Team New Zealand today filed lawsuits
in NY charging Alinghi, with deliberately delaying
the next America’s Cup.
The Kiwi sailors are seeking financial compensation
from Alinghi, Bertarelli and Bertarelli-controlled
AC Management for breaches of contract and trust,
as well as violations of U.S. antitrust law.
According to the Team NZ, "the 33rd defense of the
world’s oldest international sports trophy was to
have been held at Valencia, Spain, in 2009, but
a series of actions by Alinghi have made it more
likely that boats will not be in the water again
"The delay in staging the next America’s Cup
is harming every challenging syndicate as they have
to stretch budgets developed and approved for a
two-year campaign over three or four years,"
said ETNZ managing director Grant Dalton.
"We have a duty to protect the investment in
the team over many years by our loyal supporters.
We also have an obligation to honor the trust shown
by the hundreds of thousands of New Zealanders who
have supported the team through the years."
Heading the ETNZ legal team is attorney David Boies
of New York-based Boies, Schiller & Flexner LLP.
The legal actions are being taken in New York in
compliance with the terms of the Deed of Gift.
"ETNZ and other racing syndicates have made
significant financial commitments based on the assurances
and legal obligation of Mr. Bartarelli’s organization
to defend the Cup in 2009," said Boies. "He
has violated both the spirit and letter of the Deed
of Gift at every turn, and is holding this venerable
competition hostage in an attempt to control the
substantial financial benefits of the event and
The first action, filed in the Supreme Court of
the State of New York, claims damages for breach
of contract arising from an agreement made as a
pre-condition of ETNZ’s entry to the 33rd America’s
The agreement involved an understanding entered
into by Ernesto Bertarelli on July 25, 2007, that
the America’s Cup would go ahead in 2009.
"That assurance was a pre-condition of our
entry," Dalton said. "Then on November
22 last year, before the Supreme Court of New York
had even issued judgment on a challenge by Golden
Gate Yacht Club (representing the American team
BMW Oracle, headed by Oracle founder Larry Ellison)
to the validity of the Spanish challenge, Bertarelli’s
AC Management announced that the Cup would be delayed."
"Mr. Bertarelli had the chance to accept a
reasonable proposal from Oracle, which was also
signed by the majority of the challengers, and which
would have allowed the America’s Cup to be held
in 2009", said Dalton. "He would not do
The action also claims that Société
Nautique de Genève, the “yacht club” Bertarelli
set up as trustee of the Cup, through the actions
of the other defendants has committed breaches of
its fiduciary duties that trustees owe to maintain
the standing and integrity of the Cup.
The second action has been filed in the Federal
Court under United States anti-trust legislation.
ETNZ contends that Alinghi and the other defendants,
abusing the power conferred to the defender under
the Deed of Gift, has acted to stifle competition
for the Cup and for the right that goes with it
of conducting future events by accepting a paper
yacht club of no substance - - CNEV - - as the challenger
of record, thereby enabling it to impose rules for
the next event that were completely one-sided and
which were designed to give Alinghi an unfair competitive
ETNZ also contends that Alinghi’s subsequent conduct
in refusing to agree to a reasonable settlement
of the BMW Oracle case, the unilateral and indefinite
delaying of the event from 2009 was all designed
to and had the effect of increasing other teams’
costs, including those of ETNZ.
"We are heading to court reluctantly, but have
no option," said Dalton. "We would rather
"We have to ensure that when the next America’s
Cup is held, Emirates Team New Zealand is still
in very good shape and ready for the battle on the
water", said Dalton. "By the time AC Management
announced that the 33rd America’s Cup would be delayed,
we had put together a comprehensive program for
2008, with ETNZ members competing in a number of
European regattas. And we had already done an enormous
amount of work on the design of the new 90ft AC
class boat. Design work is continuing, although
with less urgency".
"ETNZ is fortunate in having the full support
of our sponsors, the New Zealand Government, and
team members. However the delay does come at a price
and it seems prudent for the team to seek financial
compensation to cover additional campaign costs
and damage to our brand name and reputation and
to the event in which we compete, the standing of
which affects our ability to raise funds."