America’s Cup : Dispute to Be Heard in Court

NEW YORK —  The America’s Cup, which has a 136-year tradition of hard sailing and loud arguing, will spill over into a courtroom for the first time Wednesday.

The Supreme Court of the State of New York, custodian of the Deed of Gift that governs Cup competition, will hear the San Diego Yacht Club’s argument why it shouldn’t defend the Cup against the Mercury Bay Boating Club of New Zealand next June.

The Mercury Bay Club, under the sponsorship of Auckland merchant banker Michael Fay, last week obtained a temporary restraining order pending this hearing for a preliminary injunction that would prevent the SDYC from taking any other course.

Fay bases his challenge on the basic terms of the Cup’s 100-year-old deed, which give a challenger the right to name the time and his boat. Fay has designated a boat with a 90-foot waterline, the maximum allowed under the deed, instead of a conventional 12-meter, about half the size.

Late last week, the SDYC countered with a petition to the same court to amend the deed to stipulate that the Cup could not be contested more frequently than every three years and would give the defender the right to designate the boats.

To New Zealand, that seemed an attempt to change the rules after its challenge was legally filed under the old rules.

“That’s essentially what it is,” said George Tompkins Jr., a lawyer from the New York firm of Condon and Forsythe, retained by Fay.

Tompkins’ counterpart, Ken Poovey of the San Diego firm of Latham and Watkins, said: “We’re taking the position that we’re trying to conform the deed to the practice that has been commonplace in recent years”--in other words, racing every three or four years in 12-meters.

A single judge, Carmen Beauchamp Ciparick, will preside at the hearing, although New York Attorney General Robert Abrams may greatly influence her decision.

Abrams, by state law, is the guardian of all charitable trusts, one of which is the Deed of Gift. Generally, if there is a petition to change the deed and nobody objects, Abrams would stamp his approval.

“But there are going to be plenty of objections, believe me,” Tompkins said. “The challenger would have no rights at all, except what’s conferred by the defender.

“It’s obvious (the SDYC) has been working on this for weeks, ever since our challenge (July 17). It’s now opened up into a full-blown dispute about what’s going to happen in the America’s Cup in the future.”

Fay is expected to arrive from New Zealand today. Malin Burnham, president of the Sail America Foundation, will observe for the SDYC, fueling a personal feud that started at Fremantle during the most recent Cup competition.

It was Burnham who led Sail America’s fight to have core samples taken of Fay’s controversial fiberglass boat, KZ7.

Later, Fay broke with the Cup tradition when he chose to help Australia’s Kookaburra syndicate before its showdown with Stars & Stripes, despite appeals and pressure from Burnham.