Tampa (Florida) - June 3rd, 2009.

In the words of U.S. judge Mark Pizzo: “More than 200 hundred years has passed since the Mercedes exploded. Her place of rest and all those who perished with her that fateful day remained undisturbed for centuries - until recently. International laws recognize the solemnity of their memorial and Spain's sovereign interests in preserving it. This court's adherence to those principles promotes reciprocal respect for our nations dead at sea. […] This court warrants Spain's motions to vacate the Mercedes' arrest and to dismiss the Odyssey's amended complaint.”

This quote from judge Mark Pizzo is a missile headed toward the flotation line of Odyssey Marine Exploration Company, a leader in the exploration of submarine archaeological sites. It recognizes Spain’s efforts to defend its naval heritage over the last two years since Odyssey first announced the discovery of a treasure made up of 500,000 gold and silver coins, on May 18th, 2007. The company code named the discovery Black Swan, and revealed only that they had found the wreck at an undisclosed location in the Atlantic Ocean.

The Legal Battle

Spanish authorities suspected early on that the galleon in question was the Nuestra Señora de las Mercedes, a Spanish warship that was sunk by English cannon fire on October 5th, 1804 in the Santa María Cape, off the Algarve Coast.

Since the wreck was discovered, there has been an ongoing litigation in the Tampa court over which party has rights to the treasure. The two-year struggle has generated sizable legal fees, dozens of official filings, numerous arguments in front of the judge and even a boat chase across the straights of Gibraltar when the Spanish Civil Guard pursued Odyssey crafts.

The culmination of all this was a judicial decision that undermines the company’s interests, resulting in a 41 percent drop in the value of Odyssey shares on NASDAQ yesterday. For now, the ruling is merely a recommendation that a Florida higher court judge will take under advisement when making a final decision on the matter. The ruling finds that the U.S. tribunal has no jurisdiction in the case because the warship is the sovereign property of Spain, trumping any kind of claim presented in the U.S.

If the judge approves the ruling, Odyssey will have 10 days to hand over the treasure or to go to the court of appeals. This is what will happen, as Odyssey announced yesterday. Subsequently, the lawsuit could go on for two years or more. If the court rules with Spain, the company still would have the option of making an appeal to the U.S. Supreme Court. Meanwhile, the coins will remain under watch in Tampa.

Odyssey claims that Mercedes was traveling on a commercial voyage when it was sunk; and will try to win the support of the descendants of the crew, most of them merchants who entrusted their fortunes to the galleon when it set sail from Lima, Perú. “We think that those people will join our claim,” stated Melinda MacConnell, Odyssey`s vice president and lawyer. Greg Stemm, Odyssey’s principal council, declared feeling “very surprised” by the court’s ruling and expressed confidence “that the judge will realize the weakness of Spain’s arguments.”

But the truth is that, at least for now, Spain has reinforced its defenses. “It is a precedence for future discoveries,” assured the culture minister, Angeles González-Sinde, according to Rocío García. “We have been waiting two years for this decision, however, must now wait until the end of the whole process.” The minister also praised the judge for paying respect to the “people who perished on that fateful day.”

[Editor’s note: some quotes may be worded based on translated material].