Golden Gate granted court order to advance AC resolution

The Supreme Court of the State of New York today granted an order sought by the Golden Gate Yacht Club (GGYC) requiring the Société Nautique de Genève (SNG) to promptly answer a request to speed up the legal process for resolving its proposed new rules for defending the next America’s Cup.

The San Francisco club sought the Court ruling alleging SNG is in serious breach of its fiduciary duty under the Deed of Gift that governs the Cup. It says SNG has accepted an invalid challenge from a sham yacht club, and is seeking to impose an unprecedented one-sided set of rules that hugely favor the defender to the detriment of all other competitors.

“We are very pleased with this ruling by the Court, because we believe the Cup will be irrevocably damaged if we don’t get SNG’s Protocol changed,” Tom Ehman, Head of External Affairs for BMW ORACLE Racing , the US club’s team, said.

“The new Protocol would give SNG’s team, Alinghi, radical new powers to control nearly all aspects of the event that are still unsupported by any explanation from SNG as to why they are needed,” he said.

Ehman said the syndicate whose challenge had been accepted by SNG, the Club Náutico Español de Vela (CNEV), was a shell organisation that had been formed only days prior to issuing a challenge and did not comply with the terms specified by the Deed of Gift.

“We would still prefer to negotiate a solution outside the court, but we see SNG as violating its responsibilities as Trustee, and we are fully prepared to go the legal distance if needed to stop the America ’s Cup being subverted into a hopelessly one-sided event,” he said.

The Deed of Gift that protects the Cup as a perpetual sporting challenge is governed by a fiduciary trust established under New York law in 1887.

The GGYC court action also seeks a preliminary injunction to obtain critical information related to the club’s challenge under the Deed of Gift.

The American challenge is for a race next summer under the Deed’s 10-month rule. GGYC need to know where SNG intends to hold that competition and what the SNG sailing rules are. Under the Deed, the Swiss Defender is required to provide these important details to the Challenger.

GGYC filed a challenge on July 11th, and asserts that SNG must accept it. If successful in this motion, the GGYC case could be heard by the Courts as early as October 2007.