Thursday, 31 January 2008

Same Old, Same Old...

The action continues unabated in the Americas Cup court case, but frankly, from the beaches of Northern Peru and the cloud forested flanks of Machu Pichu, its pretty hard to get excited about the to and fro of the legal arguments, which are no closer to being resolved. I keep thinking I should do a proper blog update, but, well, the surf is looking pretty good...

For those who want to follow the latest court wrangling, then I can point you to the ever reliable Cory Friedman, writing for Scuttlebutt...

Normal service will be resumed as soon as I return to the frozen north, but at this rate of legal progress I very much doubt there would be anything significant to report if I stayed here till the end of the southern summer...

www.markchisnell.com

Mark Chisnell ©

Wednesday, 16 January 2008

A DoG fight between CaTs…

It’s been sliding this way for a while, but events in the last couple of weeks confirm that the America’s Cup has slipped off the edge into a looking glass world where nothing is as it seems, or as anyone says it is…

Exhibit 1

Posted on the Alinghi website, where Tom Schnackenberg gave his views on the 90’ long barge that he (apparently) believes Oracle will be using in the Deed of Gift challenge. We talked in the last post about Alinghi’s latest legal contention to the New York State Supreme Court that the Golden Gate Yacht Club’s (GGYC) challenge is invalid. The Société Nautique de Genève (SNG)/Alinghi argument is that an error on the GGYC boat certificate forces the club to turn up with a 90 foot wide mono-hull, and that the boat would be so unseaworthy as to be unfit for the race course, thus invalidating Oracle’s challenge. Or something like that. Next thing we know, Schnackenburg appears on the Alinghi website discussing how little Rolf Vrolijk (Alinghi’s head designer) knows about the sailing barges of his Dutch homeland, and how this puts Alinghi at a disadvantage.

It’s a joke, Jim, but not as we know it.

Exhibit 2

Posted on the BYM website, a story all about how the word ‘keel yacht’ can’t be applied to a multi-hull, despite the arguments of the GGYC, posted on their website. At least, I think that’s what it’s about as my eyes started to glaze over half way down…

Then came the day in court - January 14th you will recall was the day that Justice Cahn was going to make the order from the November decision in Oracle’s favour, which would give us a date for the next America’s Cup - a race between Oracle and Alinghi under the basic definitions of the Deed of Gift. A proper DoG fight. Or is it a cat fight? I know, it’s a dog fight between cats – as I said, it’s a looking glass world.

Not much happened in court, or rather a lot happened, but it got us no closer to a decision or a date for the match.

Exhibit 3

Posted on the GGYC website - their take on the court proceedings - they were happy that the Judge would soon sign an order to enforce the November decision and were pleased with the day.

Exhibit 4

Posted on the Alinghi website - their take on the court proceedings - they were happy that Justice Cahn had decided not to issue an order and were pleased with the day.

If there is any chance of sense on this matter, it resides in the writing of Cory Friedman, who continues to follow the case affidavit by memo of law for Scuttlebutt, with Part 12 posted before the January 14th court date. So far, Friedman’s writings on the matter have been a model of clarity and precision, even for us legal laymen. But such are the arcane details of this case that even he is now struggling to make it seem straightforward. But, on your behalf, I persisted with stuff like…

‘On or after the settlement date, now effectively January 14, 2008, Justice Cahn will enter an Order. Until he does so, there is no order to affect. Indeed CPLR 2221(d)(3) mandates that a motion to reargue “shall” [mandatory] be made within 30 days after the order in question is entered and served with notice of entry.’

Now, you would think that the issuing of an order is a kind of digital, one or zero, issued or not-issued sort of event. But no, it looks like we're in a grey, statistical world of order issuing a la Schrödinger's cat, with the state of the order depending on some quantum mechanical uncertainty - which is doubtless only right and proper in this looking glass Cup.

Anyway, essentially Friedman dismisses the SNG/Alinghi case in Part 12, not least because Hamish Ross (Alinghi’s general counsel) previously swore to the court, (supported by Fred Meyer, SNG Vice commodore) that the 90 by 90 foot boat in GGYC’s challenge could only be a multi-hull. So it’s tough for them to turn around now and say it sounds like an unseaworthy mono-hull. Friedman states, if this was a trial, counsel’s next question would be, ‘Were you lying then, or are you lying now?’

It makes the whole ‘keel yacht’ (or bargegate, if you like) issue moot, and Friedman reaches the conclusion – as this blog has previously - that the whole thing is just about delaying the sailing part of the game until Alinghi can catch up with Oracle’s headstart on multi-hull design.

Remember how one of the primary reasons this whole thing kicked off in the first place was because Alinghi had introduced a new boat for the next Cup, without any prior discussion with the Challengers, and was perceived to have got an advantage in the design race by doing so?

What goes around, comes around, even in the looking glass world.

Friedman then went to court to watch events on January 14th, and came back and posted Part 13 for us afterwards. And yes, the number does seem significant, as things have moved onto another plane of complexity, with different issues now before the court. But as I understand it, it works like this…

The issue of whether GGYC is a proper challenger (based on SNG’s arguments about the invalid boat certificate – bargegate – and others) will be heard on the 23rd January.

Then, if GGYC is still the challenger after that hearing (i.e. SNG lose on the 23rd), the court hearing to sort out the order pending from the November decision in GGYC’s favour (which should tell us when the Cup match will be) will be held on the 28th January.

After that, whatever the order says, SNG will appeal it anyway, and the whole thing gets carted off to the Appellate Division, where we all 'return to go' and the only people who 'collect £200' (or the equivalent) are the lawyers, anyone still on a salary at Oracle and Alinghi, and those who scored a retainer from any of the challenging teams that still have the money to pay them.

In the meantime, Alinghi get to work on sailing cats, while officialdom in Valencia is losing patience with the whole affair (much like the rest of us) and want their port back. Given that no teams, except Oracle and Alinghi, are likely to be sailing out of their bases in the short to medium term this seems entirely reasonable.

And finally (which seems appropriate in the week that News at Ten returned to British tv screens), it appears that Barry Ostrager, SNG’s new lead counsel, was… ‘lead trial counsel for Swiss Re in the highly publicized insurance coverage dispute involving the World Trade Center tragedy, which resulted in a unanimous jury verdict in favor of Swiss Re.’

So the man that litigated and won the insurance claims from 9/11 is now spending his (doubtless incredibly expensive) time, sorting out a sailboat race…

It’s a looking glass world.

But I’ll leave you with the positive note that Friedman strikes in his final ‘graf, after pointing out that Ostrager doesn’t believe the case should be in court, and knows the kind of top class mediator’s that might just bring Bertarelli and Ellison to a resolution…

‘A change of counsel can often have a positive effect on a case. Picking up the phone is a major change. Coming in after a loss on summary judgment, new counsel has to be candid with the client about how deep the hole they are in really is, if for no reason other than self-preservation. New counsel is also free from blame for the existing situation. New counsel is thus in a much better position to advocate for a reasonable approach to settlement. Of course, first he or she has to fight like hell to claw back into the race and bank some credibility with the client. Having bested Herb Wachtell in the mammoth World Trade Center Insurance Litigation, Barry Ostrager had the clout to get this gig and has the skills and resources to litigate for a long time, if he can convince the Appellate Division to grant him a stay of the order Justice Cahn will enter. That is not by any means a gimme. He also has the clout to get it resolved. The jury is out and we shall see how it unfolds.’

We can only live in hope. And if not hope, then that bit about Ostrager being able to litigate for a long time means it might be time to start looking for something else to write about...

www.markchisnell.com

Mark Chisnell ©

Wednesday, 2 January 2008

Retrenchment...

Hope you all enjoyed a relaxing Christmas and New Year break – because the Alinghi lawyers certainly didn’t…

The Swiss team has followed up their pre-Christmas barrage of new legal issues with an appeal posted in the New York State Supreme court on the 27th December. The latest contention is that the Golden Gate Yacht Club’s (GGYC) challenge (on behalf of Larry Ellison’s Oracle team) is invalid, because it didn’t accurately describe the challenging yacht. The court documents have been posted on the America’s Cup website, along with a press release.

The GGYC’s challenge can still be found on their website and you’ll see that it describes a keel yacht of ninety feet length and beam. As soon as everyone saw this, they thought… multi-hull. But Alinghi are arguing that this assumption is at odds with the words ‘keel yacht’ which implies a mono-hull. They reckon the GGYC challenge should go the same way as that of the Club Nautico Espanol de Vela (CNEV), because a ‘keel yacht’ or mono-hull to those dimensions would be so misshapen that it wouldn’t be fit for the race course.

This is what Lucien Masmejan, lead counsel for Alinghi’s challenging club, Société Nautique de Genève (SNG), had to say – ‘The purpose of the boat certificate is to give the Defender a precise idea of what the challenging boat will be in order to prepare its Defense. The history of the Cup has shown how important was the adequacy of the certificate with regard to the validity of the challenge… We want to make sure this is the boat they would show up with and not a multi-hull, or their challenge would deem to be invalid.’

But my reading of the recent history of the Cup would indicate the opposite – the New York State Supreme court had no problem with Dennis Connor defending in a catamaran when Michael Fay turned up in his 135 foot mono-hull in 1988. So if the defender can use whatever type of boat comes to hand, then why do the semantics of the challenger’s boat certificate matter? I suspect they don't, and I also suspect that many at Alinghi know this - as we've suggested before, they're just stalling. They need to put the date of the Cup back as far as possible to catch up with Oracle's multi-hull programme, and this is just a legal tool to that end.

Understandably, the GGYC’s response was swift, posting comments on their website the same day, ‘If these arguments were valid they would have been presented months ago,’ according to Tom Ehman, Oracle’s spokesman. ‘But unfortunately they now look like a rather desperate measure by Alinghi's new lawyers. We are confident they will be rejected by the Court.’ Most observers are giving these arguments equally short shrift – for instance, Richard Gladwell does a nice job of taking them apart in a Sail-World article, and it will be interesting to see what Justice Cahn makes of them when the parties return to court on the 14th January.

In the meantime, GGYC and Oracle then followed up their initial response with a statement from CEO Russell Coutts, two days later. It told us what most people have expected for some time – that Oracle will compete for the next America’s Cup under the basic provisions of the Deed of Gift. Coutts reckoned, ‘We had hoped to negotiate a conventional regatta under the Deed’s mutual consent provisions. But the Defender has made it clear to us and the America’s Cup community that they will not negotiate. We are now fully committed to a multi-hull event in 2008.’ Someone, somewhere started laying up carbon fibre on a bloody great multi-hull at about the same time as that announcement was posted - if they hadn't already.

If nothing else, this clears the air – it’s now a straight fight between Ellison and Bertarelli and their chosen intermediaries, both legal and sailing. But it’s obviously not good news for any of the other teams, who can no longer pretend that they are doing anything other than standing on the sidelines, watching. Sir Keith Mills at Team Origin had already announced a retrenchment back in mid-December, ‘My principal goal now is to keep TEAMORIGIN together so as to be able to compete for the America’s Cup at some time in the future. Without any certainty today as to when, where and how that will be I am reluctantly forced to slow things down and stand the team down from full operational mode.’ There are similar noises coming out of Team New Zealand, United Internet Team Germany and Desafio Espanol.

So it’s a wintry New Year for the America’s Cup community, although in reality, things aren’t that much worse than last time. There’s still every chance that there will be a multi-challenge Cup in 2011 – a four year gap, as there was between 2003 and 2007, and shorter than the endless wait between 1995 and 2000, when the Kiwis defended for the first time. But it could have been so different, and so many plans have been laid and lives altered, only for this to completely derail it all…

From the sailor’s point of view, the great thing about the Cup has always been the vast sums of money that some people are prepared to spend to win the thing. It doesn’t just mean good salaries; it means money for research and learning stuff about boats that doesn’t happen anywhere else. But the billionaire bloated budgets come at a price – the whole game is played at the whim of the owners, and every so often, something like this is going to happen.

But there is a danger that the influx of out-of-work Cup sailors into other areas of the sport – like the TP52’s for instance – might have the same impact as during the last Cup hiatus in 1988-90. There was a marked increase in professionalism in the old International Offshore Rule (IOR) boats, as the AC class of ’87 looked around for somewhere else to cut their competitive teeth. And the 1989 Admiral’s Cup turned out to be the beginning of the end for both that regatta and the IOR (guilty as charged, m’lud).

But I think things are different now – the Fremantle America’s Cup was a step change in the numbers and outlook of professional sailors. And while both the numbers and the professional standards have been growing steadily ever since then, I don’t think the 2007 Cup had a comparable, paradigm-shifting effect like the event twenty years earlier. So while you can expect to see the TP52 fleet gear up another level this summer, with Cup sailors and some teams focusing on it as an alternative outlet for their activities, hopefully the class and the sport have developed sufficiently for that to be a good thing, not a bad one.

And things are still bright-ish from the perspective of the America’s Cup spectator. I suspect a catamaran challenge is going to be well worth watching. Not for very long, mind you, but for those first few minutes of the first race, it’s going to be must-see, water-cooler entertainment of the highest order…

www.markchisnell.com

Mark Chisnell ©