurisdiction of the court. The premise for exercising such extra-territorial jurisdiction is that the law of salvage is so widely recognized that a foreign court would enforce an order of the U.S. court as part of the international general maritime law.
This premise may be a bit wishful: while it is unquestionably true that the law of salvage belongs to the ancient and revered maritime law, its application to confer some degree of jurisdiction over shipwrecks located in international waters is certainly a newer—and probably less universally recognized—phenomenon. And perhaps it begs the question: should salvage law allow a U.S. court to effectively extend its jurisdictional reach into international waters?
As a practical matter, it is diffi cult to see an alternative that allows the salvor its reward and yet also protects both the private interests of the original owner of the property and also the public interest of preserving sites of signifi cant cultural or archaeological importance. Under the law of fi nds, the fi nder has the incentive to reduce found property to its possession at the earliest possible opportunity, because that is how it establishes its rights in the property. Under a strict salvage regime, on the other hand, the salvor would have a similar incentive to take and deliver possession of salved property into the custody of the court at the earliest possible opportunity so that it could perfect its claim for a salvage award. In either case, the recovering party would have a strong incentive to immediately recover found artifacts even at the expense of the integrity of the wreck site.
Under the constructive in rem approach, by contrast, the salvor can take a more methodical approach to salvaging the wreck: once it has done its preliminary investigation and has determined that it has found a site of suffi cient importance, it can commence an action by delivering only a token artifact into the jurisdiction of the court. This is largely a symbolic gesture, but also serves to confi rm that the salvor has, in fact, located a wreck and that it has the means of recovering artifacts from it. Once the court has constructive in rem jurisdiction it can enter orders to protect the salvor’s salvage interest, such as naming the party the exclusive salvor in possession, which can help to avoid a “fi ght” over access to the salvage site or a damaging race to recover artifacts. It can also substantially incentivize the salvor to use best practices in conducting the salvage operation, because the court can make it a condition of maintaining its exclusive status that the salvor demonstrate a continuing commitment to preserving the integrity of the site and any recovered property. The court can also enter orders aimed at protecting the site itself, such as requiring certain specifi c record-keeping procedures or preservation methods. It can also entertain submissions by third parties who may have a specifi c interest in ensuring the site is properly handled or salvaged.
It is probably impossible to construct a legal regime that fully recognizes and protects all of the competing interests in a historical shipwreck located in international waters. But devising the best possible balance within the confi nes of existing, well-recognized legal principles must continue to be the goal, and ultimately it will be up to the courts to continue to wrestle with this issue in the coming years. The one thing that seems certain is that the cases will keep coming as long as there is still treasure to be discovered at the bottom of the sea.
This article fi rst appeared in the September 2011 edition of Maritime Reporter, www.maritimereporter.com.