Close, but not close enough

The America's Cup is due to go to the New York Supreme Court today

The America's Cup is set to witness the darkest hour in its 156 year history later this afternoon when at 2pm local time in New York, the Golden Gate Yacht Club is set to go head to head with the Societe Nautique de Geneve and the Club Nautico Espanol de Vela before Justice Cahn of the Commercial Division of the New York Supreme Court.

The opposing factions are supposed to be meeting informally 'for a coffee' at 9am prior to going into court, but whether skinny lattes will be enough to budge either side at this late stage seems unlikely.

The case being brought by the Golden Gate Yacht Club focusses on the Club Nautico Espanol de Vela, being an invalid Challenger of Record for the 33rd America's Cup. The GGYC's case includes much about the word 'having' - as in the Deed of Gift's key phrase - 'having as their annual regatta' - with reference to one of the necessary requirements of a Challenger of Record and whether 'having' in 19th century English parlance is past or future tense.

In fact as we have mooted in previous articles, taking a pop at the validity of the CNEV is more a case of the weapon BMW Oracle Racing has chosen to attack Alinghi with, for attempting to assume complete control of the 33rd America's Cup - of Alinghi allowing themselves the right to race in the Challenger selection series, to pick race officials, to change to a new boat without consultation, etc - as Alinghi outlined in their heavily defender-biased Protocol for the 33rd America's Cup, published back in July.

The creation of a Protocol document under the terms of the Deed of Gift for the America's Cup requires 'mutual consent' between the challenger and defender but to end up with such an Alinghi-favoured document, has led many of the Protocol's critics to believe that the Swiss defender has managed to make the CNEV effectively their puppet, the silent partner in what is supposed to be a negotiation.

While the signed-up challengers are understandably keen to get on with their campaigns and can rightly accuse Larry Ellison, BMW Oracle and the Golden Gate YC of holding the America's Cup to ransom, merely bringing the action has already resulted in Alinghi having to make numerous concessions to every challenger's benefit. Would this have happened without the threat of legal action.

The challengers, the defender and ACM have a forum in what is now known as the 'competitor's commission' and while this is used to air opinions, the Protocol document states that by sitting on this challengers do not get 'voting powers'. So Alinghi/ACM can listen to competitor's views, but are not obliged to act on them. And yet contrary to this, since the court action loomed, the defenders have been making great play on how paid-up challengers are being consulted about the make-up of the 33rd America's Cup. This culminated in an amendment to the Protocol in mid-September resulting in ACM no longer having the power to amend the Protocol and other rules without approval, nor to remove members of the Arbitration Panel and it modified ACM's right to refuse an entry and disqualify competitors.

Much of this is politics obviously. Alinghi and ACM have been understandably worried that the impending court action would prevent some of the more marginal challengers from signing up.

Nowhere has the politics been used more strongly than over the issue of the new boat. The Protocol document introduces new hardware for the 33rd America's Cup and specifies a boat 90ft long and with a 6.5m lifting keel so that draft can be reduced to 4m.

One of our lasting memories of the press conference to announce the new Protocol back in July was of Alinghi skipper Brad Butterworth being asked whether any designers (other than Alinghi's) had been involved in conceiving the new boat, to which he replied: "At the moment obviously Rolf Vrolijk and Grant Simmer are involved in that. And I’m sure they will be looking elsewhere. But we've had a little bit on just lately, so we haven't really given it much though. So those two guys will be key in getting this new rule sorted out." But he added: "Get all designers involved you never come up with anything. So we have to come up with a simple rule. Waterline length, sail area, displacement and the designers can go from there."

And yet since then challengers have also had the opportunity to have input into the rule for the new boat - provided they are signed-up. Again this is as much an incentive to get challengers to jump on the bandwagon as soon as possible as it is to demonstrate to BMW Oracle Racing that the rule isn't finalised and that Alinghi haven't been tank testing 90 footers for the past two years.

As part of their latest negotiations, Alinghi have gone a stage further and offered BMW Oracle Racing the opportunity to have a say in one fundamental aspect of the design of the new boat - its displacement - in the hope that this will further demonstrate that they haven't had a head start working on it. However the latest round of negotiations have come to a halt on Saturday with BMW Oracle arguing that this is not enough - they need to see the rule in its entirety. The irony of this is that the new rule will be made public at the end of October just nine days from now...

The latest round of negotiations was based on a letter from Russell Coutts, received by Alinghi last Thursday, that contained nine discussion points of which this was presumably one. BMW Oracle Racing maintain that these nine points are core to their case. As a spokeswoman for BMW Oracle Racing told us: "We have been very consistent in seeking a return to as close as possible to the rules of the last event. Contrary to Alinghi's claim of 'dismay', the challengers welcomed our Oct 18 proposal in a letter they wrote to Alinghi as showing we were in fact 'incredibly close' to a settlement. Alinghi continue to avoid any reference to our request to see the design rule or our ten offers of mediators in their release."

Alinghi maintain that some of these nine points introduced new demands, and that BMW Oracle are moving the goalposts indicating an unwillingness to reach a settlement. And this is where the negotiations are at present pre-Starbucks, pre-this afternoon's visit to the Supreme Court.

Judging from the present distrust between Alinghi and BMW Oracle Racing we suspect that the only way the two parties will reach agreement is by Alinghi altering the Protocol once more, broadening the 'mutual consent' process to include the challengers legally as a group, a system more like it was for the 32nd America's Cup. At present Alinghi/ACM typically write the rules and then their Challenge of Record has a certain period of time to object, but otherwise the challengers have no rights allowing them to demand changes from ACM/Alinghi, according to the Protocol as it is. In practice of course, this seems to not be the case - challengers do have a say - so then why not make this legally binding in the Protocol?

One reason Alinghi/ACM have only empowered the Challenge of Record, rather than the challengers as a group, is in a valient effort to streamline the decision-making process behind the event. As Brad Butterworth explained to us back in July: "It would be nice if all the teams got together and did a thing like they do with Formula 1, where they have ownership of it and whoever is the defender maybe ends up picking the venues. That would be nice. The problem is that all the teams fight among themselves too much. This edition [the 32nd] has been probably the worst in the challengers never getting together as a group. They were arguing among themselves all the time."

Unfortunately for Alinghi they have tried to introduce this measure at the same time as a Protocol heavily favouring themselves and this has now resulted in them being bitten hard.

What is desperately needed is an end play for the negotations. Alinghi need to know that if they do x, y and z then BMW Oracle will definitely drop their lawsuit. Hopefully the x, y and z are the nine points stated in Coutts' letter. But can this be sorted out over an informal coffee? We suspect not, but wth the clock ticking so loudly now it might be resolved by the end of the week. Neither party, we believe, wants the court case and particularly not the outcome of the court case which could see the Golden Gate YC win and get the right to challenge for an America's Cup held in accordance with the Deed of Gift in 90ft multihulls, or 115ft LWL schooners sometime more than 10 months from their challenge.

Everyone believes that the longer this goes on unresolved, the worse it will damage the 33rd America's Cup. No one more so than Michel Hodara, who has taken over from Michel Bonnefous as CEO of ACM, who told thedailysail yesterday: "Today it is about one thing: it is about certainty against uncertainly. There is one person, who has the key to certainty. That person is not Justice Kahn, because Justice Kahn is either going to say ‘You guys have to mediate and I designate a mediator’ - two to four months. Or he’s going to say ‘okay, thank you guys, I’ve heard you, now I’m going to reserve my decision’ - two to six months. Or he’s is going to order a trial, which could go on for years. Maybe he might decide on the spot. Unlikely, but possible. But then GGYC can lodge an appeal. Again uncertainty."

One of Coutts' nine points is that ACM organise a race in Valencia in 2009. This is one Hodara is most keen Alinghi concede. We hope that the other eight points are hammered out quickly.