CAN CLUBS /SYNDICATES BY AGREEMENT PERM/T ANOTHER CLUB/SYNDICATE TO PHOTOGRAPH OR FILM THEIR YACHT WHILE THEY

ARE PARTIClPATING IN NON-OFFiCIAL RACES WITHOUT BREACHING ARTICLE 13.3?

[17] The submissions advanced in relation to this matter differ in approach. Sorne call for a more relaxed approach permitting photography and other methods of obtaining

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images in an informai race situation. The submissions however do not disclose how same could be justified having regard to the provisions of Article 15.3(c).

Had Article 13.3 been intended to permit the taking of photographs or other means of obtaining images of a competing yacht club's/syndicate's yacht while com-peting in unofficial races, we would have expected such exception to have been recorded in Article 13. An agreement between competing syndicates to allow photo-graphing or other method of obtaining images of its yacht would itself be a breach Article 15.3(c).

In short, such agreement would contravene the prohibition from sharing or exchanging information with any person or entity unless, of course, it falls within the permitted exception contained in Article 15.3(c) itself.

[18] The answer to the fourth question, then is "it may not".

DECISION

[19] We answer the application by providing answers as set out in this decision to the four specifie questions raised in paragraph [2]. That can be summarized by saying the answer to question (a) is "no". The answer to question (c) is "it may not". The answer to question (d) is that "they may not". ln respect of question (b), the definition of what is an "Official Race" is as answered by us in paragraph [15] of this decision.

COSTS

[20] The costs of tbe Panel on this application are fixed at US $2,000. These costs shall be paid by Yacht Club Punta Ala 1 Prada Challenge to the Registrar within 21 days of the date of this decision.

6.11 Seattle Yacht Club / One World, Decision in Case No. ACAP 0118 (16 August 2002)

Applicant: Seattle Yacht Club / One World

Panelists: Chainllan: The Hon.Michael Foster QC Arbitrators: Master John Faire

Mr Donald Manasse Prof.dr. Henry Peter Sir David Tompkins QC

Subject Matter:

- Engagement of designers

- Possession of design and performance information from TNZ - Nature of su ch information and whether it was used

- Penalty deduction of one point

THE AMERICA'S CUP ARBITRATTON PANEL

IN THE MATTER of the Protocol governing the XXXI America's Cup AND

IN THE MATTER of an application by Seattle Yacht Club 1 One World Challenge ("OWC") seeking interpretative rulings on the application of Articles 11.5, 11.6, 13.3(a) & 15.3(c) and directions un der Article 22.8 of the Protoeol.

DECISION OF THE AMERICA'S CUP ARBITRATTON PANEL THE APPLICATION, SUBMISSIONS AND EVIDENCE

[1] By Notice of Application, dated 20 Oecember 2001, supported (after amend-ment) by a Statement of Growlds and Particulars, dated Il February 2002, OWC sought a series of interpretative rulings on the application of Articles Il.5, Il.6,

13.3(a) and 15.3(c) to the events and matters set out in those documents.

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[2] Pursuant to directions given by tbe Panel at various times, the following submis-sions have been filed. Patticipants are referred to by their shortened names.

a) Submissions of GBR Challenge, dated 27 March 2002.

b) Submissions of Prada, dated 27 March 2002.

c) Submissions of Oracle Racing, dated 28 March 2002.

d) Joint submissions ofTNZ, Prada, Victory Challenge and Alinghi.

e) Supplementary subrnissions ofTNZ (undated).

f) Fmther submissions and submissions in reply of OWC, dated 5 April 2002.

g) Further submissions ofTNZ, dated 19 April 2002.

h) Further submissions ofTNZ, dated 26 April 2002.

i) Supplementary snbmissions of Prada, dated 26 April 2002.

j) Further submissions in reply of OWC, dated 8 May 2002.

[3] ln addition the following affidavits and affirmations have been filed:

a) By OWC (in chief): 6) Thomas Schnackenberg 26 April 2002 c) By Prada:

5) Jeremy Scantlebury 6) Wayne Smith 7) Wayne Smith

May 2002 May 2002 May 2002

Decision Case No. ACAP 01/8

[4] Il is not proposed to set out the contents of these documents in these reasons. We will address the salient matters arising !fom them. It may be noted that, in addition to Article 13.3(a), reference has also been made to Article 13.3(b), it being alleged by GBR and TNZ and denied by OWC, that the facts also indicate breaches of this provision.

SOME PRELIMINARY CONSIDERATIONS

[5] Il has been asserted in sorne of the submissions that the Panel should undertake a general fact-finding enquiry into possible Protocol breaches by OWC. The Panel has no jurisdiction to undertake such a task. !ts powers of adjudication come !fom the Pro-tocol and are co-extensive with il. The Panel is not a court of general jurisdiction nor is it established as a commission of enquiry.

[6] The present application is brought under Article 22.3(a) which provides one of the heads of power given to the Panel by that Article. Article 22.3 is the sole source of the Panel's adjudicative powers. Il is correctly submitted by OWC that the Panel is not empowered to determine disputes between ACXXXI Participants and individual per-sons for, e.g., breaches of confidentiality undertakings or infringements of intellectual property rights. The right to bring proceedings for such breaches in courts of appropriate jurisdiction is reserved to the Participants and their representatives by Article 1O.4(e).

[7] Il may also be noted that, although there are areas of factual dispute in the mate-rial placed before the Panel, these disputes faU for resolution only within the jurisdic-tional framework of Article 22.3(a). The Panel has before it no application under any other sub-paragraph of that Article. In particular, although TNZ has put in issue some of the facts advanced by OWC, it has itself made no application to resolve a dispute in accordance with the terms of Article 22.3(c).

[8] Article 22.3(a), so far as relevant, empowers the Panel "to resolve ail matters of interpretation of any of the documents and rules referred to in Article 14 [ ... ] includ-ing, where necessary, the determination of the facts relevant ta the matter of interpre-tation." It is only in this Iimited area that the Panel makes findings of fact in this present application.

[9] It is convenient, also, to refer to Article 23.2 of the Protocol, which requires that

"23.2 In the interpretation of this Protecol all the provisions hereof shall be construed in such manner as will best promote the purpose and object underlying th1S Protocol or the particular provision and best insure that they are given their truc spirit, meaning and intent."

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[10] Moreover, in interpreting the Protocol it is necessary ta bear in rnind the funda-mental condition of the Deed of Gift that "the Cup is donated upon the condition that it shan be preserved as a perpetuai Challenge Cup for friendly competition between foreign countries,"

For a competition ta be friendly, it should be scrupulously fair.

[11] Il is appropriate, also, ta note that, as stated in the introduction ta OWC's appli-cation, "after the end of any America's Cup regalla, designers and others who were engaged by a challenger, a candidate for the defence, or the defender for that regalla may choose to become involved with a different challenger, candidate for the defence, or defender for the next America's Cup." Designers are able ta do this, if they take steps ta comply with the "nationality" requirements of Article 11.2. ^It is inevitable that such designers, because of their special expertise in their field and the experience obtained in the designing of the previous participant's ACC yacht will carry with them recollections of many aspects of that design. This is knowledge which, as OWC sub-mits, cannat be erased fi:om their minds. In the Panel's view, this is a necessary conse-quence of the now accepted international mobility of designers. Il is, nevertheless, an unf0l1unate consequence, in that it can be inimical ta the basic concept that a compet-ing yacht should truly be, in ail respects, the product of the competing country. In interpreting this Protocol, this is an essential background consideration, in that care is called for in preventing any unwarranted extension of this consequence.

[12] A further background consideration is the obvious fact that many current Par-ticipants will also have competed in previous AC competitions and, in doing so, will have established significant private technical records, which will form an important basis for the production of improved ACC yachts for subsequent competitions. This bank of knowledge cannot be regarded as relating simply to previous ACC yachts produced by that Participant but, in the Pane!'s view, constitutes, relevantly, "design information" ta be used by it in the production of new yachts for current competition. Il is not surprising that, as the evidence indicates, designers transferring from one syndicate to another, at the end of the AC XXX competition, were required to enter into confidentiality agreements in order to protect the previous employer's property rights in this design information.

[l3] With these preliminary considerations in mind we turn ta consider the questions raised by OWC in its application.

QUESTION 1: ENGAGEMENT OF DESIGNERS FORMERLY ENGAGED