Hamish Ross on America's Cup status of RNZYS

by Hamish Ross on 28 Sep 2007
Alinghi General Counsel, Hamish Ross has responded to several issues raised in the story by Sail-World, entitled ' Would George Schuyler have accepted RNZYS in the America's Cup?'

Thank you for an opportunity to respond to your article of the 25th to clarify several points.

RNZYS holds a pre-eminent place both within New Zealand and internationally for its yachting achievements. No one can doubt it has been a nationally and internationally recognised yacht club for now almost 150 years. The question of its past status in relation to the America's Cup is now only of both historical and now recent narrow peripheral legal interest in the context of the Deed of Gift and a legal challenge to the status of CNEV as the new Challenger of Record, due to the recent incorporation of CNEV, along with seven other past challenges.

Past precedent is influential in all common law countries, which includes the State of New York under whose laws the Deed of Gift is interpreted. There are at least eight past examples, including that of RNZYS of recently incorporated or unincorporated challengers being accepted as a challenger for the America's Cup competition. This illustrates a commendable practice on the part of past trustees starting with the New York Yacht Club, to interpret the Deed liberally to facilitate challenges for the America's Cup rather than interpret the Deed narrowly to restrict entries.

The reason why George Schulyer placed a requirement in the Deed of Gift that a challenger be ' incorporated, patented, or licensed' is because under long standing New York law a trustee of a charitable trust, as he endeavoured to create by the Deed of Gift, must be incorporated and have a separate legal personality from its members to act as trustee of the America's Cup, in the same way as a registered company has a legal personality distinct from its shareholders.

If a challenger wins the America's Cup, it becomes the trustee of the America's Cup and it must be incorporated if it is to assume and discharge the office as trustee in compliance with New York law. This is perhaps not widely understood. The Deed places no restriction as to how long prior to challenging must a yacht club be incorporated, only that it must have this status when challenging . The precise nature of incorporation differs from legal system to legal system in different countries, but in common law countries such as New Zealand and the United States it is a reasonably standard concept.

RNZYS in about 1902 received a royal warrant to use the 'Royal' appellation, and also at much the same time licence for its members to wear the British Blue ensign on their vessels provided their vessels were registered as British Ships (a requirement that became almost legally impossible to comply with from 1952 when ship registration in New Zealand become localised). While the Royal warrant and licence is indicative of official recognition of the eminence of RNZYS in 1902, it was not incorporation for the purposes of the Deed of Gift and New York law, and did not confer on the Club a separate legal personality different from that of its members.

As alluded to above this is only of historical, and I sincerely hope very temporary legal interest, and does not affect the what happened in the past, or indeed the prospect of another strong challenge by RNZYS's representative Team New Zealand to win the America's Cup in 2009.


Kind regards

Hamish Ross

For the original story see: www.sail-world.com/indexs.cfm?nid=37721