Cupgate update

Hamish Ross and Brad Butterworth bring us up to speed with court cases and plans for the 33rd America's Cup

The scrap over the 33rd America's Cup between Ellison and Bertarelli/BMW Oracle Racing and Alinghi/the Golden Gate Yacht Club and the Societe Nautique de Geneve was due to enter a new phase yesterday with the deadline for the SNG to deliver its first response to the New York Supreme Court.

In a teleconference call yesterday afternoon between the press and head honchos at Alinghi and ACM, Hamish Ross, Alinghi's General Council told us: "Yes, today is the day we file a response to the Golden Gate’s injunction proceedings. I just want to make it clear here that there are two sets of proceedings - there are ordinary proceedings disputing the validity of the Spanish challenge and then more recently they filed injunction proceedings in relation to three items: one of course is to speed up the court process which obviously we agree to - and would have agreed if they had made the telephone call - and the second two items up are for us to name the water in which their so called ‘catamaran challenge’ would take place and provide them with the racing rules and regulations. We are due to file that this afternoon New York time in the New York court. The hearing on that particular motion will take place on the afternoon of 10th September. We might not have a decision on the 10th. The judge may reserve a decision and we may hear several weeks later."

So they want to hurry up proceedings too, but as to the other contents of the response Ross would not be drawn: "What are not focussing on this 'catamaran challenge' at all. What we are doing, both as Team Alinghi and ACM, is concentrating on a 90ft monohull to be raced in the America’s Cup in Valencia in 2009. Yes, we are forced to deal with this issue in New York and myself and the legal team in New York will deal with it. In the meantime the sailors and the designers of Alinghi and the executives at ACM will be working on the next America’s Cup."

Basically on 10 September, or soon after, Justice Herman Cahn of the Commercial Division of the New York Supreme Court will decide on whether or not the proceedings should be speeded up and if he does then the case is expected to be heard in October. If he doesn't the case might not be heard for several months yet.

The case

As to the court case itself, the GGYC are, as has been discussed a length previously, disputing the validity of the Spanish Challenger of Record. Hamish Ross rattles off the list demonstrating considerable precident for challenging yacht clubs that might not adhere to the letter of the Deed of Gift: "The issue they have raised in the court is a very simple one. It is whether the Spanish challenger is entitled to be accepted as a challenge under the terms of the Deed of Gift.

"And they have raised two complaints. One that it is a newly incorporated yacht club and second that it had its annual regatta after it challenged. With the first point and its new incorporation - you will remember the colourful Alan Bond, first challenged with Sun City Yacht Club after the 1977 AC, a newly created yacht club. We move forward to 1983, the Canadian Secret Cove YC, who of course had its annual regatta after it was accepted by the NYYC and we have correspondence confirming that from the NYYC. We move forward again to 1995, we have the Nippon Yacht Club, which was unincorporated. We have the Australia YC from perennial AC challenger, Syd Fischer and the Southern Cross YC, John Bertrand’s YC, winner of the America's Cup in 1983 which was incorporated after its challenge was accepted and probably the most significant one of all, is the Royal New Zealand Yacht Squadron, challenger in 1987, challenger in 1992, winner in 1995 and 2000 and lost to Alinghi on 2003 - it was never incorporated during that entire era.

"In terms of the history of the Cup and the precident the Trustees can look back to, it is very supportive with the situation of the Spanish challenge. We have to remember here that the Spanish challenge is not a sham or some new thing, they are represented by Desafio Espanol, the fourth place getter in the last America’s Cup, a truly credible team and one of the reasons they were selected as the Challenger of Record."

However the BMW Oracle Racing legal team counter that: "There is no legal precedent for SNG's acceptance of CNEV. SNG has given numerous examples of what it knows are irrelevancies. Those examples of past challengers were not Challengers of Record that were required to meet the mandates of the Deed of Gift. They were challengers accepted under a protocol agreed to under the mutual consent provisions of the Deed. Before any such agreed to protocol can change the explicit challenger requirements of the Deed, there must have been a valid challenge by a bona fide yacht club. That did not happen here. That is what the litigation is all about. In addition, no prior precedent can change the explicit terms of the Deed that expressly require a bona fide yacht club with an annual regatta. SNG has already admitted that CNEV is not a bona fide yacht club, but is a paper club created and controlled by the Spanish federation which itself is not a yacht club."

Anyhow....

Yesterday the message from Alinghi/ACM was one of conciliation between the waring factions. This was despite Hamish Ross' occasion stab at the American team and an another incident that took place at the recent Rolex Farr 40 World Championship that certainly will have ruffled feathers within BMW Oracle Racing.

Brad Butterworth explained his side of what happened: "It was all my fault... When we got to the Farr Worlds, I saw that Tom [Ehman, BMW Oracle Racing's Head of External Affairs and one of the main parties spearheading the fight against the Swiss team annexing the 33rd AC] was the Chairman of the Jury. So I went to him and asked him if he was going to step down from there because he had a conflict of interest - he had just written this dissertation against Alinghi and the principles of it, including myself and Ernesto [Bertarelli]. And he refused to.

"So I went to Geoff Stagg who runs the class and told him that I wasn’t happy about it and that he should do something about it. So we went through the Pre-Worlds and nothing happened. So I brought it up with him [Stagg] again before the Worlds started and nothing happened. So I wrote a note to him and gave it to him at the briefing for the Worlds and they had a meeting with the Executive of the class and when they came out of that meeting, they decided that Tom was going to stay on the jury, but any protest that involved Alinghi he would step away from and he would not be on the water judging. I had no problem with that. I disagreed with the fact that he should didn't withdraw from the jury, but I said that was fine with Geoff and we moved on."

So, yes, conciliation...

In the tussle between the two parties, both have been claiming for the last weeks that the other refuses to talk to them. However according to Hamish Ross, someone from Alinghi/SNG was supposed to be opening negotiations with someone else from BMW Oracle/GGYC last night, although at present it is not clear the exact individuals involved, although he confirmed, not surprisingly, it involves neither Bertarelli nor Ellison. "We have a preliminary discussion," commented Ross. "Because of a busy schedule and a very urgent nature of the meeting we are doing it by telephone conference call tonight as a preliminary meeting. These are talks about their protocol concerns."

Hurrah! In a scenario reminiscent of the Northern Ireland peace process, both Ross and Brad Butterworth confirmed that the discussions going ahead are not dependent upon BMW Oracle dropping their court case, although quite how much the Swiss can do about the American team's valid concerns about the heavily biased-towards-Alinghi Protocol for the 33rd America's Cup remains to be seen.

As Ross puts it - they have accepted the Spanish team as Challenger of Record for the 33rd America's Cup and can't back out of that agreement now. "If we refuse that challenge, the chance of us ending up in the New York Supreme Court with the Spanish as a plaintiff is very high. That is exactly happened with the first round of Mercury Bay [prior to the catamaran v Kiwi big boat charade in 1988]. So we had no choice but to accept that challenge. We are not interested in discussing the legality of the Spanish challenge, and we know deep down that is not what they [BMW Oracle Racing] really want to talk about that either. We all know that their concerns are nothing to do with the Spanish challenge.

"That said, we have said to them repeatedly that we are happy, as we have done with the other challengers, to sit down with them, discuss their concerns with the Protocol and then try and answer their questions and resolve their queries in the same way as we have done with the other five challengers that have now entered the game. We have a tentative date to start a discussion with them fairly shortly, just to talk about their concerns in exactly the same way as we have discussed the concerns of the other challengers. We would dearly like to be able to answer their concerns and for them to rejoin the America's Cup community as a fully entered competitor."

Meanwhile the existing Protocol for the 33rd America's Cup stands, as 'negotiated' with the newly formed Spanish yacht club and Challenger of Record, the CNEV, still includes many contentious clauses in it specifically stating that Alinghi/SNG/ACM are under no obligation to act on any discussions with the challengers, with the exception of the Challenger of Record.

The contentious clauses in the new Protocol include:

4.4 ACM may, at its sole and entire discretion, accept or reject any entry received

ACM shall appoint a Race Committee to conduct the races of the Event (7) and a Measurement Committee (8) and the Chief Umpire (9), although the Challenger of *Record has seven days to object to any of these appointments, referring the appointment to the sailing jury (5.4.a).

10.1 ACM shall establish and invite a Competitor's Commission which shall hold regular meetings,not less than two per year, as a forum to exchange information and to consult. The Competitors Commission shall have no voting powers.

10.4 The Competitors' Commission has no power to amend this Protocol or any other Applicable Documents

The Challenger of Record has an opportunity on 'a strictly confidential basis' to make recommendations to ACM on the draft Schedule before it is published (ie including the Challenger selection series) (13.2)

13.5 The Trials and Challenger Selection format shall be announced by ACM when announcing the Schedule. It may provide for the Defender an option to particpate wholly or partly at its discretion in the Trials and Challenger Selection other than the final between the two Challenger to select a Challenger for the Match.

14.1 ACM shall issue new ACC Rules on or before 31st December 2007 or such later date announced on 31st December 2007, as it may be reasonably necessary to complete review and revision of the ACC rules.... The new ACC Rules may provide for yachts having a maximum length overall of 90ft, draft while racing of 6.5m, a sliding keel system capable of reducing the draft to 4.1m.

Although... 17.1 ACM will give the Challenger of Record an opportunity (not being less than seven days or more than 14 days) on a confidential basis to make recommendations to ACM on draft Competition Regulations before they are published.

The Protocol doesn't specify that ACM will appoint the three members to the Sailing Jury and to the Arbitration Panel (which they did on 31 July) only that 'upon signing the Protocol, the Parties hereto have agreed in a separate document on the names of the Arbitration Panel members. The Parties will agree on the names of the Sailing Jury members no later than December 31st 2007.' If deadlock is reached between the Challenger of Record and the SNG over appointments to the Arbitration Panel there is separate body, the International Centre for Dispute Resolution, that can arbitrate.

So the process for making key decisions according to the Protocol is: ACM makes the decision, presents it to the Challenger of Record confidentially (the implication here is that the other challengers are not party to it) and then the Challenger of Record has 7-14 days to object.

Alinghi/ACM say that they have introduced this streamlined process to enable them to act in a more decisive way. Brad Butterworth has been most vocal about how badly discussions between ACM and the Challengers went throughout the 32nd America's Cup, repeatedly holding things up. But equally it can be read from the Protocol that Alinghi/ACM are claiming absolute power for the 33rd America's Cup - and this is at the core of BMW Oracle Racing's objections. Taking legal issue with Alinghi/SNG over the validity of the Challenger of Record in the NY Supreme Court is the only way in the mind of BMW Oracle Racing, given their experience in the past over Alinghi/ACM's intransigence, that they feel they can get this objection heard. Neither party wants a Deed of Gift America's Cup in catamarans next year.

Some success

Even if, as we all hope, it never gets to court, the GGYC action has already succeeded in making Alinghi backtrack. While according to the Protocol document, challengers appear to have no voice in determining the shape of the 33rd America's Cup (or they have a voice - the Competitors' Commission, but not one ACM/Alinghi are in any way obliged to listen to) ever since the Protocol was published we have been told that, no, despite what is stated in the Protocol, challengers in fact do have a voice. Getting a say in the shape of the 33rd America's Cup, in particular design input into the new 90ft monohull rule, is now the carrot to entice challengers to sign up. "Sign up and have your say," is the message. Meetings between Alinghi/ACM and the challengers who have signed up so far are starting this Friday and will continue on until the end of October, when the new rule for the 90 footer will be published (two months earlier than was announced when the Protocol was originally presented).

So if the challengers do have a say, then why doesn't this crucial nugget appear in the Protocol, thereby almost certainly averting the present court case? We put this to Brad Butterworth: "I’m not sure whether it would have averted anything. It is nothing new. In the past we have handled this same sort of thing where we talk to the other teams. Last time there were quite a few changes to the document along the way."

Contrary to what the Protocol document says, Butterworth maintains the view 'don't worry - it'll all be fine'. He cites the example of the ACM choosing race officials. "We have a great relationship with them. For sure the guys we had in the Cup were fantastic - the race officials, they were very professional. At all the events you go to...you see them at the Farr 40 Worlds regatta or the TP 52s or the Olympics and they are the same bunch of guys. And they get incredibly well trained in the Cup, and so the umpires, the sailing jury, they are all going to be the same, the PROs, they will all be coming out of ISAF and we’ll have the same thing as last time, so there is really no difference I can see other that we are short cutting a few things to get things done, because we have less time to do it."

Hamish Ross adds: "What we are being accused of by our friends across the water [BMW Oracle] is that things that might happen or could happen rather than things that have actually happened. I think you have to bear that in mind and to reflect is what they are fearing is fear itself." Yes, but this is the America's Cup and it still does not explain why the Protocol specifies what is perhaps a 'worst case scenario' rather than what we are told is the 'actual' scenario.

Ross cites the issue over Alinghi allowing itself to race in the challenger series. "With a new class coming in and each being able to only be able to sail one boat at a time - where does that leave the defender during the challenger series? Sitting out sailing one boat by itself? They talk about fairness - how is that fair for the defender? Indeed we are happy to put it to the challengers as a group - you make the choice: Either allow us to sail in some capacity in the challenger series with some built-in fairness rules or alternatively allow us to sail and do two boat testing when you can’t. Now had we chosen the latter you would have heard squeals between here and Valencia. So we chose the former as the fairest and most reasonable way to go and probably the best for the fans to produce some more interesting sailing but if they’d rather allow us to go two boat testing, I think we’d look seriously at that."

Butterworth spoke again about the change to the new 90ft monohull: "We could sail in the version 5 boats again and as you saw last time, I think we had a nice edge over the opposition. And everyone was tired of those boats and there has been talk of changing the boats by a lot of people since we won in Auckland last time. The inspiration between making these boats bigger and better is going back in time, when you saw those old Js sailing around and the characters inovolved like Lipton and Sopwith and Vanderbilt and titans of US industries. If you took that into the modern era from there to now, and had these carbon boats with unlimited sail area and big bowsprit out the front, dynamic to sail, hard to sail, no motorised gadgets on the them, they’re going to be athletic - seeing those lined up in a fleet race will be something quite special and something that will go down in the history of the Cup and for me it is inspiring.

"So the objective is to create a nice tight design box rule and I think it is going to be a great opportunity for new teams, because they’ll be able to come in, design a boat, we’ll limit the teams to sailing the boats one at a time, so you’ll only be able to sail in the races against each other. So we are going to limit the cost of this and it is going to be a real spectacle when they all get going."

Where now?

Back to the impending court case and Butterworth hopes he can woo his old mate Russell Coutts, the newly appointed BMW Oracle Racing skipper, into the 33rd America's Cup under the Protocol as it stands. "We have other teams that are entered and we are starting a procedure of talking to them and deciding on what is the best thing to make this next Cup bigger and better than the last one. The fact is that I would love to see the GGYC enter this competition because Russell sat out the last Cup. I thought that was a tragedy. He should be in this game. He is one of the best guys in the game and Larry should be running this thing. He is one of the titans of US business. He should be in this 90 footer. I’m sure he’d love to be in it. If we could somehow to convince them to stop this legal thing that is just an irritation really, a distraction and get on with the game of the America’s Cup like we have had in the past, it would be perfect and I would be the first to try and convince them of that."

With five challengers now entered ACM are currently in talks with, according to newly appointed CEO Michel Hodara, "about a dozen other challengers from many different countries including some countries already entered."

12 teams can be fitted into Port America's Cup, and Hodara confirms this is the case, but if there were more he says they could be accommodated elsewhere in Valencia. Hamish Ross is not so keen on this idea: "The problem is also not just the number of bases but as you add extra challengers it exponentially increases the complexity of the competition in terms of the timing and the number of officials." Ie: sign up now or you're in the commercial dock.