Alinghi give ultimatum to Team New Zealand

Grant Dalton: given ultimatum by Bertarelli?

Team New Zealand will be kicked out of the next America's Cup if they don't drop their legal action against holders Alinghi.

Greg Ford writes in the Sunday Star Times:

In a new and serious development between the two feuding camps, the Sunday Star-Times has been told Alinghi recently sent Team New Zealand a legal letter with that ultimatum and if the Grant Dalton-led syndicate doesn't comply by December 15 the Swiss team owned by Ernesto Bertarelli plans to write a protocol for the next cup in 2010 specifically designed to exclude the Kiwis.

This explosive development has come as a 'bolt out of the blue' for Dalton. He said both parties had been negotiating an out-of-court settlement in recent weeks.

'And we thought we were pretty close to a settlement but then this letter arrived,' he said.

'They are trying to bully and intimidate us which is not going to get anyone anywhere really.'

Team New Zealand mounted a two-pronged legal case against Alinghi earlier this year. Dalton claimed Alinghi broke a promise to hold the regatta in 2009 and sought $60 million in damages.

It also contended Alinghi's protocols, or rules, for the cup were unfair and breached trust laws.

Alinghi returned serve and said that, when Team New Zealand entered the regatta, they agreed in writing they would settle any differences by mediation rather than in court.

Alinghi skipper Brad Butterworth supplied the Star-Times with the paperwork he claimed backed their case.

Alinghi have also been fighting a separate court battle with the Larry Ellison-owned Oracle syndicate, which is the main reason why the regatta has become becalmed.

Bertarelli, who won the most recent appeal in the ongoing saga, holds the whip hand in this battle and last week announced he would plough ahead with the next regatta in 2010.

Dalton said he 'applauded' the decision and is desperate to be part of the regatta. But that's now far from certain, unless Team NZ drop their case.

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Sail-World comment:

Alinghi and SNG are already on a course set for the 33rd America's Cup. Emirates Team New Zealand has already entered that event. Therefore they can't be refused entry to an event they have already entered, and been accepted.

The Defender is entitled to close entries by a certain date - now set at 15th December 2008, however this date would only affect teams who have not yet entered like BMW Oracle Racing, and others.

Once entered Team New Zealand becomes subject to subject to the conditions of the 33rd AC Protocol, which provides for an Arbitration Panel to hear disputes. That body has long been claimed to be independent by Alinghi parties.

Therefore it is a little odd that, if reported correctly, that Bertarelli can threaten to exclude a team on the basis of a yet to be held Hearing on a matter of breach of the 33rd AC Protocol. That is pre-determination of the outcome, and also calls into question the independence of the Arbitration Panel.

Secondly, if claims of amendment to the Protocol to exclude certain teams are correct, that also calls into question the oft stated position of the Alinghi parties that they are flexible and open to change in the Protocol,and that they are working co-operatively with the Challengers. If alterations to the Protocol are made, at this stage, at the behest of the Defender, that again calls into question the stance long taken by Alinghi and SNG that the Protocol is designed to advance their 'vision' for the America's Cup and improve the regatta, and not to 'jimmy the rules' so that the event is controlled in the interests of the Defender only.

It is arguable as to whether the agreement which Team New Zealand believe that Ernesto Bertarelli has breached, is actually subject to the jurisdiction of the Arbitration Panel, since it was made outside the Protocol and formal entry process. It related to an agreement to stage the 33rd America's Cup in 2009, and with penalties for delay into 2010 and 2011. That enabled Team NZ to plan ahead with some certainty.

Had Bertarelli not made that side agreement, then it is probable that Dalton would not have entered Team New Zealand in the event. The subsequent Media conference held by Bertarelli would have been a rather hollow affair indeed. Instead, Bertarelli was able to pull a major surprise and gained real credibility for his position. Later Dalton believed that Bertarelli had been inflexible and pedantic in his treatment of the issues between the Defender and Challengers, and that a small shift by Bertarelli would have been sufficent to resolve all outstanding issues, and allow the America's Cup to take place within the agreed timeframe.

The report in the Sunday Star Times, if accurate. only serves to underline the justification for BMW Oracle Racing and GGYC to have taken the action they have in the New York judicial system on the Protocol for the 33rd America's Cup.

Richard Gladwell
NZ Editor