Last round in America's Cup Legal?

by Richard Gladwell on 24 May 2008
As we write, the final exchanges of claim, response and counter response are being filed between Geneva, Valencia and New York.

Chances are that this will be the last week of America’s Cup Legal.

All that will remain is a hearing on 5 June 2008, where the parties will get about 10 minutes each to restate their case and then a decision from the Appellate Division of the New York Supreme Court, in about 60 days time – or early August.

That date will be a month later than the time specified in the Notice of Challenge for the 33rd America’s Cup lodged by Golden Gate Yacht Club on 11 July 2007, naming 4 July 2008 as the date for the first race.

The principal issues at the heart of the dispute have been previously dealt with at length, but to recap:

• The yacht club selected by the Defender as Challenger of Record, Club Nautico Espanol de Vela was not a legitimate yacht club, as specified by the Deed of Gift at the time of the challenge, 3rd July 2007. Since then it has lost its team, Desafio Espanol, who are now under the burgee of Real Club Marítimo del Abra. CNEV, a club of five members continues to this day to represent itself as a Challenger of Record, when it doesn’t have a sailing team.

• Golden Gate YC was accepted as the next valid challenger, by Justice Herman Cahn, however this continues to be disputed by SNG.

• SNG claim that the Notice of Challenge by Golden Gate was misleading because it used the words 'keel yacht' when clearly a multihull of some sort was contemplated. A similar argument flowed over into the Deed of Gift requirement for a Customs House Registry certificate to be supplied 'as soon as possible'.

Under this crust runs a labyrinth of legal argument, counter argument, claim and counterclaim and general disagreement on the meaning/interpretation of words used in the 1887 Deed of Gift.

Like all America’s Cups, time has emerged as a big factor.

• Initially Societe Nautique de Geneve ignored the Challenge lodged by Golden Gate YC. First they accepted another Challenge , forcing Golden Gate to file with the New York Supreme Court on 20th July. Still ignoring the NYSC process SNG appointed an Arbitration Panel to adjudicate on the CNEV validity, around the end of July. Still refusing to acknowledge the NYSC process, GGYC then obtained an Order three weeks later requiring SNG to respond. The first Hearing was on 10th September 2007, with SNG finally making a formal response to the Court on 21 September.

• Various offers continued to be made to settle, in parallel with the legal process. Initially SNG enjoyed reasonable support from some of the Challengers, 12 eventually, who subscribed to the view that it was better to enter and try to negotiate from within, rather than without. However as the gap between the requirements of SNG/Alinghi became closer and closer to the position offered by the Challengers, yet the situation became progressively intractable. Prompting the later comment from Emirates Team NZ’s CEO, Grant Dalton, that all Alinghi had to do was give away half of one marble from their bag of 100 marbles, it would have all been resolved.

• This parallel process continued until after Christmas 2007, when after a series of statements issued weekly through December 2007, that the point of no return for a settlement was being reached, Golden Gate YC issued a final note on 29 December 2007 saying in part: 'It is time to move on and know where we stand,' Russell Coutts, CEO of the club’s BMW ORACLE Racing team, said. 'We had hoped to negotiate a conventional regatta under the Deed’s mutual consent provisions. But the Defender has made it clear to us and the America’s Cup community that they will not negotiate. We are now fully committed to a multihull event in 2008.

• Societe Nautique de Geneve were offered a tolling agreement in September 2007, which would have frozen the Notice of Challenge until the legal dispute was resolved. However SNG did not sign this agreement, and counter-offered which under US law is effectively a rejection of the original offer, negotiations broke down again and Golden Gate YC had no option but to continue to prepare for a Match in July/October 2008.

The Alinghi response has been riddled with mixed messages as to their state of readiness/building program.

The Defender does not have to build a new boat, and can Defend in any yacht they wish, provided it is longer than 44ft on the LWL. It may be significantly shorter than the Challenger. It may be of a different type, and inherently faster.

One of the interpretations made in the Mercury Bay Appeal in 1988 was that a match did not inherently have to be 'fair'. Therefore the Defender can respond with whatever yacht to deems fit, provided the length requirements of the Deed of Gift are not exceeded, the the yacht is constructed in the counyty of the Defending Club.

In December 2007 Ernesto Bertarelli said in an interview published in 'Le Temps': 'That’s why we will put 200% of our energy and resources on the multihull, in order to accept the challenge from GGYC until another opportunity arises. For the moment, Alinghi has no other choice.'

This was almost two weeks after Justice Cahn’s first decision which essentially ruled in favour of Golden Gate YC’s claims, and one would have thought signalled that the next America’s Cup would be sailed in multihulls.

Then came this comment in an interview, published in the Swiss newspaper Tribune de Geneve four months later, from Bernard Cardis the owner of Decision SA, builder of Alinghi’s previous AC yachts:

'With a bit of anxiety, Cardis awaits from one day to the other a phone call announcing to him the starting of a new gigantic project, that of a multihull (catamaran or trimaran) of 90 feet, in expectation of a singular duel between Alinghi and Oracle in an always unknown place.

The problems lie in time that Decision SA will have to build this boat and so that the crew can carry out the developments and the essential confidence tests. 'If one asks me to build such a machine and to test it in less than six months so that it is ready with regatta at the beginning of October, I say not. Impossible! We have reached a level of complexity such as each part must be analyzed, validated. With such 'a marine monster', one will develop speed, superperformance ', Cardis adds.' And later: 'The design Team d' Alinghi, with Nigel Irens and Sebastien Schmidt in reinforcement, has studied the concept of the boat for several months, but construction has not yet started. 'The ideal, continues Cardis, would be to start the multihull in during April and to deliver it to mid-December, which would leave then three months of tests on water.'

All of which takes us to Justice Cahn’s curious Match date of 1 March 2009

The table below sets out the various dates that have put into the 33rd America's Cup equation, and shows Sail-World's analysis of the various impacts on the various stakeholders.

 

America's Cup Dates at a Glance

Date	Comment	Defender - Societe Nautique de Geneve	Challenger of Record - Golden Gate YC	Other Challengers
July 2008	Original date named in the Notice of Challenge by Golden Gate YC	Would not be ready, except in an existing boat that complied with the Deed of Gift	Could race, but would prefer not to on this date	Not included in a Deed of Gift Match. But gets the 34th America's Cup set up the soonest
October 2008	Date now sought by Golden Gate YC	Would not be ready, except in an existing boat that complied with the Deed of Gift. SNG need to name venue immediately as now well inside the six month window set by Justice Cahn.	Would be ready to race in a new 90ft x 90ft multihull	Not included in a Deed of Gift Match. But this is second soonest option and gets 34th America's Cup set up with the preliminaries ready to run in the 2009 European sailing season - probably in ACC V5 boats (used for 32AC)
March 2009	Date imposed by Justice Cahn, and rolled into current Appeal. Does not comply with the Deed of Gift	Potentially would be ready, provided they had a design well advanced and a build program almost ready to start. SNG don't need to name venue until September 2008. Could be Southern Hemisphere, or set by mutual agreement. Would have had nine months more time than the Challenger to prepare for the Defence.	Not that happy with this date but could live with it. Would be ready to race in a new 90ft x 90ft multihull.	Not included in a Deed of Gift Match. But this is third soonest option and may allow the 34th America's Cup to be set up with the preliminaries ready to run in late in the 2009 European sailing season - probably in ACC V5 boats (used for 32AC)
May 2009	Date sought by SNG as the closest to the March 2009 date that complies with the Deed of Gift	Should be ready. Don't need to name venue until December 2008, but would most likely be Valencia. Will have had 10 months more than the Challenger to prepare for the Defence.	Would be unhappy with this date, as could have spent more time in design, and would probably have a better more competitive boat.	Not included in a Deed of Gift Match. But this is fourth soonest option and may still allow the 34th America's Cup to be set up with the preliminaries ready to run in late in the 2009 European sailing season - probably in ACC V5 boats (used for 32AC)
July 2009	Date proposed by SNG as being the best suited to sailing a match in Valencia	Should easily be ready. Don't need to name venue until January 2008. venue would certainly be Valencia. Will have had 12 months more than the Challenger to prepare for the Defence.	Would be extremely unhappy with this date, as could have spent more time in design, and would probably have a better more competitive boat. Would likely Appeal.	Not included in a Deed of Gift Match. But this is the worst option and would preclude the 34th America's Cup getting underway before 2010. Would cause major issues in sustaining team and sponsor interest.

 

To see Societe Nautique de Geneve's latest submission to the Appellate Division http://www.sail-world.com/pdf/SNG_Reply_Brief_5-15-2008.pdf!click_here and to read Golden Gate Yacht Club's response http://www.sail-world.com/pdf/Final_GGYC_Brief_May_22_2008.pdf!click_here and then see Societe Nautique de Geneve's response to the Golden Gate Response http://www.kiwispy.com/AmericasCup/Reply%20Brief%20for%20Defendant-Appellant.pdf!click_here