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Hedge fund boss Paul Marshall loses case over silver salvaged 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 $43mn of silver bars recovered from a second world war wreck in the Indian Ocean.

The UK’s Supreme Court on Wednesday sided with the government in Pretoria, which had argued it did not owe Marshall’s salvage company payment for the silver bars, which had been purchased by the then Union of South Africa from the Indian government in 1942.

Argentum Exploration found and retrieved 2,364 bars of the precious metal in 2017 from the wreck 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, which is controlled by Marshall, retrieved the bars from the seabed at a depth of 2.5km and initially took them to the UK to claim salvage rights over the treasure, which was valued at $43mn in 2020.

Argentum later conceded South Africa owned the bars but claimed compensation for recovering them.

The Supreme Court on Wednesday ruled the country had sovereign immunity from Argentum’s claim, overturning earlier rulings in the High Court and Court of Appeal.

The Court of Appeal had found that the silver was “in use” for commercial purposes, which removed South Africa’s legal immunity from the claim by Argentum.

But the Supreme Court judges disagreed unanimously, stating in their judgment: “The exception to immunity . . . does not apply because the silver was not, at the time when the cause of action arose, in use or intended for use for commercial purposes.”

The two sides have independently agreed a settlement.

“There was a confidential settlement between the government of South Africa and Argentum shortly before the judgment was handed down, so I can’t comment on where the silver is now,” said Jonathan Goulding, a senior associate and mariner at law firm HFW, who acted for the Republic of South Africa during the court case.

“The ruling may have an impact on how historical wrecks are salvaged going forward. Anyone hoping to recover cargo from a wreck and bring it to the UK to claim ownership of it should consider taking steps to identify the original owner and making contractual arrangements for its recovery. Otherwise, there is a risk that, if the cargo is brought to the UK and was owned by a government and intended for use for a state purpose, they will have to deliver it up without compensation.”

Marshall is the head of one of the world’s largest hedge funds, Marshall Wace, which manages about $65.4bn in assets, and owns a large stake in broadcaster GB News. According to company filings, he controls Argentum Exploration, which was incorporated in 2012.

Ross Hyett, managing director of Argentum, said: “The Supreme Court has overturned the decision of both the High Court and Court of Appeal in an important judgment clarifying the law on sovereign immunity . . . The parties concerned have now reached a settlement, which brings the matter to a close.”

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