Latest America's Cup ruling a drafting error?
by Richard Gladwell, Sail-World on 13 May 2008
Sources close to the America’s Cup told Sail-World today that they believed that the prescription of a 12 March 2009 date might have been a drafting error by a New York Supreme Court clerk, who was unaware of the 'no sail' period in the Deed of Gift.
Alinghi’s Barry Ostrager makes a point at the New York Supreme Court Hearing on 02 April 2008, leading to today’s decision. George Layton
The Deed of Gift states that 'no race shall be sailed in the days intervening between November 1st and May 1st if the races are to be conducted in the Northern Hemisphere'.
It also states that 10 months notice of a challenge is required, and the question that Justice Herman Cahn was asked related to how litigation affected the running of the ten month period.
In his decision (reported www.sail-world.com/indexs.cfm?nid=44338!here) Cahn seems to have focussed literally on the ten month period and when it should be operative.
The key part of the latest decision reads 'The defending champion, Société Nautique de Genève (SNG), argues that the ten-month notice period should be deemed to have commenced when the second decision was issued, on March 17, 2008.
GGYC commenced the litigation, and the subsequent opposition to GGYC’s claim as the Challenger of Record prolonged the uncertainty. Thus, it would be inequitable to deprive SNG of the benefit of a full ten-month period in which to prepare its racing vessel.'
'The ten-month period should commence when a binding decision has been entered. In New York practice that is when an order has been made by the Court. Only such an order triggers finality, for example the right to appeal. Such an order has been simultaneously signed'
So the timing of the 33rd America’s Cup has been set for the date of the signing of the Order which is about the 12th March – and which is six or seven weeks inside the northern hemisphere 'no sail' period.
In a separate Order Justice Cahn states:
'ORDERED that the location of the match shall be in Valencia, Spain or any other location selected by SNG, provided SNG notify GGYC in writing not less than six months in advance of the date set for the first challenge match race of the location it has selected for the challenge match races; '
The effect of these two orders is contradictory in that racing has been ordered in the northern hemisphere 'no sail' period.
One source spoken to by Sail-World believed this was an error on the part of the clerk.
The other view is that Justice Cahn stuck to the issue of solely determining the date from which the notice of challenge should run, which is also to be consistent with New York Supreme Court practice, and if this was in conflict with the Deed of Gift, then so be it.
Had he ordered a period longer than the 10 months (to get inside the 2 May 2009 parameter), then Cahn would have been accused of being overgenerous. And if he had ordered a venue outside the Northern hemisphere to suit the 12 March 2009, then he would have acted outside his powers (ultra vires) as Cahn had no power to determine a venue, and indeed, was not asked to do so.
Maybe realising the America’s Cup world was less than perfect, Cahn did the best he could in the circumstances, and put the ball in the Defender’s court – giving Alinghi/SNG two options – either to sail on the 12 March 2009 date, and name a southern hemisphere venue, or exercise the mutual consent provisions and cut a deal with Golden Gate YC for a northern hemisphere match sometime on or after 2 May 2009.
To date there has been no inclination towards the use of the Mutual Consent provisions of the Deed of Gift, by the Defender – however this would seem to be the most sensible solution – having got most of what they were seeking from Justice Cahn.
The logic used by Justice Cahn to arrive at his decision would seem to be a little flawed. He states:
'And as stated by the Court of Appeals in Mercury Bay Boating Club v San Diego Yacht Club (76 NY2d 256, 268 ):
Because the deed allows a challenge to be mounted upon 10 months’ notice, the defender of the Cup is allowed only this short time to construct a defending vessel although the challenger has had unlimited time to mount a challenge and thus may have taken years designing and constructing its challenging vessel. '
While this assertion may have been true in a 19th century challenge for the America’s Cup, in the current instance the catalyst for the Golden Gate YC lawsuit only arose after Societe Nautique de Geneve selected an illegitimate yacht club as its Challenger of Record – which may have been known to the parties a couple of weeks before the end of the 32nd Match, but was only confirmed after the Match had concluded.
There was simply no inkling, prior to this period, that SNG were going to do anything other than select a legitimate yacht club as its Challenger of Record. Had they done so, SNG could have got sign-off on their outrageous Protocol, and the other challengers would have had little chance of recourse – other than to enter and negotiate more acceptable terms.
But certainly there is no way that Golden Gate YC, or its team, would have been designing a multihull for several months before the conclusion of the 32nd America’s Cup and gained advantage of the type contemplated by the extract from the Mercury Bay decision.
Another twist which will come into the America’s Cup now, will be the vexed issue of the Customs House Registry (CMR), which Alinghi/SNG will insist on for the Golden Gate YC challenger to prevent them using the 10 month period to build a second boat, and using that as a Challenger – if it were faster than the first.
As the Deed of Gift requires that GGYC must supply the CMR 'as soon as possible' it can only enter the yacht that it currently has under construction. Although it could build a second and use that as a trial horse, or use it for parts close to the event if there was a major gear failure/breakage and there was insufficient time to build a new component before the start of the Match.
Even though Alinghi/SNG may have obtained a significant time gain today, they are still on a very tight design, build, launch and race program. Golden Gate YC are on a more leisurely path, and have plenty of time to properly tune their vessel and get the wrinkles out of their Challenger prior to the Match.
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