The 32nd America's Cup Jury and its decisions

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Book

Reference

The 32nd America's Cup Jury and its decisions

PETER, Henry (Ed.), et al.

PETER, Henry (Ed.), et al . The 32nd America's Cup Jury and its decisions . Austin : Wolters Kluwer, 2009, 439 p.

Available at:

http://archive-ouverte.unige.ch/unige:26673

Disclaimer: layout of this document may differ from the published version.

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KLUWER lAW INTERNATIONAL

The 32nd America's Cup Jury and its Decisions

)

^\

Henry Peter (ed.) Bryan Willis

Gabrielle Kaufmann-Kohler Graham McKenzie

Henry Menin David TiUett

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Law & Business

AUSTIN BOSTON CHICAGO NEW YORK THE NETHERLANDS

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2400 AH Alphen aan den Rijn The Netherlands

Website: www.kluwerlaw.com

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The 32nd America's Cup Jury

Clockwise starting from far left: Henry Menin, Graham McKenzie, Sasha Lines (Jury Secretary), Henry Peter, David Tillett, Gabrielle Kaufmann-Kohler, Bryan Willis (Chairman).

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Table of Abbreviations

Yacht Clubs and Syndicates

+39

CVP

DCYC

GGYC

GSYS

QIYC

RCYC

RFEV

RNZYS

RYCCS

SNG

YCI

Circolo Vela Gargnano, Italy Syndicate: +39 Challenge

Cercle de la Voile de Paris, France

Syndicale: Areva Challenge (initially known as K-Challenge) Deutscher Challenger Yacht Club, Germany

Syndicale: United Internet Team Gerrnany Golden Gate Yacht Club, United States Syndicate: BMW Oracle Racing Gamla Stans Yacht Sallskap - Sweden Syndicate: Victory Challenge

Qingdao International Yacht Club, China

Syndicale: China Team (initially known as Le Défi) Royal Cape Yacht Club - RSA

Syndicate: Team Shosholoza

Real Federaci6n Espaiiola de Vela, Spain

Syndicale: Desafio Espafiol 2007 (initially known as Tearn El Reto) Royal New Zealand Yacht Squadron, New Zealand

Syndicate: Ernirates Team New Zealand Reale Yacht Club Canottieri Savoia, Italy Syndicale: Mascalzone Latina - Capitalia Team Société Nautique de Genève, Switzerland Syndicate: Alinghi

Yacht Club Italiano, Italy

Syndicate: Luna Rossa Challenge

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General Abbreviations

ACC Rules ACC Yachts ACM ACJ

ACJECAF

ADR

Center

ECAF

ISAF MDS NOR Protocol

RoP RRS SI TOC WIPO

America's Cup Class Rules America's Cup Class Yachts America's Cup Management Ltd.

America's Cup Jury

Ame1ica's Cup Jury Electronic Case Facility Alternative Dispute Resolution

WIPO Arbitration and Mediation Center WIPO Electronic Case Facility

International Sailing Federation Meteorological Data Service Notice of Race

The Protocol Governing the Thirty Second America's Cup Rules of Procedure of the Jury

Racing Rules of Sailing Sailing Instructions Terms of Challenge

World Intellectual Property Organization

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1. Introduction

1.1 THE

BooK¹

The 32nd edition of the America's Cup ended on 4 July 2007. The 33rd edition immediate! y started in the middle of controversies. Even though each edition of the Cup is mostly governed by its own rules, the members of the 32ndAmerica's Cup Jury (ACJ) thought that their experiences in such capacity might be helpful for the future.

Inevitably choices bad to be made. This book contains what the authors believe to be the most relevant documents. These obviously include the Deed of Gift2 and the Protocol governing the 32nd America's Cup.³It has also been deemed useful to include the Rules of Procedure (RoP)⁴as weil as the Tenus of Challenge (TOC),⁵and, inter alia, Anti-Doping⁶and Anti-Gambling Rules.⁷

Internet vola!, scripta manent:⁸the main purpose of this book is to provide, on a physical support, a tool encompassing ail decisions issued by tbe ACJ during the 32nd Cu p. Although these are not intended to be binding in the future,⁹past experience bas proven that they may assist whoever is involved in forthcoming editions of the Cup.

l. The authors would Jike to extend their thanks to Mr Erick Wilbers, who heads the World Tntel- lectual Property Organisation (WTPO) Arbitration and Mediation Center, Geneva, Switzerland, as weil as to his colleagues, for their collaboration during the 32nd America 's Cup, in particular by pro vi ding, free of charge, the ECAF system to the Jury and to ali parties involvcd in the Jury's activities (see 1.3.5 hereunder); to Mr Stefano Perucchi and toMs Claire Mordelet, both associ- ates of Prof. Henry Peter, for their valuable collaboration in preparing this book as weil as to Ms Sasha Lines, the Jury's Secretary, for her help throughout the 32nd Arnerica's Cup.

2. See 2 hereunder.

3. See 3 hereunder.

4. See 4 hereunder.

5. See 5.1 hereunder.

8. From the latin maxim "verba volant, seri pla manent" meaning that what is expressed verbally is forgotten (disappears) while what is in writing remains.

9. See Article 21.9 (a) of the Protocol governing the 32nd America's Cup, which reads "The Jwy shall not be bou nd by previous decisions of the America s Cup Arbitra/ion Panel or international Jwy in the 30th or 31st America s Cup, but may lake into account such decisions when making any determination".

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A similar book has already been published in respect of the 31st America's Cup and has proven to be useful.¹⁰ln fact, in the absence of a similar initiative, decisions rendered during the 29th and 30th America's Cup are, for the most part, not available anymore, at !east in a form which provides both certainty as to the ir content and access to non-insiders. This book therefore includes the decisions issued about ail thirty-six cases which were submitted to the 32nd ACJ, i.e., a total of forty-three decisions, being decisions on the merits as weil as a series of interim, provisional or partial decisions and, in one case, a dissenting opinion.

Besicles these documents, the authors have deemed it useful to start with a brief introduction in which, after briefly providing sorne historical background, the Jury members explain and comment on their experience from various perspectives.

1.2 JI:ISTORICAL BACKGROUND11

1.2.1 HISTORY

The history of the America's Cup began with a group of :live members of the New York Yacht Club deciding to take part in the festivities of the Great Exhibition of 1851 which was to be held in England by demonstrating the superiority of American yacht design. The New York Yacht Club Commodore, John Cox Stevens thus wrote to the Commodore of the Royal Yacht Squadron ("RYS"), the Earl of Wilton, accepting his invitation to enjoy the hospitality of the RYS and alluded to the possibility of racing against RYS members yacht. The New Yorkers built the yacht America which, after crossing the Atlantic, competed in an open to "ali nations" RYS race around the Isle of Wight for a f. 1 00 silver Cup against 15 English cutters and schooners ranging in size from 47 tonnes Aurora to 392 tonnes Brilliant. America won the race by at least 8 minutes from the second placed Yacht Aurora. The history of the Cup which America won is full of disputes, the latest one still going on white this book is being finalized.

l O. See John Faire, Michael Foster, Donald Manas se, Henry Peter ( ed.), David Tompkins "Arbitra/ion in the America s Cup: The XXXI America s Cup Arbitra/ion Panel and ils Decisions", Kluwer Law, The Hague, London, New York, 2003.

Il. See John Faire, Michael Foster, Donald Manasse, Henry Peter (ed.), David Tompkins "Arbitra- lion in the Americas Cup: The XXXI America$ Cup Arbitra/ion Panel and ils Decisions", Klu- wer Law, The Hague, London, New York, 2003; see also Bob Fisher "An Absorbing Jnterest:

The America:~ Cup- A History 1851-2003", John Wiley & Sons Ltd., 2007; Gary Jobson "La Coupe de l'America", Van de Velde, 2000; Gérard A. Jaeger "C'era una volta la Cappa America", Longanesi, 2006; V. Hines, "About the America

s

Cup", Grand Junction, CO, 1986.

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Introduction

1.2.2 THE PRESENT DEED OF GIFT

The Cup was donated by the five owners¹²of the yacht America to the New York Yacht Club in 1857. It was returned on two occasions to George Schuy1er, the sole surviving winner and donor, to alter the terms of the competition for what became known as the

"America's Cup". The present Deed of Gift goveming the competition was executed in 1887. It was thereafter amended twice by orders of the Supreme Court ofthe State ofNew York dated, respectively, 17 December 1956 and 5 April 1985.¹³Pursuant to that Deed, the Cup is to be held in trust by an "organized Yacht Club" upon certain conditions, which include:

(i) "it shall be preserved as a perpetuai Challenge Cup for friendly competition between foreign countries";

(ii) "any organised Yacht Club of a foreign country ( ... ) having for its annual regatta an ocean water course on the sea, or on an arm of the sea, ( ... ) shall always be entitled to the right of sailing a match for this Cup, with a yacht or vesse!

propelled by sails only and constructed in the country to which the Challenging Club belongs, against any one yacht or vesse) constructed in the country of the Club holding the Cup";

(iii) "the club challenging for the Cup and the Club holding the same may, by mutual consent, make any a1Tangement satisfactory to both as to the dates, courses, number of trials, ru les and sailing regulations, and any and ali other conditions of the match ( ... )";

(iv) "in case the parties cannat mutually agree upon the terms of a match, then three races shall be sai led, and the winner of two of su ch races shall be entitled to the Cup".

1.2.3 DISPUTE RESOLUTION BEFORE THE 32nd AMERICA 'S CUP¹⁴

The long and colourful history of the America's Cup is riddled with legal disputes, resolved by various judicial bodies including the New York Supreme Court, the New York Court of Appeal, Arbitration Panels, Sailing Juries and Protest Committees.

Legal proceedings can cause court-enforced delays with the potential to cause havoc with TV and investor obligations. At the commencement of the 30th edition in 1999 the Royal New Zealand Yacht Squadron (Defender) and the New York Yacht Club (Challenger of Record) set up a five-person A.rbitration Panel in an effort to a void

12. JC Stevens, Edwin Stevens, Beekman Finlay, George Schuyler and Hamilton Wilkes.

13. For the full text ofth.e Deed ofGift, see 2 hereunder.

14. This paragraph has been main! y contributed by Mr Bryan Willis, Chairman of the 32nd America's Cup Jury. See also Bob Fisher "An Absorbing lnterest: The America

s

^{Cup -}^{A HisiOIJ'}1851-2003", John Wiley & Sons Ltd., 2007.

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the risk of disruptions. The Defender and ali the Challengers agreed to submit to the jurisdiction ofthat Panel and that any referral to a Court of Law would disqualifY them from further participation in the America's Cup.

The scheme was repeated for the 31st edition in 2002.¹⁵In addition, the long- standing practice of appointing an "International Jury" (a majority of which must be

"International Judges" appointed by the International Sailing Federation ("ISAF")) continued, to resolve the disputes relating to the sailing competition.

Arbitration tribunals are recognized in most countries. They have severa) advan- tages over state courts, the most attractive ofwhich is that provided they comply with the rules of "natural justice," their decisions are final and not open to appeal by any other judicial body. As a matter ofprinciple, astate appointed court will interfere with an arbitration tribunal decision only where it can be shawn there has been a prejudicial procedural error. Unlike a court, arbitra tian tribunal (or panel) members are appointed by the parties and are, therefore, expected to be knowledgeable of the field and type of matters under dispute. Hearings and decisions are expeditious.

The 31st America's Cup Arbitration Panel concept was successful in th at there were no attempts to refer any matters to a Court of Law (other than one by a Challenger which rapidly withdrew it when the consequences were realized). The responsibilities of the Arbitration Panel and of the International Jury were defined by the documents und er which they held jurisdiction, namely the "Protocol", ¹⁶in respect of the Arbitration Panel and the "Racing Rules" in respect of the International Jury. This sometin1es caused sorne complications where more than one document was relevant to a case ( e.g., during the 30th edition of the Cup, the Stars and Stripes "Made in Australia" Rudder case¹⁷).

1.3

THE

32nd

AMERICA's

Cur

JURY

1.3.1 ACTIVITY OF THE 32nd ACJ IN GENERAL¹s

When preparing for the 32nd Cup, Alinghi and BMW Oracle introduced many inno- vative ideas. Alinghi's Ernesto Bertarelli asked Bryan Willis (who had been chairing the International Jury during the 31st edition of the Cup) if he thought the responsibilities of the Arbitration Panel and the International Jury could be combined so that there could be one single body to resolve aU disputes in relation to the progression

15. See John Faire, Michael Foster, Donald Manasse, Henry Peter (ed.), David Tompkins "Arbih·ation in the America

s

Cup: The XXXI America

s

Cup Arbitra/ion Panel and ils Decisions", Kluwer Law, The Hague, London, New York, 2003.

16. For the text of the 31st America's Cup Protocol see John Faire, Michael Foster, Donald Manasse, Henry Peter (ed.), David Tompkins "Arbitra/ion in the America~· Cup: The XXXI Americas Cup Arbitration Panel and ils Decisions", Kluwer Law, The Hague, London, New York, 2003, p. 47ff.

17. See decision ta ken by the 30th America's Cup Arbitration Panel of January 9, 2000.

18. Contribution by Mr Bryan Willis, Chairman of the 32nd America's Cup Jury.

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Introduction

of the event. Bryan Willis' opinion was that it could work weil if its members had the appropria te qualifications and experience, though that might mean that such body would not qualify as an "International Jury" under ISAF Regulations. ISAF however gave its approval because of the special nature of the event.

The Protocol provided that ail members of the Jury would be appointed with the agreement ofboth pmties thereto, namely the Defender (Société Nautique de Genève ("SNG")) and the Challenger of Record (Golden Gate Yacht Club ("GGYC")). This is unusual for Arbitration Tribunals. Normally one or two members are appointed by each party, and a chairman is eitber agreed, or appointed by the other members or by an established international arbitration institution. Of course tbere had to be a fallback position which, unusually, was that if they could not agree theo Bryan Willis (as Chair of the 31st ACJ) would appoint them ail, including himself if he so wished. This did not occur sin ce SNG and GGYC did agree to the appointments of ail five members.

And thus the 32nd ACJ was appointed, taking on the legal responsibilities as both an arbitration tribunal and a conventional international (sailing) jury. The panel appoint- meats were Professor Gabrielle Kaufman-Kohler from Geneva, Switzerland; Graham McKenzie from Auckland, New Zealand, and David Tillett from Adelaide, Australia, partners in their respective law fums; Henry Menin from US Virgin Islands who bad practiced law in the past, and Bryan Willis from United Kingdom. Gabrielle Kaufman- Kholer resigned in 2006 when she was appointed to the Board of a major sponsor of Alinghi. She was replaced with Professor Henry Peter from Lugano, Switzerland. Due to appointment change and availability Bryan Willis and Graham McKenzie were the only Jury's members who dealt will all thirty-six cases.

Henry Menin, David Tillett and Bryan Willis had considerable International Jury experience judging at major sailing events, but Bryan Willis found that the legal backgrounds of the other members enabled them to make significant and refreshing contributions to the "sailing" disputes. At the commencement of the 32nd America's Cup, Bryan Willis had a dual role cbairing both the Jury and acting as Chief Umpire. Henry Menin and David Tillett also bad a dual role as Jury members and as Umpires.

However, after a Jury case in 2005 involving the actions of an Umpire, Bryan Willis thought it prudent to separate the two functions and with the agreement and support of the Defender and Challengers, Bryan Willis resigned as Chief Umpire white both Henry Menin and David Tillett gave up their role as Umpires, so that the Jury was totally independent of ali other bodies.

The "corporate" philosophy of a judicial body is of course derived from its individual members; the choice of its members will often affect the outcome of at !east some cases. Not surprisingly, most cases resolved by the 32nd ACJ were decided unan- imously, but sorne only after extensive discussion, and there were two cases in which one member wished to declare himself as the "minority" (a different member in each case), and one where the voting was three to two.

The number of cases (36) does not reflect the total number of actual or potential disputes: there were severa! cases which were resolved by mediation or by unofficial discussions.

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Btyan Willis wished to take this opportunity of this contribution to thank the Jmy members for their commitment and wisdom, and to thank the Defender, the Challengers, the Organization, and the Race Committee for their understanding and cooperation. Bryan Willis' hope is that they have appreciated the work and dedication of the Jury members in striving to resolve all disputes expeditiously in a fair and just manner.

1.3.2 GENESIS OF THE PROTOCOL GOVERNING THE 32nd AMERICA 'S cup19

1.3.2.1 Background

On 2 March 2003, SNG won the 31stAmerica's Cup edition which was taking place in New Zealand. Shortly after the yacht Alinghi won the fifth race, SNG, as the new Trustee, and GGYC, as "Challenger of Record", signed a Protocol for the 32nd America's Cup which, together with subsequent amendments, is referred to herein as the "Protoco1".²⁰

1.3.2.2 Purpose of the Protoco1

The purpose of the Protocol was to set out the terms that wou1d govem the 32nd America 's Cu p. lt was accompanied by a series of other applicable documents. In order of precedence in tetms of Article 12 of the Protocol, these were:

(a) the Deed ofGift;²¹ (b) the Protocol;²²

(c) version 4.0 of the America's Cup Class (ACC) Rules for regattas held prior to 31 December 2004, and version 5.0 of the ACC Rules for regattas held on or after

1 January 2005;

(d) the TOC²³^;

(e) the applicable Notice of Race (sometimes referred to as ''NOR");

(f) the applicable Sailing Instructions (sometimes referred to as "SI");

(g) Racing Rules, including Match Racing Rules, as agreed by the Defender and the Challengers Commission, and interpretations (CaUs and Cases) issued in accordance with the NOR.

19. Contribution by Mr Graham McKenzie, Member of the 32nd America's Cup Jury.

20. For the full text of the 32nd Arnerica's Cup Protocol, as amended, see 3 hereunder.

21. See 2 hereunder.

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Introduction

1.3.2.3 Protocol Changes

At the time the Protocol was signed on 2 March 2003, not aU of the rules listed in Article 12 of the Protocol had been drafted. These ruJes and the Protocol were further considered by SNG and the GGYC with the Protocol itself then being reissued. The Protocol was also subsequently amended on a number of occasions. Changes were made to the Protocol to provide for matters that developed as the Event - as defined in the Protocol - progressed. In sorne cases it was to deal with the unexpected. For example when a Jury member resigned in 2006 a change was mutually agreed to be made to Article 21.1 ( c) of the Protocol to provide for a reduced quorum of the Jury for a limited period. ACJ020²⁴followed when the Jury in terms of such Protocol amendment was required to appoint a fifth replacement Jury member.

1.3.2.4 New Protocol Concepts

The Protocol had been written in the context of SNG having won the America's Cup as a Challenger from the Royal New Zealand Yacht Squadron who had defended the America's Cup on two occasions. SNG made a considerable number of changes that they believed were needed from the protocol and rules that had applied for the 31stAmerica's Cup.

1.3.2.5 Management

AC Management Limited ("ACM") was appointed as the "Event Authority" to man- age and run the "Pre-Regattas", the "Exhibition Regattas" and all the racing that led up to and including the America's Cup match. Its structure was based along profes- sional commercial management !ines. After the conclusion of the 32nd America's Cup, ACM was required to distribute to the Defender and the Challengers any "Net Surplus Revenue" in terms of the formula contained in Article 4.3 of the Protocol.

ACM took a new approach to finding a venue whereby bids were sought for the right to hold the 32nd America 's Cu p. This resulted in the City of Valencia, Spain being selected.

Article 5.9 of the ProtocoJ contained what was often referred to as the "neutra! management rule". This article required SNG, as the Defender, ACM, the Regatta Director, the Challenger Commission, GGYC, as the Challenger ofRecord and ali of the Regatta Officiais to act in the best interests of ali the Competitors and not to favour the interests of the Defender over those of the Challengers. Such rule's application was the subject of considerable discussion in a number of cases. This included ACJ008²⁵conceming

24. See 6.19 bereunder.

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the establishment and management of an oceanographie weather Meteorological Data Service ("MDS") in Valencia by the Race Committee. It was also a part of ACJ024²⁶ which concemed a dispute over the construction offacilities by ACM and its appointed contractors in the South Park area of the America 's Cup Village in Valencia.

1.3.2.6 Advertising

A considerable body of ru les was included with regard to advertising. SNG took a commercial focus to enable Competitors to obtain commercial sponsorship. While the rules concerning on water advertising by yachts were in broad terms similar to those of the 31st Arnerica's Cup, the rules covering on shore advertising were new having been designed to protect ACM's advertising rights so as to maxirnize the Net Surplus Revenue in ali Competitors' interest. Article 10 of the Protocol included detailed ru les in respect of advertising and Event signage on Competitors Yachts. ACJ007²⁷concerned a request for the approval of a yacht's name. ACJO 15²⁸concerned a request for branding approval on the mainsail and ACJ022²⁹concemed a request for approval of branding on a yacht's hull. The TOC included rules in respect of signage (Rule 10), media (Rule 17), image rights (Rule 18) and America's Cup trademarks (Rule 19).

1.3.2. 7 Place of Construction of a Yacht

The rules concerning place of construction of a Competitor's Yacht were also new, with construction of a Yacht in a Competitor's country being deminimus. Only lami- nation of the Yachts hull was required in the country of the Competitor. However, ACJ014³⁰involved an application by Mascalzone Latino-Capitalia Team conceming the requirement to obtain a certificate from the Measurement Comrnittee as to the place of construction of a yacht's hull before it left the yacht's construction yard. Competitors had a free choice of yacht manufacturers and components.

1.3.2.8 No Nationality Rules

Unlike the 31st Cup, no nationality rules applied to designers or sailors. Article 13.12 (a) (i) of the Protocol provided that other than with the consent of ali Competitors still competing, any person contracted after 2 March 2003 by a Competitor for 180 or more

28. See 6.14 hereLLnder.

29. Sec 6.21 hereunder.

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Introduction

days could not be engaged by any other Competitor in any capacity. This rule was the subject of significant public controversy. lt was not the subject of a Jury case in its own right but issues concerning employment of another team member was dealt with ACJ005³¹and ACJ006.³²Under Article 13.5 of the Protocol, designers were, however, restricted to working for only one Competitor. This was the subject of ACJ003.³³

1.3.2.9 Dispute Resolution

In the 31st America's Cup jurisdiction over matters of interpretation or dispute in respect of the Protocol and Class rules was divided among three separate bodies, namely the Arbitration Panel, the International Jury and the Measurement Committee.

The jurisdiction of the Arbitration Panel and of the International Jury in dealing with disputes bad at times been unclear in the 31st Cup; for the 32nd America's Cup the Protocol thus combined those two bodies into a single body called the "Jury."

1.3.2.10 Jury

The Jury acted as botha Jury under the applicable ru les of sailing and as an Arbitration Panel. lt bad jurisdiction to deal with interpretations of the Protocol, commercial disputes and any sailing related matters that were within the Jury's jurisdiction. Most matters under the Racing Ru les of Sailing ("RRS") that concerned the right of way rules on the water were within the sole jurisdiction of the Umpires. They made their decisions on the water, at the time of the incident, and there was no right of appeal against those decisions. That is the common practice in ail match racing.

Although the Protocol did not provide for it, members of the Jury at times also performed an informai mediation service in cases where ali parties agreed to submit the dispute to mediation. This approach sometimes allowed issues to be resolved without a case being formally filed or, when a case was filed, to allow it to be resolved by mediation such as inACJ008,³⁴ACJ024.³⁵This worked quite efficiently, with the only exception of ACJ033³⁶where the attempt to mediate eventually failed.

Other than in ACJ003³⁷and ACJ036³⁸where the Jury convened in person to specifically hear that case, unless the Jury was on site at a regatta when a particular

38. See 6.35 hereunder. After this decision was issued, the matter was submitted to the Swiss Disciplinary Chamber in charge of Doping Cases of Swiss Olympics (SDC), in order to say

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matter came before the Jury, all other cases were dealt with without an in persan hear- ing and were decided on the documents filed by the parties.

1.3 .2.11 Measurement Committee

A Measurement Committee, to ensure compliance with the ACC Ru les and other measurement requirements, was appointed by the Regatta Director under Article 5.2 (b) of the Protocol. The Measurement Committee had exclusive jurisdiction to deal with measurement interpretation or determination matters in terms of Article 20.1 of the Protocol. Under Article 21.4(a) of the Protocol the Jury was excluded from dealing with matters that were expressly under the jurisdiction of the Measurement Committee unless a matter related to the jurisdiction of the Measurement Committee or compliance by it with the Protocol. The jurisdiction of the Measurement Committee was the subject of two cases during the America's Cup match, being ACJ034³⁹and ACJ035.⁴⁰

1.3.3 SA/LING MATTERS4¹

The 32nd ACJ acted as a Jury under the RRS. This included protests arising out of the RRS, including the SI, NOR and Measurement matters. The Jury also had the power to determine whether or not the Measurement Committee acted within its jurisdiction, including compliance by the Measurement Committee with the Protocol.

The RRS are published by ISAF on a quadrennial basis. The applicable Rules were the 2005-2008 edition. Pursuant to an agreement with ISAF, the Event Authority (ACM) was permitted to change the RRS and this was done to make improvements having regard to the particular nature of the America 's Cup event and the class of boat sailed. Sailing matters involving the rights of way on the race course were generally dealt with by the Umpires "on the water" using the Match Racing Rules (Appendix C) of the RRS.

There were sorne matters on the water that were not within the jurisdiction of the Umpires and which were therefore within the province of the Jury. These included situations where there bad been contact between two boats that had caused damage or in jury and the Jury was cal led upon to determine wh ether it was reasonably possible for

which penalty was to be inflicted on Mr. Daubney, if any. The SDC decision was issued on Janu- ary 17, 2008 but appealed by the World Anti-Doping Agency (WADA). As a consequence the case was deal! with by the Court of Arbitration for Sport (CAS). CAS issued its (final) decision on October 2, 2008 setting aside the SDC decision and declaring Mr. Daubney ineligible for a period of two years.

41. Contribution by Mr David Tillett and Mr Henry Menin, Members of the 32nd America's Cup Jury.

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Introduction

the right ofway boat to avoid contact with the other boat and, ifrequired, to apportion the damages. Cases ACJ002,⁴²ACJ019⁴³and ACJ025⁴⁴are examples thereof

The J my was also empowered to consider whether or not it was appropriate to grant redress for a boat where she claimed ber score in the race or series had, through no fault ofher own, been made significantly worse by an improper action or omission of the Organizing Authority or Race Committee, certain Umpire actions and injury or physical damage because of the action of a boat that was breaking a rule when the boats met. The following are cases where redress was claimed and/or granted:

ACJ009:⁴⁵a request for redress regarding spinnaker sheet entanglement with an Umpire boat;

- ACJ010:⁴⁶a request for redress regarding an alleged error by the Race Committee in calling a very close finish of a race;

- ACJ016:⁴⁷a request for redress regarding an alleged error by the Regatta Director in how he applied the rules in resolving a tie;

- ACJ025:⁴⁸a request for redress regarding physical damage to a boat as a result of a collision;

- ACJ027:⁴⁹a request for redress regarding an alleged action by the Organizing Authority in the installation of television equipment on a boat which caused the failure of the electronic system on the boat;

ACJ028:⁵⁰a request for redress regarding an alleged error by the Race Committee in calling whether a boat had finished properly after completing ber penalty at the finishing line.

The Jury also had responsibility under the RRS for dealing with protests arising out of Rules involving other requirements of boats when racing. An example thereof is ACJ018:⁵¹a protest by a boat alleging that another boat received outside help in con- travention of the Racing Rules.

Under the RRS and the NOR it was for the Jury to deal with anti-doping matters.

The Event Authority, in close co-operation with ISAF and the World Anti-Doping Agency, issued its own Anti-Doping Rules. The Jury's jurisdiction was the determination of whether or not there had been an Anti-Doping Rule violation and the imposition of penalties in respect of the Event itself, but not outside the Event, in

47. See6.15 hereunder.

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which case ISAF continues to have jurisdiction. This is illustrated by the Jury case ACJ036.⁵²

Finally, the Jury had jurisdiction concerning certain measurement matters, including compliance by Competitors with the Class Rules while sailing. Here as weil a series of cases can be referred to:

ACJO 11 :⁵³a pro test by the Race Committee alleging an infringement of a Class Rule whilst racing;

ACJ012:⁵⁴a protest by the Race Committee regarding compliance of a Class Rule concerning battens in sails;

ACJ032:⁵⁵a protest by a boat regarding compliance with Class Rules regarding topmast backstays;

ACJ035:⁵⁶a protest by a boat regarding compliance with Class Rules requiring the lowering of a mainsail without the necessity of a crew member going aloft.

As can be seen from the above examples, the Jury was called upon to deal with a diverse range of issues conceming sailing matters.

1.3.4 ARBITRATJON MATTERSS⁷

1.3.4.1 Does the Jury Qualify as an Arbitral Tribunal?

Following the "Big Boat Challenge" saga in 1988 concerning the Mercury Bay Boating Club and the San Diego Yacht Club, 58 a dispute settlement mechanism specifie to the America's Cup was fust introduced on the occasion of the 28th edition in the form of a "Trustee Committee". Sin ce the 30th America 's Cup, this mechanism developed into an Arbitration Panel having jurisdiction to deal with commercial and contractual

52. See 6.35 hereunder. After this decision was issued, the matter was submitted to the Swiss Disciplin- ary Chamber in charge of Doping Cases ofSwiss Olympics (SOC), in arder to say which penalty was to be inflicted on Mr. Daubney, if any. The SDC decision was issued on January 17, 2008 but appealed by the World Anti-Doping Agency (WADA). As a consequence the case was dealt with by the Court of Arbitration for Sport (CAS). CAS issued its (final) decision on October 2, 2008 setting aside the SOC decision and declaring Mr. Daubney ineligible for a period oftwo years.

57. Contribution by Prof. Gabrielle Kaufmann-Kohler and Prof. Henry Peter, Members of the 32nd Arnerica's Cup Jury.

58. See Henry Peter, "The America~· Cup Arbitral ion Panef', ASA Bulletin 2/2003, p. 249-253; see also John Faire, Michael Foster, Donald Manasse, Henry Peter (ed.), David Tompkins "Arbitra/ion in the America

s

Cup: The XXXI America

s

Cup Arbitra/ion Panel and ils Decisions", Kluwer Law, The Hague, London, New York, 2003.

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Introduction

disputes mainly in reliance on the Protocol. The Panel coexisted with the International Jury, which dealt with technical sports disputes in applying the racing rules. For the 32nd edition of the America's Cup, the Arbitration Panel and the International Jury were merged into a single body, named the Jury (or the "ACJ").

What was the legal nature of this single body? As a matter of princip le, the legal nature of a dispute resolution body essentially depends on the parties' intent. The Protocol of the 32nd America's Cup, which simply stated that "[ ... ]the Jury shall act both as a Jury under the applicable sailing rules and as an arbitration panel" (Atticle 21.4 Protocol), was of little assistance in and of itself in understanding the intent of the parties. RoP of the Jury, 59 which were applicable to ali proceedings before the ACJ irrespective of the type of dispute at stake, were rouch more helpful. They provided that the "legal seat of the Jury" was New York (Article 2.1 RoP) and that the

"law goveming the Jury proceedings" was the US Federal Arbitration Act and the New York Convention on the enforcement of foreign arbitral awards (Article 2.2 RoP).

They also insisted that the Jury was to be impartial and respect due process norms. In addition, the RoP were no different from rules applicable before a true arbitral tribunal.

These elements undoubtedly show that the RoP were meant to apply to true arbitration proceedings.

The RoP were drafted and adopted by the Jury and not by the competitors. There is, nevertheless, a good basis to argue that the competitors were bound by the intent to provide for true arbitration expressed in the RoP. Indeed, they proceeded under the Rules without raising any objections to the relevant provisions. Under the general principle of good faith, they must be deemed to have accepted the content of those Rules.⁶⁰

1.3.4.2 How was the Jury Composed?

The Protocol provided for a Jury of five members appointed in principle by the Defender and the Challenger Commission (Article 21.1 Protocol). lt also set a number of selection criteria (Article 21.2 Protocol). ln essence, these criteria required that a jury member possess knowledge of the America's Cup and of yacht racing. In line with previous Protocols, in terms of independence it expressly authorized a juror to be a member of a Yacht Club participating in the America 's Cu p.

As a rule, the quorum was constituted of ali five members. In the event that one or more members were not available and that an urgent decision was required, the remaining members could, however, decide to reduce the quorum to four or even only

60. See Article 5 RoP: "By fi ling an APPLICATION or RESPONSE with the JURY, a PARTY agrees

to be bound by these Rules of Procedure, as arnendedfi·orn tirne to time, in accordance with the

PROTOCOL ". Of the same opinion, Thomas Schultz, "Sailing Away from Judicial lntelference:

Arbitrating the America

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^Cup",in: The International Sports Law Journal, 2006, vol. l/2, p. 27, p. 33 and Antonio Rigozzi, "L'arbitrage international en matière de sporf', Basle 2005, p. 329.

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three members (Article 21.1. (c) Protocol). This possibility was, for instance, used in ACJ002⁶¹and ACJ030.⁶²

1.3.4.3 Which Law Governs the Procedure?

The proceedings before the Jury were govemed by the US Federal Arbitration Act as lex arbitri and by the rules contained in the Protocol and the RoP as expressions of the procedural autonomy available to the parties under the lex arbitri. New York law applied as a result of the choice ofNew York as the seat of the arbitration. The seat is a legal, not a geographie concept. As such, it triggers the application of the international arbitration statute of the country of the seat, but it does not require that the arbitration be actually conducted at the seat itself (Article 2.1 RoP). In fact, the ACJ acted primarily at the venue of the races, be it Valencia or the sites of the pre-regattas. Two hearings were held in London for the sake of convenience (ACJ003⁶³and ACJ036⁶⁴),

and electronic means of communication were used for decisions taken at a distance between regattas (Article 21.6 Protocol and Article 2.1 RoP; see also below "The WIPO Electronic Case Facility (ECAF)").⁶⁵

Why choose New York as the seat and thus as the applicable arbitration law?

Why not, for instance, Valencia and Spanish arbitration law? Severa) reasons dictated this choice. The America 's Cup is founded on a charitable trust established un der New York law and subject to the supervisory jurisdiction of the New York courts.

Although the Protocol contained no choice of (substantive) law, there is a strong argu- ment to say that it was govemed by New York law because of the connection with the Deed of Gift which had established the America's Cup as a New York law trust.

Renee, the links to New York law appear closer than with other laws. These links have existed si nee the America's Cup was set up (upon execution of the fust Deed of Gift in 1857, replaced by the current one in 188766) and will remain, while the venue ofthe different editions of the Cup will inevitably change.⁶⁷More importantly, it appeared that the New York courts, unlike the Spanish or other civil law courts, would not be trou bled by the legal nature of the Jwy comprising the arbitral function of the former

64. See 6.35 hereunder. After this decision was issued, the matter was submitted to the Swiss Disciplin- ary Chamber in charge of Doping Cases ofSwiss Olympics (SDC), in order to say which penalty was to be inflicted on Mr. Daubney, if any. The SDC decision was issued on January 17, 2008 but appealed by the World Anti-Doping Agency (WADA). As a consequence the case was dealt with by the Court of Arbitration for Sport (CAS). CAS issued its (final) decision on October 2, 2008 setting aside the SDC decision and declaring Mr. Daubney ineligible for a period oftwo years.

65. See also 1.3.5 bereunder.

67. On the sa me question in relation to the Olympie Games, Gabrielle Kaufmann-Kohler, "Arbilration at the 0/ympics", The Hague, Kluwer International Law, 2001, p. 47ff.

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Introduction

Panel and the technical sports functions of the former International Jury. As a result, New York courts, if seized of a matter within the jurisdiction of the Jury in its sailing jury functions, would be more likely than others to defer to the Jury and abstain from intervening in the process.

1.3 .4.4 Jurisdiction

One must first note that the Protocol expressly recognized the Jury's jurisdiction to decide on its own jurisdiction (Art. 21.4 (i) Protocol), in accordance with the principle known as "competence-competence" which prevails in international arbitt·ation. This allowed it, inter a lia, to delineate the jurisdiction of the other bodies potentially in conflict with the Jury, primarily the AC Measurement Committee (Article. 20.2 Protocol). Speaking of jurisdiction, one must further distinguish between (i) subject matter and ⁽ⁱⁱ⁾persona) juris-

diction, both of which had to be met in a given case for the ACJ to exercise jurisdiction.

1.3.4.4.1 Subject Matter Jurisdiction

The Protocol proceeded to enumerate the categories of disputes within the scope of the Jury's jurisdiction (Alti cie. 21.4 Protocol). In substance, the Jury had jurisdiction over sailing as well as commercial and contractual matters arising among competitors or between competitors and America's Cup authorities and officiais.

In addition, certain instruments other than the Protocol expressly granted jurisdiction to the ACJ. This was especially seen in ACJ024.⁶⁸That case arose out of the application of the so-called "Allocation and Use of Base Agreement" between the competitors and ACM. It was not included in the Protocol 's list of the documents to be subrnitted to the ACJ (Article. 21.4 (a) and Article. 12 Protocol), but contained a provision submitting ali disputes to the ACJ. Accordingly, and in reliance on the general provision in Article 21.4 ( d) of the Protocol, the Protocol gave jurisdiction to the ACJ to resolve any dispute, deadlock or impasse among any competitors, SNG and the other authorities of the Event.⁶⁹Similarly, as was stated in ACJ036,7° the Anti-Doping Ru les of the 32nd America's Cup⁷¹vested jurisdiction over doping offenses in the Jury (Article 7.2.10 Anti-Doping Rules).

69. See Interim decision onjurisdiction in ACJ024; 6.23.2 hereunder.

70. See 6.35 hereunder. After this decision was issued, the matter was submitted to the Swiss Disciplin- ary Chamber in charge ofDoping Cases ofSwiss Olympics (SDC), in order to say which penalty was to be inflicted on Mr. Daubney, if any. The SDC decision was issued on January 17,2008 but appealed by the World Anti-Doping Agency (WADA). As a consequence the case was dealt with by the Court of Arbitration for Sport (CAS). CAS issued its (final) decision on October 2, 2008 setting aside the SDC decision and dec!aring Mr. Daubney ineligible for a period oftwo years.

71. See 5.2.1 hereunder.

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There were a number of exceptions to the Jury's subject matter jurisdiction just set forth. First, the amendment and interpretation of the Deed of Gift falls within the jurisdiction of the courts of New York.⁷²Second, matters related to the measurement of the ACC Yachts were under the exclusive jurisdiction of the Measurement Committee (Article 20.1 and 21.4 (a) Protocol). The ACJ had no power to review such decisions. It was empowered, however, to rule on the jurisdiction of the Measurement Committee in the event of confiict (Article 20.2 Protoco1). In ACJ034,⁷³the ACJ held that the Measurement Committee bad exceeded its jurisdiction since it bad misinter- preted the meaning of ACC Rule 44.1 to an extent that amounted to "amend[ing], alter[ing], cancel[ing] or add[ing] to the ACC Rules" (Article 20.1 Protocol). lt, therefore, voided the Measurement Committee's decision and remanded the case to the latter for a new decision to be issued. Third, the decisions taken by the Umpires on the water could not be brought before the ACJ. This is due to the fact that the ACJ was not designed as an appellate body for the decisions taken by the other America 's Cup authorities within the scope of the ir own specifie competence. Finally, disputes involving the funding and management of the regattas were not subject to the jurisdiction of the ACJ but of an ad hoc arbitral tribunal sitting in Geneva under Swiss international arbitration law (Article 22.3 (g) Protocol).

1.3 .4.4.2 Persona! Jurisdiction

The jurisdiction of the ACJ covered the competitors, ACM, and ali race authorities and officiais (Article 1.8 RoP). Under the Protocol, competitors were prohibited from resorting to the courts for any matter within the jurisdiction of the Jury, breaches being sa id to be subject to penalties such as ineligibi lity (Article 22.1 Protocol, subject to proceedings permitted in Article 22.3 Protocol).

In application of the ru! es on persona! jurisdiction, the Jury, for instance, held in ACJ006⁷⁴that it did not have jurisdiction to deal with disputes between a competitor and a sailor employed by the former. lt also was faced with two issues for whicb the Protocol did not give an express solution.

First, could K-Challenge and Mascalzone Latina be parties to the Jury proceedings, knowing that they bad filed applications before the Jury at a time when their challenges bad not yet been accepted and the time limit for accepting challenges was still running? Yes, answered the ACJ in its first two cases. Although the two teams were not competitors un der the definition of the Protocol, the ACJ's answer was positive because the RoP allowed it to grant leave to a bonafide registrant when appropriate and because it was in the best interests of the competition and of ail competitors

72. Henry Peter, "The America

s

^Cup^Arbil^ration^Panef',^ASA^Bulletin^2/2003,p. 249, p. 251 and 262.

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Introduction

under the circumstances. lndeed, the applications raised certain questions of general interest, i.e., "to what extent, if any, should the Jury accept submissions from parties that are not Competitors?"; "to what extent, if any, should the Jury give answers to hypothetical questions that are not based on actual specifie facts?"; "to what extent, if any, should the Jury offer the facility of allowing the nam es of au thors of Questions to remain confidential?". At the same time, the Jury did not intend to create a precedent and specified that it would exercise substantial restraint in granting leave to file applications to non-competitors (seeACJOOI⁷⁵[G 1 to 11], ACJ002,7⁶(15 to 18]).

Second, did the Jury have jurisdiction over individual team members although they were not signatories of the Protocol? The question arose in the last case before the Jury involving an Alinghi team member who had tested positive in a drug test.

The Jury held that "(a]ll crew members participating in the 32nd America's Cup were required to complete an acknowledgement and agreement as contained in Appendix 3 to the Anti-Doping Rules, whereby they agreed to be bound by ali of the provisions of the International Sailing Federation ("ISAF"), the Anti-Doping Ru les and the 32nd Ame1ica's Cup Anti-Doping Rules. Simon Daubney signed such an acknowledgement and agreement on 2 May 2006", and "[ ... ] therefore, the Jury ba[ d] jurisdiction to assess whether Simon Daubney breached the Anti-Doping Ru les and to decide if he committed any fault". However, because the 32ndAmerica's Cup was over at the time the ACJ was mling and there was "no question ofTeam Alingbi being involved with organised doping, ISAF ha[ d] the jurisdiction in respect of a penalty" (ACJ036⁷⁷(3 and 30]).

1.3.4.5 Multi-party Arbitration

From a procedural point of view, one of the most striking characteristics of the ACJ arbitrations is that they were practically ali multi-party proceedings. Unlike other sports events, the America's Cup allows in a rather limited number of competitors.

Within this Jimited circle, decisions of the ACJ may weil directly affect the rights of teams who had not brought the application and were not named as opponents by the applicant. As a result, the RoP organized the procedure in such a manner as to protect the rights of ali persans potentially affected by a Jury decision. More specifically, the Jury maintained a so-called Service Address List (Article 1.14 RoP) permitting it to easily notity ali competitors, event organizer, authorities and officiais of any application or other submission (Article 3.3 RoP); ali of these "parties" were granted a right

77. See 6.35 hereunder. After this decision was issued, the matter was submitted to the Swiss Disciplin- ary Chamber in charge ofOoping Cases ofSwiss Olympics (SOC), in order to say wbich penalty was to be inflicted on Mr. Daubney, if any. The SDC decision was issued on January 17, 2008 but appealed by the World Anti-Doping Agency (WADA). As a consequence the case was dealt with by the Court of Arbitration for Sport (CAS). CAS issued its (final) decision on October 2, 2008 setting aside the SOC decision and declaring Mr. Oauboey ineligible for a period oftwo years.

The 32nd America&#039;s Cup Jury and its decisions

Book

Reference

The 32nd America's Cup Jury and its decisions

PETER, Henry (Ed.), et al.

PETER, Henry (Ed.), et al . The 32nd America's Cup Jury and its decisions . Austin : Wolters Kluwer, 2009, 439 p.

The 32nd America's Cup Jury and its Decisions

)

Henry Peter (ed.) Bryan Willis

Gabrielle Kaufmann-Kohler Graham McKenzie

Henry Menin David TiUett

The 32nd America's Cup Jury

Table of Contents

Table of Abbreviations

Yacht Clubs and Syndicates

General Abbreviations

ACJECAF

ECAF

1. Introduction

1.1 THE

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1.3

32nd

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The 32nd America's Cup Jury and its decisions