America's Cup - Off the Record - 30 April- Alinghi on thin ice

by Richard Gladwell, Sail-World.Com on 30 Apr 2009
Much of what we have written since the Appeal Court Decision of 2 April has come from various sources, international and local, close to the America's Cup action, who won't be quoted but are reasonably happy to talk off the record, on a 'not to be attributed' basis.

A leading legal source contacted by Sail-World believes that the New York Supreme Court will get 'very stroppy' with Societe Nautique de Geneve, Defender of the America's Cup when the Contempt of Court matter is heard on 14 May.

Sources have told Sail-World that they believe that while there might be some conflict between the provisions of the Deed of Gift and what was required to satisfy the timing issue created by the 10 month period in the Notice of Challenge (the minimum contemplated by the Deed of Gift), they believed that 'the Court would have been aware of the provisions, and while it is not easy to reconcile the two, nevertheless the Court has made an Order.'

As reported yesterday, SNG's view seems to be that there is an apparent contradiction between the requirements of the fifth and latest edition (1887) for of the Deed of Gift for the America's Cup, modified in 1985 to cope with a southern hemisphere Defence by Royal Perth Yacht Club in Fremantle.

That amendment set a time period when the Match could be sailed in the Northern Hemisphere, between the months of May and October, and in the Southern Hemisphere between November and April.

SNG's view is that the Match date of 7 February 2010, constructed from the Order handed down by Justice Herman Cahn in the New York Supreme Court, and the date of the Appeal Decision from the Court of Appeal in New York, is contradictory to the terms of the Deed of Gift.

That Order, calls for a Match to be sailed in the 'prohibited time zone' for a Northern Hemisphere venue (stipulated as Valencia, or another venue agreed by the parties).

There is a further view, going back into previous editions of the Deed of Gift, which says that it was clear (and logical) that if the Defender and Challenger were both Northern Hemisphere clubs, then the Match should be sailed in the Northern Hemisphere

One Legal source told Sail-World: 'It is up to Alinghi to decide where they hold the event and they can do it in the Northern or Southern hemispheres, wherever they like, that is their right. But those are the dates, and not complying with that is a breech of a Court Order. And, it is a Supreme Court. My prediction is that the Court will be pretty stroppy with Alinghi.'

While Alinghi may try and put the defence of implied confusion between Deed of Gift's Northern and Southern Hemisphere requirements and the dates confusion therein, our sources believed that they would 'get very little sympathy, and they would be heavily fined.'

'The Court is interpreting the Deed of Gift, and they are the final Court. While you might not always agree with the way Courts interpret contracts, or anything else - but whatever judgment they give, that's it!'

'My advice to Alinghi would have been 'don't muck around' just do what the Court has told you to do'.

The papers lodged by Golden Gate Yacht Club which triggered the Contempt of Court Hearing, called for Societe Nautique de Geneve to be given the maximum fine allowable. Sources contacted by Sail-World were unsure of what the limit might be in USA, however generally in the British justice system there was no maximum fine for Contempt of Court. And in the case of individuals being held in Contempt of Court (as opposed to clubs and corporates) they are liable to imprisonment until they have 'purged their contempt' (meaning they have to apologise and agree to comply) and also fined for that breech.

'However since SNG had submitted to the jurisdiction of the New York Court, there would be no jurisdictional issue over the Court's power to fine them, or conceivably even to imprison the officers of the yacht club, if they landed in New York.' However it is expected that once the Court has ruled in the Contempt Hearing that SNG will accept that decision, without further ado.

Turning to the Customs House Registry issue, which has been raised in the letter from SNG some legal sources spoken to by Sail-World, believed that SNG would 'get a short shrift if they took the matter back to Court, as it was such a technical matter, they would be unlikely to get the time of day on it.'

'Alinghi's problem is that the Appeal Court had given a very clear direction that they should have their racing and stop mucking around in the legal system. I don't think they would get a very good hearing.'

Others agreed to some extent with this view, however also made the point that given that the Challenge had now been accepted by Alinghi, that there was no real reason why this document could not be submitted. the Deed of Gift requires that this be 'sent as soon as possible'.

More to come....