Court Hearing date set for new Rules and ISAF issue in America's Cup

by Richard Gladwell, Sail-World on 15 Jul 2009 Golden Gate Yacht Club has lodged a compliant and obtained a Hearing in the New York Supreme Court, for next Tuesday, over a secret agreement that has been signed between the International Sailing federation and Societe Nautique de Geneve regarding the conduct of the 33rd America's Cup.

Golden Gate allege that ISAF have been paid UKP150,000 by SNG under the secret agreement.

Other issues raised include the rules which are operative for the 33rd America's Cup, and SNG's ability to alter those rules at will, and without reference to the Challenger. Of primary concern are the rules relating to use of movable water ballast and use of engine power, which are restricted pr prohibited by the Racing Rules (20054-2008 edition).

In its submissions Golden Gate YC disclose that they do have a new yacht under construction and will be disadvantaged by any unilateral change in the rules, which would have changed the design approach taken with their latest boat, which will be the USA stated in the Notice of Challenge, issued in July 2007 (and for which the provisions RRS 2005-2008 are relevant.

An agreement between the America's Cup event organisers and the International Sailing Federation is quite usual, as is the payment of money under such an agreement. The payment is in recognition of the role (and costs) that ISAF has incurred over time in the training and development of officials that are being used by the Event Organisers for the America's Cup. It also has included a licence fee for the use of the Racing Rules and other ISAF intellectual property relating to the RRS. Such agreements have also set down payments for the umpires, jury and other ISAF certified officials used in the America's cup and Louis Vuitton Cups.

Because such agreements have covered the use of officials and rules in the America's Cup and Louis Vuitton Cups, they have been developed in conjunction with the Defender and Challenger, and are known to both parties.

As the 33rd America's Cup will not be conducted under Mutual Consent, the Defender has clearly chosen to operate under secrecy to maintain a defensive advantage. Whether that is a correct position, will be determined by the Supreme Court.

In the 1988 Big Boat vs the Cat Match, although there was a Deed of Gift Challenge, as there is now, the parties, Mercury Bay BC and San Diego YC, did sit down and and agree terms and conditions of the Match. Ironically one of those who has provided an affidavit in this latest action. Tom Ehman, then Chief Operating Officer for Sail America the America's Cup tentacle of San Diego yacht Club, was infamously quoted as saying in the San Diego Union newspaper on 20 November 1987 as saying 'we'll jimmy the rules to win this thing' after having previously addressed a lunch at St Francis YC where it is reported he spoke along similar lines

It was not until the 2000 America's Cup when then ISAF President Paul Henderson fought a very hard and bitter battle with America's Cup organisers, Defenders and Challengers over payments for use of ISAF property and officials.

Henderson also obtained substantial payments to the various national authorities who had invested heavily in the development of sailors participating in the America's Cup. Those payments were stopped in the 2003 edition of the Cup onwards, however they did enable one national authority to establish a sports development fund of USD350,000 which is used for the ongoing development of young sailors and other development programs within the sport.

All such agreements have been publicly disclosed, and all America's Cups in the modern era have been conducted using International Sailing Federation (and its predecessor the International Yacht Racing Union) Rules and more recently only ISAF certified Officials, after the legendary distrust by challengers of the use of 'home club' officials and Jury by the New York Yacht Club.

Under its own regulations ISAF is required to appoint the International Jury and other key officials for an America's Cup Match. The way the regulations are worded it is clear that this should be independent of the competitors and their clubs. In other events ISAF's role is restricted to approving the International Jury for an event, and in that instance the officials are organised and initially selected by the organising club before being sent to ISAF for approval.

The full statement issued by Golden Gate is as follows, together with affidavits from BMW Oracle's Tom Ehman and Rules Adviser Richard Slater. Slater refers to a conversation he had with ISAF treasure David Kellett (AUS) in which the secret agreement between Societe Nautique de Geneve is discussed:

At Golden Gate Yacht Club’s request, today the Supreme Court of the State of New York issued an order directing the defender, Société Nautique de Genève (SNG), to show cause why it should not be held in contempt of court for failing to comply with the America’s Cup Deed of Gift by denying GGYC its rights, as the next America’s Cup challenger of record, as detailed in the Order and Judgment.

Specifically, to date SNG has refused to affirm its sailing regulations and rules to GGYC as required by the Deed. To make matters worse, SNG said that it may change the rules in the future without GGYC’s consent, including the rules governing construction of the competing vessels.

Further, it has entered into a secret agreement with the International Sailing Federation ('ISAF'), the organization which will have a central role in selecting match officials and sailing jury.

'Once again, Alinghi seems to believe the Deed and other rules do not apply to them,' said GGYC spokesman Tom Ehman. 'As we said in our court brief today, the prejudice to GGYC is manifest. For example, SNG has proclaimed the intent and authority to construct its competing vessel with engines to trim sails and movable ballast, each now banned by the ISAF rules, and then announce a change in those rules that permits them. In designing its competing vessel, GGYC was compelled to rely on the ISAF rules which prohibit engines and movable ballast.'

In early April the New York State Court of Appeals, in a unanimous 6-0 ruling, held that GGYC is the rightful challenger, and that the next match would be in early February 2010. The Deed of Gift provides that the Cup match 'shall be sailed subject to [the defender’s] rules and sailing regulations so far as the same do not conflict with the provisions of this deed of gift.'

The Deed also explicitly provides that the defender’s 'rules and sailing regulations' for the match may only be modified through mutual consent of the defender and challenger. At the time of GGYC’s challenge on July 11, 2007, SNG’s 'rules and sailing regulations' were those of the International Sailing Federation ('ISAF'), including the ISAF Racing Rules of Sailing ('RRS') that then and now govern major sailing events. These rules apply 'so far as the same do not conflict with the provisions' of the Deed. However, by letter to GGYC dated April 23, 2009, SNG for the first time claimed the right to change the rules for the match at anytime without mutual consent.

But SNG did not stop there. An ISAF Executive Committee member has acknowledged that on June 5, 2009, SNG (or its racing team Alinghi) paid ISAF €150,000 pursuant to a secret agreement making certain arrangements concerning ISAF’s role in, and the 'rules and sailing regulations' for, the next Cup match. Neither ISAF nor SNG/Alinghi will disclose the secret agreement to GGYC.

Especially in light of ISAF’s central role in selecting the match officials and sailing jury, such collusive secrecy is unacceptable and violates SNG’s fiduciary duty to GGYC as the challenger of record and trust beneficiary.

The court scheduled a hearing for Tuesday, July 21 at 10 a.m.

Links to supporting documents lodge