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Hedge fund boss Paul Marshall loses case over silver recovered from shipwreck
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A company controlled by hedge fund manager Sir Paul Marshall has lost a legal battle with the South African government over $43 million worth of silver bars recovered from a Second World War shipwreck in the Indian Ocean.
The UK Supreme Court on Wednesday sided with the Pretoria government, which argued it did not owe Marshall’s salvage company payment for the silver bars, which were purchased by the then Union of South Africa from the Indian government in 1942.
Argentum Exploration found and recovered 2,364 bars of the precious metal in 2017 from the wreckage of the passenger ship SS Tilawa, which was sunk by a Japanese submarine en route to South Africa, with the loss of 280 lives.
The company, controlled by Marshalrecovered the bars from the seabed at a depth of 2.5 km and initially took them to the United Kingdom to claim salvage rights over the treasure, which was valued at $43 million in 2020.
Argentum later admitted that South Africa owned the bars, but demanded compensation for their recovery.
The Supreme Court ruled on Wednesday that the country had sovereign immunity in relation to Argentum’s claim, overturning previous rulings by the High Court and Court of Appeal.
The Court of Appeal concluded that the silver was “in use” for commercial purposes, which removed South Africa’s legal immunity from Argentum’s claim.
But the Supreme Court justices unanimously disagreed, stating in their ruling: “The exception to immunity. . . does not apply because the silver was not, at the time the cause of action arose, in use or intended to be used for commercial purposes.”
The two sides reached an independent agreement.
“There was a confidential settlement between the South African government and Argentum shortly before the ruling was handed down, so I can’t comment on where the silver is now,” said Jonathan Goulding, senior associate and sailor at law firm HFW. who acted on behalf of the Republic of South Africa during the judicial process.
“The decision could have an impact on how historic wrecks are recovered in the future. Anyone wishing to recover cargo from a shipwreck and bring it to the UK to claim ownership should consider taking steps to identify the original owner and make contractual arrangements for its recovery. Otherwise, there is a risk that if cargo is brought into the UK and is owned by a government and is intended to be used for state purposes, they will have to hand it over without compensation.”
Marshall is the head of one of the world’s largest hedge funds, Marshall Wace, which manages around $65.4 billion in assets, and has a large stake in broadcaster GB News. According to company records, he controls Argentum Exploration, which was formed in 2012.
Ross Hyett, managing director of Argentum, said: “The Supreme Court has overturned the decision of the High Court and Court of Appeal in an important judgment that clarifies the law on sovereign immunity. . . The parties involved have now reached an agreement, which brings the matter to a close.”