America's Cup: Luna Rossa complaint on AC40 queue jumping is dismissed

American Magic - AC40 - Day 2 - March 4, 2023 © Paul Todd/America's Cup

The Arbitration Panel for the 37th America's Cup has dismissed a complaint by Italian Challenger Luna Rossa Prada Pirelli, against Emirates Team New Zealand's event manager America's Cup Event Ltd.

At issue is the order over which America's Cup teams are allocated AC40 build slots with the sole builder McConaghy Boats in China. The Protocol governing the 37th America's Cup states that the AC40's, which can be used as training or test boats by the America's Cup teams, and for the Youth and Womens America's Cup events, shall be allocated in order of entry.

The Italians said they were only made aware of the "queue jump" after American Magic made an announcement on its social media channels on February 24.

The Defending Club, Royal New Zealand Yacht Squadron is required to publish a list of Challenges accepted as follows:

Following the close of the Entry Period on 31 July 2022, here is the current List of accepted Challengers received in addition to the Challenger of Record, the Royal Yacht Squadron/Ineos Britannia. Such Challengers are listed in the order in which their respective challenges were received by the Defender: 1. Société Nautique de Genève/Alinghi Red Bull Racing 2. Circolo della Vela Sicilia/Luna Rossa Prada Pirelli Team 3. New York Yacht Club/NYYC American Magic.

Luna Rossa's complaint was that American Magic, who were a later entry, had obtained an AC40 ahead of the Italian team. Previously the Italians had commented that they had little option but to build their own prototype yacht as there was long waiting list for AC40 hulls.

The teams are allocated two consecutive build slots in order of entry, but they may swap one of those slots with another team without having to make any declaration to other teams. Emirates Team New Zealand are believed to have swapped one of its building slots with Challenger of Record INEOS Britannia. The Kiwi team is recorded as having AC40 hulls AC40-1 and AC40-3, while INEOS Britannia has hull AC40-2.

American Magic made a submission to the Arbitration Panel indicating that Alinghi Red Bull Racing had exchanged "legal ownership of Hull #5 and Hull #7".

Alinghi Red Bull Racing's submission, made last week, confirms that a team became the legal owner of the next two build slots, as soon as it had paid the first installment "in Article 9 and Appendix 1 of the Standardised AC40 Build Contract". ARBR said it had entered into an agreement with American Magic "to dispose of the property of Hull #5".

The Arbitration Panel found that teams were allowed to come to private arrangements over ownership of AC40 hulls, effectively opening the way for building slots to be exchanged between teams, and that America's Cup Event Ltd had met its AC40 Allocation obligations.

American Magic's sailing operations boss, Terry Hutchinson said last week that the New York Yacht Club team would be running two AC-40s - one as a test boat or LEQ12. It is not known where they stand in the AC40 queue for their second boat.

Luna Rossa was directed to pay costs of €10,000.

The case is the second determined by the Arbitration Panel. The first was also brought by Luna Rossa, which concerned crew sailing aboard Surrogate Yachts owned by third parties, who had no connection with the 37th America's Cup. However a subsequent amendment to the Protocol made the matter moot. Costs were shared by the parties with Luna Rossa being ordered to pay €5,500 and the Challenger of Record and Defender to pay €2,750 each.