America's Cup - Lawyers and Sailors

While the lawyers play games in the courtroom, the sailors continue to train for the next America's Cup.

BMW Oracle Racing has announced its core sailing team for the 33rd America’s Cup. Joining skipper Russell Coutts in the accomplished afterguard are American John Kostecki and Australian James Spithill. Among the crew roster are nine sailors returning from BMW ORACLE Racing and 11 from Luna Rossa’s 2007 Italian challenge.

“We have assembled a fantastic team who are not only experienced and talented but who have winning attitudes and are great fun to race with,” said Skipper Russell Coutts. “I have sailed with most of these guys on different projects over the years, and am really pleased to have had the opportunity to bring them together into one America’s Cup team. We are looking forward to getting out and doing some racing.”

Sailing Photos: BMW Oracle / Gilles Martin-Raget

About the Americas Cup Lawsuit (from the Golden Gate Yacht Club)

"Backgrounder to negotiations and court case for the 33rd America’s Cup

-- Summary --

Over the last seven months the Golden Gate Yacht Club (GGYC) and others have been very intensively involved in efforts to address serious issues of unfairness posed by the proposed protocol for the 33rd America’s Cup.

Concerns about the protocol turned on the unprecedented advantage and level of control it gave the defender. GGYC has always said that it would have welcomed a protocol like the one used so successfully in Valencia for the last Cup. We believe nearly all other America’s Cup competitors would agree. We have never understood why the defender felt the need to radically rewrite the rules of the America’s Cup. But in the interests of finding a speedy resolution we agreed to significant compromises and have made several offers of a negotiated solution supported by other challengers.

In the correspondence included with this backgrounder we quote a letter from seven syndicates from the last event (of whom only two have re-entered) saying that the protocol was a threat to the survival of the modern America’s Cup. We agree.

We were disappointed Alinghi abruptly ended attempts to find a resolution, but we remain committed to returning the Cup to a genuinely competitive event.

-- Time line --

• July- August: First efforts to address protocol
• July 5: Accepting a challenge from CNEV, Alinghi introduces a new protocol. This causes concern among syndicates because of the defender’s unprecedented control over the event.
• July 11: GGYC files a formal challenge for the Cup, on the basis that CNEV is not an organized yacht club as required by the Deed, and that CNEV’s challenge amounts to self-dealing by Alinghi with a paper entity.
• July 13: Louis Vuitton, a major partner in the Cup for 25 years, withdraws from
• the event. The company’s long-time AC manager, Bruno Trouble, will later
• publicly confirm his opposition to the new protocol and support for the GGYC
• court action.
• July 16: Six syndicates from the previous event (Luna Rossa, Mascalzone Latino, Areva Challenge, United Internet Team Germany, Emirates Team New Zealand and BMW ORACLE Racing) write to CNEV insisting that they stand down as the Challenger of Record, and stating that the protocol puts the very survival of the America’s Cup at risk. They describe it as the “worst text in the history of the America’s Cup.”
• July 19: SNG accepts a challenge by Royal Cape Yacht Club (Shosholoza), ignoring GGYC’s July 11 challenge.
• July 20: GGYC initiates a legal challenge in the New York State Supreme Court where the Cup’s Deed of Gift is registered.
• July 23: SNG rejects GGYC’s challenge, stating that CNEV’s challenge is valid.
• July 25: A seventh syndicate, Victory Challenge, signs the July 16 protest letter against the protocol. Of the seven signatories to this letter only two will re-enter for the next event.
• August 3: Vincenzo Onorato, of Mascalzone Latino, puts up a compromise proposal for a revised protocol to get the event back on track. GGYC supports this. Alinghi rejects this without discussion.
• Late August: Seahorse, in its September editorial; describes the protocol as, “so provocatively one-sided as to have potential as a spoof.”
• September: Attempts to negotiate with Alinghi
• September 10: Following a request by GGYC, the New York State Supreme Court grants an early hearing date for 22 October.
• September 15: GGYC writes to Alinghi offering the names of ten potential mediators, and invites Alinghi to name a mediator of its choice. Alinghi do not respond.
• September 18: Emirates Team New Zealand offers to provide a mediator. GGYC accepts this offer. Alinghi do not respond.
• September 20: Alinghi announces a protocol amendment. This addresses some concerns about the Arbitration Panel, but in all other respects leaves Alinghi in control of the event.
• September 20: Alinghi issues a press release saying it has “again appealed” to GGYC to settle. Two hours later it writes to GGYC rejecting mediation.
• October: Progress to court and discussions with challengers
• October 3: ACM issues a press statement saying they may have to postpone the event. Individual challengers complain privately they were given no forewarning.
• October 10: Alinghi agrees to vary the displacement of the new boat to, at least in principle, negate Alinghi’s lead-time advantage in design development, but declines to enable this to be accurately checked, saying the design rule can only be seen by teams after they commit to the terms of the protocol.
• October 17: GGYC writes to challengers offering further compromises around nine key points. The following day the challengers respond, writing to Alinghi they are “incredibly close” to achieving a resolution.
• October 19: GGYC confirms that if potential challengers can ensure Alinghi has not retained an unfair advantage in developing a boat then other outstanding points are close to resolution. Alinghi do not respond.
• October 22: The case comes before Justice Herman Cahn.
• October 23: Representatives of Alinghi and GGYC meet privately at the New York Yacht Club to explore possible settlement options and agree the nine-point compromise offered by GGYC, with further suggestions from the challengers, made settlement possible.
• October 25: GGYC delivers a letter to the challengers and Alinghi detailing the nine-point compromise, further modified in accordance with suggestions by the challengers.
• October 26: GGYC issues a press release saying that if Alinghi reveal the class rule and allow the American team to confirm that it is fair the other issues look to be readily resolvable.
• October 28: Shortly after midnight on Sunday morning, Lucien Masmejan, Ernesto Bertarelli’s lawyer, sends an email saying “since [Tuesday] I did not hear from you” and “the offer we made to you in New York to settle…is no longer valid.”
• October 31: Alinghi reveal the design rule and at the last minute agree to make it public. GGYC enters into due diligence to ensure this new rule does not give the defender a retained unfair advantage.
• November 1: GGYC representatives meet by phone with Alinghi and a challenger who, as a group agree that seven out of the nine points now appear to
• be resolved, and that the two outstanding points should be easy to resolve quickly. Alinghi undertakes to come back with a response on November 5.
• November 4: President and vice-president of the Spanish Sailing Federation, and the two top officers of CNEV, Gerardo Pombo and Manuel Chirivella, tell Spanish reporters that CNEV is not a yacht club but a “legal adjustment”, created because they were told to do so by Valencia's authorities, and told by ACM to do so in secret.
• November 5: Alinghi does not reply to GGYC as had been promised on November 1, despite several attempts to reach Lucien Masmejan.
• November 7: Russell Coutts phones Lucien Masmejan to ask whether Alinghi are serious about settling. Masmejan says they are, but says that while they agree to most of the nine points they will not agree to any Protocol amendments, only to a letter of agreement. Without amendments to the Protocol any such agreement would not be binding on Alinghi. GGYC suggests meeting in Geneva to work through this issue and finalize the agreement.
• November 8: GGYC continues to pursue an out of court agreement with the support of several other challengers. GGYC asks why the Competition Regulations are going to be issued in the middle of these negotiations on the afternoon of the 8th, and are told by Lucien Masmejan that ‘they can be amended if necessary.” GGYC sends draft protocol amendment language as per SNG’s earlier request.
• November 9: GGYC representative speaks with Lucien Masmejan regarding the remaining points and he states that the proposed protocol amendment language looks good, and that he will discuss the issues with his team on the weekend, and call on Monday, November 12. He says GGYC should send him any comments or concerns regarding the Competition Regulations. Lucien Masmejan suggests meeting in Geneva the following Tuesday.
• November 12: In response to efforts to contact him during the day, Lucien Masmejan calls at 6:30pm, and in response to a GGYC request says he will set up a meeting with Alinghi designers and sailors to discuss the sporting issues the following evening. Meeting to include Russell Coutts, Brad Butterworth, Grant Simmer and Tom Schnackenberg.
• November 13: In an early morning telephone call, Lucien Masmejan confirms that progress is promising, and agrees to talk again at 2:00pm to set up an evening conference call. However, he does not call as agreed. GGYC leaves messages, and finally Lucien Masmejan calls at 3:45pm and says he is “sorry” and that “SNG has sent a letter to GGYC and the decision has been made to stop all settlement discussions”.
• November 16: A majority of challengers in the next America’s Cup formally joins with the Golden Gate Yacht Club to urge Alinghi to accept a joint proposal covering all outstanding points on the rules so that the event can go ahead in 2009. GGYC confirms it will drop its court case immediately if Alinghi accepts the proposal which has been worked out with the challengers.
• November 16: Alinghi rejects the joint proposal.
• November 22: ACM announces the postponement of the Cup.
• November 27: New York State Supreme Court rules in GGYC’s favor and recognizes GGYC as the Challenger of Record. GGYC writes immediately to Alinghi seeking to negotiate a mutual consent challenge. Alinghi do not respond to this letter.
• December: GGYC seeks to negotiate a mutual consent regatta
• December 3: GGYC hosts a meeting of 14 potential challengers in a joint effort to return to a conventional America’s Cup regatta. All commit to working together to get the event back on track.
• December 4: GGYC presents to the defender a formal proposal for a conventional, mutual consent 33rd America’s Cup protocol with the support of several challengers. Alinghi do not formally respond.
• December 6: GGYC publicly calls for the defender to respond to GGYC’s requests for urgent talks. Spokesman Tom Ehman says, “Time is running out.”
• December 10: Representatives of the defender and GGYC meet in New York. Alinghi presents a new long-term “vision” for the event and declines to enter into
• specific negotiations on the earlier GGYC proposals. GGYC repeats calls for urgency in beginning negotiations if a mutual consent regatta is to be possible.
• December 11: Having still heard nothing from Alinghi, GGYC makes a renewed public call for the defender to confirm whether it will agree to a mutual consent regatta so that planning could go ahead.
• Late December - January 2008: new efforts to re-open the case launched by SNG/Alinghi and progress to Court Order
• December 27: New lawyers appointed by Alinghi file papers seeking to “renew and re-argue” the case before the New York State Supreme Court.
• December 29: Having had no response from the defender on entering into negotiations on a mutual consent challenge, GGYC announces commitment to a challenge under the rules of the Deed of Gift. Club also confirms, should they win AC 33, GGYC’s commitment to host a conventional 34th America’s Cup in Valencia in 2011, with fair and transparent rules agreed by mutual consent with the other challengers.
• January 14: Justice Cahn meets in court with lawyers for both sides and schedules a hearing for January 23 to hear arguments on SNG/Alinghi’s latest motions.
• January 23: Justice Cahn holds oral argument on SNG’s plea to reconsider his decision of November 27, 2007. GGYC argues that Justice Cahn’s decision was correct in all respects and files papers in rebuttal of SNG arguments Justice Cahn gives SNG/Alinghi until Monday, January 28 to file a written response to those papers, and says he will rule on the motions “soon.” If he approves the motions, the case will be re-opened and both sides given opportunity to make new submissions and arguments before the court at a subsequent hearing. If he denies the motions, it is expected he will sign an order giving legal effect to his 27 November decision at the same time or shortly thereafter.
• January 29: GGYC writes in response to SNG’s arguments of the previous day.
• March 6: Emirates Team New Zealand launches legal action against SNG, Alinghi, ACM and Ernesto Bertarelli seeking compensation for delays to the event. ETNZ says the defenders “abused their competitive power to stifle other teams," and refused to accept a “completely reasonable” settlement offer from GGYC. The action says SNG has breached its duties as Trustee. Lucien Masmejan rejects ETNZ’s case as “totally without merit”.
• March 18: Court Decision Re-Confirming Validity of GGYC Challenge

March 18: Court Decision Re-Confirming Validity of GGYC Challenge:

Justice Herman Cahn of the New York State Supreme Court today issued an order confirming the validity of Golden Gate Yacht Club’s challenge for the 33rd America’s Cup and rejected a late-stage bid by the defender to re-argue the court’s earlier ruling in GGYC’s favor.

“We are very pleased with this decision. The Court has ruled that our challenge complied fully with the Cup’s Deed of Gift, and we are now keen to keep moving forward towards the next regatta,” Tom Ehman, the club’s spokesman said.

In its order today the Court reconfirmed its November 27 decision that GGYC was the valid challenger for the Cup.

The defender, Societe Nautique de Geneve (SNG), had filed a motion to re-argue that decision based on a new claim that the American club’s challenge was invalid under the Deed, but this was rejected by the court.

A Deed of Gift match is being held as the defender made it clear it did not wish to take up GGYC’s offers made before and after the court’s ruling in November of a conventional regatta with rules agreed by mutual consent and involving all teams.

- Golden Gate Yacht Club"

March 18 2008 - Response from Société Nautique de Genève regarding the March 18 ruling:

In response to New York Supreme Court Justice Herman Cahn’s order designating Golden Gate Yacht Club (GGYC) as America’s Cup Challenger of Record replacing Club Náutico Español de Vela (CNEV), lead counsel for the defending yacht club, Société Nautique de Genève (SNG), Lucien Masmejan, issued the following statement:

“Following today’s court order, Larry Ellison has eliminated the competition and gained access to the America’s Cup Match, a feat BMW Oracle Racing has never been able to achieve on the water. While we are disappointed with the outcome of this court order and believe that the matter of GGYC’s certificate of challenge wasn’t properly addressed, we have decided not to appeal the decision and we look forward to getting the fight back on the water and meeting BMW Oracle Racing on the start line of a Deed of Gift Match in July 2009,” Masmejan said.

March 19 2008:
In accordance with Justice Cahn’s memorandum decision of yesterday, the Société Nautique de Genève, America’s Cup defending yacht club, reaches out to the Golden Gate Yacht Club with a proposal for a mutual agreement on the race dates for the 33rd America’s Cup in a bid to move the sport away from court and back to the water…

Click here to see the letter.

Response from Alinghi boss Ernesto Bertarelli regarding the America's Cup Legal Battle: “Let’s settle this on the water”.

Good idea Ernesto.

- YachtPals Crew for YachtPals.com