Kiwis sue America's Cup champion Alinghi over regatta delay

7th March 2008, Comments 0 comments

Team New Zealand waded into the America's Cup legal fight on Thursday, suing two-time defending champion Alinghi of Switzerland in two US courts in an attempt to recoup tens of millions of euros it says it will lose because the next regatta has been postponed.

7 March 2008

PEORIA, Arizona - Team New Zealand waded into the America's Cup legal fight on Thursday, suing two-time defending champion Alinghi of Switzerland in two US courts in an attempt to recoup tens of millions of euros it says it will lose because the next regatta has been postponed.

Team New Zealand sued in the New York State Supreme Court - which by the Deed of Gift that rules the regatta has jurisdiction to resolve disputes - under a breach of contract argument, saying it entered the 33rd America's Cup with the promise that it would be sailed in Valencia, Spain, in July 2009.

The other suit was filed in US District Court under American anti-monopoly laws, stating that Alinghi abused its power "to stifle competition" by accepting a Spanish yacht club's invalid challenge to "gain an unfair competitive advantage."

"I want to say up front that neither of these cases are what we wanted to be doing," Team New Zealand managing director Grant Dalton said by phone from New York. "Kiwis, we're not about litigating, we're about sailing and fighting on the water fairly. We were forced into this situation."

Alinghi already jas lost one court case, to San Francisco's Golden Gate Yacht Club. New York State Supreme Court judge Herman J. Cahn ruled in November that the Golden Gate Yacht Club, which backs BMW Oracle Racing, was the rightful Challenger of Record, not a Spanish club that had been chosen by the Swiss. That meant BMW Oracle Racing could help negotiate the rules for the next regatta with Alinghi.

Alinghi has appealed, but faces the prospect of a one-on-one series against BMW Oracle Racing later this year for the oldest trophy in international sports.

There's a chance there won't be another traditional America's Cup regatta until 2011, forcing syndicates to stretch their budgets up to twice as long as anticipated, Dalton said.

Coincidentally, Alinghi's billionaire boss, Ernesto Bertarelli, loaned the cash-strapped Kiwis $7 milliona few years ago so it could compete in the 2007 regatta. Team New Zealand repaid the entire amount, Dalton said.

Alinghi lawyer Lucien Masmejan said in a statement that Team New Zealand's lawsuits "are totally without merit, wildly miss the target and will be defended rigorously. We share the sailing community's frustration in the delays affecting the America's Cup but Alinghi, as trustee, is duty bound to defend its position in the current legal action and to preserve the integrity of the America's Cup.

"We have repeatedly made it clear that Alinghi welcomes a swift court resolution and wants to get the action back on the water as soon as possible."

Both lawsuits list the defendants as Alinghi, Bertarelli, the Geneva yacht club that sponsors the syndicate and America's Cup Management.

America's Cup Management announced on Nov. 22 that it was postponing the 2009 regatta due to legal uncertainties. Cahn made his ruling five days later.

Dalton said a regatta in 2009 was "an absolute precondition" for Team New Zealand submitting a challenge and was part of an agreement his syndicate signed with Bertarelli's group on July 25.

Dalton said BMW Oracle Racing put together a "completely reasonable" proposal for a regatta in 2009 that was agreed upon by other challengers, but that Alinghi refused to negotiate.

"Oracle is not the evil empire here," Dalton said.

The lawsuits were filed in compliance with the terms of the Deed of Gift, which in 1887 set the rules of competition that begin in 1851 when the schooner America beat a fleet of British ships around the Isle of Wight.

[Copyright ap 2008]

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