America's Cup document says RNZYS against Protocol

by Richard Gladwell, Sail-World on 8 Oct 2007
Documents filed with the New York State Supreme Court claim that Royal New Zealand Yacht Squadron's racing team, Emirates Team New Zealand, was one of six signatories, who had strong objections to the Protocol for the 33rd America's Cup.

Their opposition has, to date, been kept out of the public spotlight but excerpts from the document signed by the racing teams associated with RNZYS and Deutscher Challenger Yacht Club (Team Germany) are mentioned in a Memorandum of Law filed by New York legal firm, Latham & Watkins, acting for BMW Oracle Racing, the team of Golden Gate Yacht Club.

The letter signed by the Challengers says, in part, 'In our collective role as past Challengers and prospective Challengers, our opinion is that this Protocol is the worst text in the history of the America’s Cup and more fundamentally, it lacks precisely the mutual consent items which are required..'

Two new documents have been filed. The first by Tom Ehman of BMW Oracle Racing which sets out a list of the Challengers of Record since the inception of the America’s Cup. The purpose of this document is to offset claims by the Defender, Societe Nautique de Geneve, that there is precedent for the 'paper club' accepted as Challenger of Record for the 2009 America’s up. It was this action and the Protocol agreed between the two, that triggered the current brouhaha.

Two New Zealand yacht clubs are at the centre of these claims. First the RNZYS, which SNG claim was not incorporated until 2003, after it lost the America’s Cup. The second is Mercury Bay BC, which in spite of having a car for a clubhouse, had been organised as a yacht club for almost forty years - rather than the matter of days for the current CoR, Club Nautico Espanol de Vela.

One of the arguments advanced by SNG has been the fact that because five challengers have entered the 2009 America’s Cup, that they have, by definition, supported the Protocol for that event, and are in agreement with it.

The Memorandum of Law filed by Golden Gate YC’s addresses on this point:

'In a transparent effort to show support for its violation of the Deed, SNG argues that four 'accomplished and experienced sailing teams' have 'signed on to join SNG and CNEV to race' under the Protocol.. SNG falls to advise this Court that three of those challengers have publicly objected to the Protocol and CNEV’s challenge, either directly or through their racing representatives. On July 16, 2007, the racing representatives of Deutscher Challenger Yacht Club and the Royal New Zealand Yacht Squadron ('RNZYS'), were among the six signatories (all of which were distinguished yacht clubs and racing representatives that participated in the 32d America’s Cup) to a letter setting out the reasons why the Protocol is entirely unacceptable..

The letter provides:

'In our collective role as past Challengers and prospective Challengers, our opinion is that this Protocol is the worst text in the history of the America’s Cup and more fundamentally, it lacks precisely the mutual consent items which are required....

'You are well aware that serious questions have been raised about the legitimacy of the newly created and purely instrumental entity called 'Club Nautico Espanol' to advance a Challenge under the provisions of the Deed of Gift. In the sincerest hope that the America’s Cup competition will not have to endure the turmoil associated with litigating that issue, but will rather move forward with balanced and fair procedures and protocols that have historically characterized this competition, we ask you to dissolve 'Club Nautico Espanol' and withdraw your Challenge within the month of July 2007.

'When recently asked '[w]hat don’t you like about the protocol?' the Commodore of the Royal New Zealand Yacht Squadron ('RNZYS') said 'Everything!'

'Similarly, the Captain of South Africa’s team Shosholoza, which has also challenged under SNG’s Protocol, stated that 'CNEV does not have the required qualifications to be CoR [Challenger of Record] in my opinion.'.

'Indeed, even the Commodore of RNZYS, one of the current challengers for.the 33rd America’s Cup, after becoming a challenger, conceded that CNEV is illegitimate. When asked 'Does it matter that Desaflo isn’t represented by an established yacht club, since it wasn’t last time?' responded that 'It shouldn’t have been allowed last time.'. '

The Memorandum of Law traverses many points raised by SNG, and runs to 23 pages and it seems that the decision of the New York Supreme Court will come down to interpreting the meaning of words in the Deed of Gift to determine whether or not Club Nautico de Vela is in compliance.

Two key words are 'fulfilling' and 'having' which SNG argue have an acceptable meaning of intention to comply at some time in the future. Where Golden Gate YC argue that the words have a past tense meaning only, meaning that there is a 'tick-box' exercise to be conducted and that the challenging Club must already have met the criteria set out in the Deed of Gift.

One of the ways of testing the interpretation by SNG is to logically extend the word’s implied meaning into other areas, and to give these a 'sanity check'.

Back to the Memorandum of Law, looking at the meaning and implications of the word 'fulfilling':

'CNEV’s notice of challenge cannot preempt a subsequent challenge from a yacht club that has met the conditions of the Deed, such as GGYC. The Deed of Gift is explicit: 'when a challenge from a Club fulfilling all the conditions required by this instrument has been received' no subsequent challenge can be considered. (emphasis added).

''Fulfilling all the conditions required' means what it says. For example, the term 'fulfilling is used in the New York education law that empowers the Board of Regents to 'endorse a license upon the applicant fulfilling the following requirements: . . . Age: be at least 21'. The age requirement in this statutory example would be rendered meaningless if 'fulfilling' meant qualifying sometime in the future. 'Fulfilling' here means possessing the 21 year old minimum age. Otherwise, an 18-year old could qualify because he was in the process of becoming a 21-year old.

'This entirely obliterates SNG’s fanciful interpretation of the Deed that would permit an unqualified challenger to become qualified at some indefinite time in the future. It renders irrelevant CNEV’s Chairman’s statements that CNEV intends to become 'a normal club' and that he undertakes to have a CNEV regatta.

'It is undisputed that GGYC, the Challenger of Record for the 32nd America’s Cup is a 'Club fulfilling all the conditions required by this instrument.' As of July 11, 2007, the date on which GGYC noticed its challenge, CNEV was not an organized yacht club '

The other word in question is 'having', and the believed requirement by GGYC that in order to qualify as Challenger of Record a club must already have staged an annual regatta on an ocean course. SNG argued that the intention to hold such a regatta was sufficient to comply with this requirement.

The Memorandum of Law has a long hard look at this one, too:

'Any fair reading of the plain language of the Deed’s requirement, '[a]ny organized Yacht Club. . .having for its annual regatta an ocean course,' would conclude it means that to be eligible the yacht club must have an annual regatta.. SNG contends that the Deed means only that the club must undertake to have an annual regatta at some undefined time in the future —just so it can meet this requirement. SNG’s only support for this is the assertion that 'the Deed uses the word ‘having’ which, fairly read, includes past, present or future regattas.'. SNG cites no authority whatsoever for this outlandish distortion of the text. SNG’s reading defies logic and contradicts standard usage.

'First, by SNG’s logic, a 'person having a law degree' could practice law wit

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