Thursday, April 2, 2009

Yachting Litigation

In an appeal to determine eligiblity criteria for the Challenger of Record in the America's Cup, the New York Court of Appeals reversed the Appellate Division and reinstated the orders of the Supreme Court. The litigation had its genesis  in the aftermath of the 32nd competition held on July 3, 2007. Societe Nautique De Geneve (SNG), a Swiss yacht club, had won the 31st competition and sucessfully defended its rights to continue as Cup trustee in 2007. Club Nautico Espanol De Vela (CNEV), a Spanish yacht club, submitted a Notice of Challenge that was accepted by SNG.

The Deed of Gift that the race operates under "provides that once a Defender accepts a challenge, the two yacht clubs may negotiate and set the conditions for the next America's Cup competition through mutual consent." A California yacht club Golden Gate (GGYC) disputed the validity of CNEV's challenge alleging that CNEV was not a bona fide yacht club. SNG rejected that contention on the theory that the challenge had already been accepted. The matter proceeded to arbitration that GGYC rejected in favor of this litigation.

Here, the court interprets the deed of gift to accept the GGYC position that it was the proper Challenger of Record. CNEV failed to show that it met the eligility requirements in the deed of gift:

It has been posited that the right to act as trustee of the America's Cup should be decided on the water and not in the courtroom. We wholeheartedly agree. It falls now to SNG and GGYC to work together to maintain this noble tradition as 'a perpetual Challenge Cup for friendly competition between foriegn countries.' 

 (Mike Frisch)

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