What began as a legal ambiguity ended with a clear ruling: Club Náutico Español de Vela (CNEV) does not qualify as a proper yacht club under the terms of the America’s Cup Deed of Gift, and therefore cannot serve as the challenger of record for the 33rd America’s Cup.
On April 2, the New York Court of Appeals, the state’s highest court, issued a unanimous decision in favor of Larry Ellison’s BMW Oracle Racing and the Golden Gate Yacht Club (GGYC), rejecting the challenge presented by Ernesto Bertarelli’s Alinghi and Société Nautique de Genève (SNG). The ruling settled a 21-month dispute that had moved through multiple courts and revolved around who legitimately qualified to act as the challenger of record under the Deed of Gift.
The case hinged on a plain reading of the Deed of Gift’s eligibility requirements. The document specifies that a challenger must be “an organized yacht club of a foreign country, incorporated, patented or licensed by the legislature, admiralty or other executive department, having for its annual regatta an ocean water course on the sea, or on an arm of the sea, or one which combines both.” Judge Carmen Beauchamp Ciparick, writing for the court, emphasized that the Deed’s use of the word “annual” implies an established history of holding recurring regattas—events that have already occurred and will continue in the future.
Ciparick’s opinion concluded that CNEV, which was formed only days before issuing its challenge to SNG, had not demonstrated the requisite continuing history. At the time of its challenge, CNEV had never held an annual regatta, although it later claimed plans to do so. The club issued its challenge the day Alinghi won the 32nd America’s Cup; two days after that victory, CNEV and SNG published a mutually agreed protocol for the 33rd Cup that effectively gave Alinghi significant control over the race terms. GGYC alleged that CNEV was essentially a vehicle of Bertarelli’s, established to secure control of the next event, and responded by issuing its own challenge asserting CNEV was not a bona fide yacht club.
In closing her opinion, Judge Ciparick issued an implicit admonition: the America’s Cup should be decided on the water, not in the courtroom. “We wholeheartedly agree,” she wrote, urging SNG and GGYC to cooperate to preserve the Cup as “a perpetual Challenge Cup for friendly competition between foreign countries.” The ruling made GGYC the official challenger of record and set the stage for negotiations over how the 33rd America’s Cup would proceed.
Following the decision, both sides signaled a willingness to talk, though differences remained. Marcus Young, commodore of GGYC, wrote on April 7 that BMW Oracle was ready to meet “immediately” with Alinghi to negotiate a mutual-consent agreement for a conventional, multichallenger regatta in monohulls “as soon as practicable.” A week later, Fred Meyer, president of SNG’s America’s Cup committee, informed members that SNG had accepted GGYC’s Deed of Gift challenge to race one-on-one in 90-foot multihulls and invited GGYC to meet to define the match terms.
At a meeting in Geneva on April 23, the two delegations remained at odds. GGYC continued to push for a traditional multichallenger regatta, while SNG insisted on defending the Cup in a 90-by-90-foot format in 2010. SNG expressed openness to a multichallenger series if GGYC agreed to allow more lead time for other challengers; GGYC pointed to the court-imposed timeline for a Deed of Gift match in 90-footers, arguing that racing within those constraints made a February 2010 start feasible, while SNG preferred May 2010.
Several historic yacht clubs, including the New York Yacht Club, Royal Yacht Squadron, Royal Perth Yacht Club, San Diego Yacht Club and Royal New Zealand Yacht Club, urged both parties by open letter to negotiate a fair, multichallenger event that would serve the broader interests of sailing and the America’s Cup community. SNG reported interest from 18 syndicates in participating in a multichallenger series, even as economic pressures and the extended litigation complicated plans for a new Cup-yacht design. Initially, Alinghi had discussed 90-foot monohulls, then shifted proposals to smaller designs to reduce costs, and now pressed again for 90-foot multihulls.
If Ellison and Bertarelli cannot agree on a smaller boat and a multichallenger protocol, the Deed of Gift requires that Alinghi and BMW Oracle contest the Cup one-on-one in a best-of-three series in 90-foot multihulls. The Deed mandates that racing begin within ten months of the court’s decision, a schedule that would likely necessitate a Southern Hemisphere venue if the match begins in February. GGYC has been sea-trialing a 90-foot trimaran since October; Alinghi has kept details of its multihull quiet.
The court’s ruling resolved the immediate legal dispute by naming GGYC as challenger of record, but practical questions about boat design, format, timing and venue remained. What follows depends on whether the two camps can reach a negotiated protocol for a multichallenger event or proceed to a head-to-head Deed of Gift match in large multihulls.
This article originally appeared in the June 2009 issue.