America's Cup Legal - the last 31 months in a blur



8:30 PM Sun 7 Feb 2010 GMT
'The penultimate race in the Match that started it all - 32nd America’s Cup - Final Match - Day 6 - Alinghi vs Emirates Team New Zealand' Photo: Gilles Martin-Raget

There is little doubt that the many Court actions over the 33rd America's Cup have been a major turn-off for the sport and sailing fans generally.

In a couple of days the sport will see a sailing match of the likes that has never been seen before and probably will never see again. Two of the highest performance yachts will square off against each other in a fascinating contest, conducted under the bare minimum of sailing rules.

To understand quite how we all arrived at this situation, here's a quick recap:

When Alinghi crossed the finish line, just one second ahead of Emirates Team New Zealand in early July 2007, the fate of the 32nd America's Cup was sealed and the circus opened for the 33rd Match.

The Swiss Defender, Societe Nautique de Geneve, promptly accepted a Challenge from a hitherto unknown Spanish yacht club, Club Nautico Espanol de Vela, which had been formed two weeks previously, and had just five members. The Club, which had its offices in the Spanish team building in Valencia, had never run a yacht race.

The intention of the Swiss Defender was to have a yacht club that was based in the same host city as the Challenger. Under the 19th century Deed of Gift which governs the America's Cup, which is a 'Challenge Cup', the next Match is set up by the Club which has just won the America's Cup who accepts a Challenge from a yacht club of a different country. There are a couple of basic criteria which a challenging yacht club must meet in order to be eligible as a yacht club. But more of that later.

Due to Spanish politics, or deference, there had been significant issues with finding a Club who would be represented by the Spanish Team Desafio Espanol in the 2007 Louis Vuitton Cup. It was felt that one club should not be placed ahead of the others for such a prestigious role. So the Challenge was made in the name of the Spanish Sailing Federation (RFEV). Although that appointment was not strictly kosher in terms of the Deed of Gift, which requires Challenges to be made by yacht clubs, the Challenge in the name of RFEV, was accepted by the other Challengers and Defender.

The Challenger for the 32nd Match was Golden Gate Yacht Club, which fronted for the other Challengers who operated under the aegis of a Challenger Commission.

Valencia, was selected as the venue for the 2007 America's Cup - the first Defence by the landlocked Swiss Club Societe Nautique de Geneve, which normally races on Lake Geneva. They wished to have their second Defence in the same port, which has expended millions on major development of the port to accommodate the America's Cup contestants.

The major point of grief for other America's Cup teams - with the acceptance of the Challenge from CNEV was not so much the standing of the Club, but the Protocol they signed with the Swiss, which gave virtually all the rights the Challengers enjoyed under the Deed of Gift to the Defender.

The Swiss had masterminded the organization of the 32nd Cup - which had returned a healthy profit (of which they took half and the balance was shared amongst the 12 Challengers in varying proportions). SNG wished to extend this sailing festival, and at the same time cut costs of competing , by restricting the Challengers to building just a single boat to a new rule, and for the Defender to enjoy the unprecedented opportunity to sail in the Challenger Selection Series.

This Protocol cut to the very roots of what many understood to be the basis of the America's Cup - which was in essence a Challenge Trophy, for which the Challenger and Defender did not meet until the first race of the Match.

While many were unhappy about what had happened, few were in a position to do anything about it.

That fell to the previous Challenger of Record, Golden Gate Yacht Club, and their team headed by founder of Oracle Corporation software entrepreneur, Larry Ellison who had the financial wherewithal to take on the Swiss in what could be along legal battle in the New York courts who administer the Deed under which the America's Cup was donated for competition by the owners of the yacht America, which won a race around the Isle of Wight, in England in 1851, for the Hundred Guinea's Trophy, which became known as the America's Cup.

While Swiss had most of the legalities covered off with their innovative Challenger, they failed on two minor counts - which were sufficient to allow Golden Gate to get its foot in the legal door.

About a week after the Swiss had accepted the Challenge from CNEV, Golden Gate lodged their own - which meant they were the second Challenger - and would become the legal challenger if the one from the Spanish were declared to be invalid.

Understanding that their Challenge would not be to the liking of the Swiss, the US club challenged with the biggest yacht possible under the Deed of Gift being 90ft on the load waterline length (and also 90ft wide).

Having handed that piece of paper across the desk at Societe Nautique de Geneve, the legal process to unseat the Spanish club began.

A careful read of the 1887 Deed of Gift, revealed that the Challenger was short on a couple of points.

The Deed said that 'any organized yacht club ..having for its annual regatta on an ocean water course..' was entitled to make a Challenge for the America's Cup.

The Americans argued that CNEV was not in fact organized as a yacht club, and interpreted the meaning of the word 'having' as a past action, in other words it must already have held an annual regatta before it could make a valid challenge.

CNEV and SNG argued that 'having' also had a future tense meaning and that they could hold an annual regatta before the Match was sailed, and they would be in compliance with the Deed of Gift.

Interestingly when the Swiss club had challenged for the America's Cup in Auckland in 2000, they had to appear before the Arbitration Panel established for the 2003 America's Cup, and that Panel took a different view of the word 'having' telling the Swiss that if they went away, held a regatta on the sea, and then came back and applied for acceptance it would be granted - which duly happened.

However the New York legal system did not see matters that way and on Appeal to the New York Court of Appeals, Golden Gate Yacht Club's view of the Deed of Gift was upheld. The Court of Appeal in Albany, decided that CNEV should have had held an annual regatta before they could Challenge. They had not done so, and their Challenge was ruled to be invalid.

As the second Challenger, Golden Gate Yacht Club was now the Challenger of Record.

Many expected the Swiss to just accept their challenge, revise the contentious issues in the Protocol, to the satisfaction of the US club, and then roll into a multi challenger event, which was already partially organized - with 20 Challenges on the table.

Instead the Swiss decided to take on Larry Ellison, and his skipper, Russell Coutts who had won the America's Cup for Switzerland in 2003, but did not sail again for Ernesto Bertarelli after a bitter contractual dispute in 2004, which saw him leave the Swiss team.

With a strong competitive background in multihulls, Ernesto Bertarelli believed he could beat Ellison and Coutts. The multi challenger event was canned, the Golden Gate Yacht Club's Challenge was taken at its word - and the33rd Match on 90ft (LWL, about 115ft overall) multihulls was on.

There followed around a dozen trips to the New York Supreme Court by the respective legal teams on various points to do with the conduct of the Match. All but one of these related to the protection of the Challenger's rights under the Deed of Gift, and were won by Golden Gate Yacht Club. The one issue that was lost, was on the right of the Defender to set the Rules for the Match which included the use of engine power to run hydraulic winch systems, eliminating the need for teams of grinders aboard the yachts.

This loss actually became the Challenger's gain as it allowed them to get much better advantage for their wingsail, which was already on the drawing board. And, that project became a late reality.

All of which brings us to the present time, where on the 8 February 2010, weather permitting, the sailing world will see an America's Cup Match involving just two teams, between whom no love is lost, and sailing two of the mightiest racing yachts ever launched, in a best of three series for the most prestigious trophy in sailing.




by Richard Gladwell




Newsfeed supplied by