Larry Ellison's US America's Cup challengers are going to take the defenders to court

The Golden Gate Yacht Club, challenging club behind Larry Ellison’s BMW Oracle, has filed a lawsuit against defenders the Société Nautique de Genève (SNG) in the Supreme Court of the State of New York, which has jurisdiction over the America’s Cup Deed of Gift.

In a press release issued on Friday they state:

‘The San Francisco club is asking the Court to:

? void the purported challenge of the Club Náutico Español de Vela (CNEV) because CNEV does not qualify under the Deed of Gift as a challenger;

? declare the “Protocol Governing the 33rd America’s Cup” agreed between SNG and CNEV null and void because (i) CNEV was an invalid challenger, and (ii) SNG is engaging in self-dealing by accepting CNEV’s purported challenge and entering into a protocol which eliminates Challenger rights and omits basic information regarding match rules and conditions.

? declare that GGYC’s challenge filed on 11 July 2007 for the 33rd America’s Cup is valid; and

? require SNG to accept GGYC’s challenge, and implement the terms of the Deed of Gift by participating with GGYC in the establishment of a proper protocol though a consensual process; or, failing that, to proceed with a match with GGYC under the rules expressly set forth in the Deed of Gift.

Key excerpts from the lawsuit filed today:

The action arises out of defendant SNG’s violation of the clear, express terms of the Deed of Gift, a trust instrument executed under the laws of New York, on October 24, 1887. SNG is the present holder and successor trustee of the trophy known world-wide as the America’s Cup. The Deed of Gift (“Deed”) provides that the America’s Cup is a “perpetual Challenge Cup for friendly competition between foreign countries.” By failing to enforce the terms of the Deed, SNG has turned the Deed of Gift on its head and transformed it into a “Defender’s Cup,” dominated by SNG, in breach of SNG’s fiduciary duties.

SNG has accepted a challenge that is invalid under the Deed of Gift from Club Náutico Español de Vela (“CNEV”), a brand new yacht club? specifically created to collaborate with SNG.

SNG used CNEV? to engineer a match Protocol in which virtually all Challenger rights are eliminated and total control of the event and its rules are granted to SNG, altering the very nature of the competition and giving unprecedented and unfair advantages to SNG.

By refusing to disclose?the basic elements of regatta venue, date and boat design rules, there is no opportunity for a fair and equitable competition.’

Read more on my blog.