Bootsnboats


Truth and power
August 30, 2007, 4:25 pm
Filed under: America's Cup, Diary

The truth is a very powerful weapon in an armoury of deception (one of my little sayings) and everyone may need to be well protected over the coming couple of months as the lawyers square up to each other in the case of Golden Gate Yacht Club versus Société Nautique de Geneve. Michel Hodara, the chief operating officer of America’s Cup Management, who is increasingly fronting for an organisation in which CEO Michel Bonnefous said he would be taking a less high profile role, has been vindicated when he said that the timeline as being propounded is in fact later and longer than at first thought.

But it may not be too much longer, if opinions about Justice Herman Cahn, from those who claim to know, are correct. He apparently has a reputation for being a no-nonsense, cut to the chase kind of guy. If there is any flannel or irrelevant thinking from either side, expect him not just to be impatient but ruthless.

So some paperwork will be delivered by 5 September and there will be a hearing on 10 September. This is not expected to be a careful examination of the arguments, just depositions to help Justice Cahn decide if there is a case to be heard at all and if it is in the jurisdiction of his court. Best estimates say that any angry confrontation would not be until October.

By the way, there has already been an angry confrontation in the not so wonderful city of Copenhagen. It has been cold and miserable for the Farr 40 worlds, but some heat was injected from outside when Ernesto Bertarelli’s Alinghi asked that the chairman of the jury, Tom Ehman, should step down. As Ehman is at the centre of the litigation by GGYC, at the behest of BMW Oracle’s Larry Ellison, Alinghi, as a competitor, felt there could be some conflict of interest.

Ehman did not step down, doubtless because he thought that his four co-jurors would never allow themselves to be manipulated in what could be seen as vindictive behavour. But Bertarelli’s skipper, Brad Butterworth, is incensed and has written to the International Sailing Federation (ISAF) with a formal complaint.

The stage is being set for a bitter battle. Expect SNG (Alinghi) to have a formidable team of lawyers which will assert that the event already has a mechanism for resolving disputes. It is called the Arbitration Panel, appinted by ACM, and may well deliver an opinion prior to any court hearing. SNG may also say that any quarrels over mutual consent have been covered by the Club Nautico Espanol de Vela, the chosen Challenger of Record, having signed up to the new protocol – as,  by implication, have challengers from South Africa, United Kingdom, New Zealand and Germany.

Which leaves the case of the validity, under the terms of the Deed of Gift, of the CNEV challenge. That will doubtless give rise to long arguments over previous challenging clubs, not least the Mercury Bay and the SNG. But they went ahead, and so have the power of precedent. What everyone could do with is a tutorial on trust law in the New York Supreme Court. That is something which Justice Cahn is expected to give the highest priority.

Roll on the Rugby World Cup.  



Ellison the good guy?
July 21, 2007, 12:48 pm
Filed under: America's Cup, Diary, Tosh

If it wasn’t serious it would be funny. The Golden Gate Yacht Club versus the Société Nautique de Géneve? That is what is on the documents presented to the New York Supreme Court, but this is a battle of two billionaires, both at times characterised as billionaire brats, with the unlikely side-effect of the San Francisco-based Larry Ellison, boss of the Oracle America’s Cup challenge, grabbing the white stetson of the good guy and planting the black hat of the villain firmly on the head of Switzerland’s Ernesto Bertarelli, boss of the Alinghi syndicate which has just successfully defended the cup in Valencia.

As the Spanish city prepares to announce that it will host America’s Cup 33 in July of 2009, its mayor, the recently -re-elected, irrepressible, baritone-voiced Rita Barbera, must be hoping that there is a penalty clause written into a contract worth over €100m if Alinghi and its unloved executive arm, America’s Cup Management, fails to deliver.

 There was near-universal condemnation of the terms of the protocol for the next event when it was announced a couple of days after Alinghi beat Team New Zealand 5-2 in early July of 2007. The Spanish press ripped into its national federation for being not just raped but dropping its own trousers and obligingly standing with its legs apart in agreeing to the terms which Alinghi and ACM had demanded.

Most of the rest of the challengers were wringing their hands – though it is clear that the South Africans are equally willing to do Alinghi’s bidding, the Chinese have other fish to fry, and the British Origin team is standing back in case a mediator is needed.

So a meeting  was held in Valencia which included some of the big hitters like Patrizio Bertelli of Prada/Luna Rossa, Grant Dalton and Jim Farmer of TNZ, Dawn Riley of Areva, Alessandra Pandarese representing Vincenzo Onorato’s Mascalzone Latino, Tom Ehman for Ellison and the Germans. But, instead of just saying ‘what can we do’, a stiff letter drafted by Bertelli’s Spanish lawyer Luis Sainz was tweaked, approved and sent to both the Club Nautico Espanol de Vela, Berterelli’s collaborators, and the SNG.

What Ehman did not tell the meeting was that GGYC was intending to lodge a second challenge, under the terms of the third Deed of Gift which govern the running of the event. This is the 1887 version and is in the jurisdiction of the New York Supreme Court, having been lodged there by the New York Yacht Club.

A delegation duly flew to Geneva, a local legal processor accompanied them to the SNG clubhouse and handed the document to the secretary general (photographing the procedure) and went back to Valencia. The challenge was under the strict trerms of the 1887 Deed, specifying a yacht with a 90-foot load waterline length, a 90-foot beam (almost certainly a catamaran and, yes, design work is well underway) and in 10 months.

 There was no word from Alinghi, ACM or the SNG until the SNG announced it had also accpted a challenge from the Royal Cape Yacht Club on behalf of Shosholoza and under the terms of its latest protocol.

That was enough for Ellison, who then immediately instructed the law firm of Latham & Watkins to make its move. Not the San Diego office, which had acted in 1987 and ’88 on behalf of the San Diego Yacht Club in its fight against Michael Fay ahead of the big boat versus catamaran fiasco. This was the New York office operating on its own ground.

The acceptance of the South Africa challenge was manna from heaven for GGYC as it was clear evidence of a deliberate freezing out of Ellison and a hint that, even if the pressure on the CNEV to stand down was succesful, ACM had a second poodle on a lead. Whether that pressure has had any effect may be seen after a meeting on Thursday 26 July of the board of CNEV’s directors. Apparently the King of Spain is less than impressed, other Spanish yacht clubs are taking every opportunity to stick it to a CNEV that has yet to do anything other than try to organise an Optimist regatta in Santander, and is generally perceived to have been less macho than is acceptable to a nation that worships bullfighters.

Estimates are that it could take three to four months to extract a decision from the finest legal minds that New York has to offer (say October or November) and if it went GGYC’s way that would imply a 2008 cup in August/September with the first Valencia Formula 1 grand prix slated for October next year. It would also call into question the ability of the Swiss to put together the best boat, which would have to be designed, built and equipped only with materials available in Switzerland. Perhaps Andy Steiner could build the mast, and Décision could build the hulls, but winches, sailcloth and electronics would be more difficult.

SNG has 30 days to respond, that is by 19 August, and needs to juggle its relationship with Valencia with its feeling about how strong is its own position and how stubbornly it wants to keep total control. Ellison clearly wants to create enough leverage to shoehorn Bertarelli, however reluctantly, into negotiations. He would then be the white knight who wants to see an event board made up of two directors appointed by the challengers, two by the defender and those four able to appoints a fifth as chairman. He wants the appointment of people like jury members, event director and race officers to remain independent. And he will want to see the whole of the challenger programme returned to the challengers without Alinghi always crashing their party.

Meanwhile, the transfer season is still underway, even though the latest developments have had people keeping the caps on their pens until they see how things are going to run. Not least in the Oracle camp, where Russell Coutts is nearly in place, and in the Spanish camp, where Paul Cayard is an unhappy observer of what is happening and his long-time buddy Francesco de Angelis, who has parted company with Prada, does not like the way the CNEV has acted.