A company controlled Sir Paul Marshall, a hedge fund manager, lost a court battle with the South African Government over silver bars worth $43mn recovered from an Indian Ocean wreckage dating back to the second world war.
The UK Supreme Court sided on Wednesday with the Pretoria government, which had claimed it didn’t owe Marshall’s Salvage Company payment for the silver bar, which was purchased by then Union of South Africa in 1942 from the Indian Government.
Argentum Exploration recovered 2,364 bars from the wreckage of the SS Tilawa in 2017, which was sunk en route to South Africa by a Japanese sub. 280 people were killed.
The company controlled by Marsh retrieved the bars at a depth 2.5km from the seabed and took them initially to the UK in order to claim salvage rights to the treasure which was valued at $43mn ($43mn) in 2020.
Argentum conceded later that South Africa owns the bars, but demanded compensation for recovering them.
The Supreme Court ruled on Wednesday that the country has sovereign immunity against Argentum’s claims, overturning previous rulings by the High Court of Appeal and Court of Appeal.
Argentum’s claim was dismissed by the Court of Appeal because it had determined that the silver “was in use” commercially.
The Supreme Court Judges disagreed with this unanimously and stated in their judgement: “The exception of immunity. . . “The silver, at the time the cause of action arose was not in use or intended to be used for commercial purposes.”
Both sides have independently reached a settlement.
Jonathan Goulding acted as the lawyer for the Republic of South Africa in the court case. He said that there was a confidential agreement between Argentum and the South African government shortly before the verdict was delivered.
The ruling could have a significant impact on the way historical wrecks will be salvaged in future. If you want to bring cargo to the UK and claim ownership, it is important to first identify the owner of the wreck. Then make contractual arrangements to retrieve the cargo. If the cargo was brought to the UK by a government, and it was intended to be used for state purposes, then they may have to give it up without compensation.
Marshall Wace is one of the largest hedge funds in the world, managing assets of $65.4bn. also owns a significant stake in the broadcaster GB News. According to filings with the company, he is in control of Argentum Exploration. It was founded in 2012.
Ross Hyett said, “The Supreme Court overturned both the High Court’s and Court of Appeal’s decision in an important judgement clarifying the law regarding sovereign immunity. . . “The parties have reached an agreement, which closes the matter.”