Arbitration panel make their ruling

On the issue of OneWorld having 'secret' Team New Zealand design information

Friday August 16th 2002, Author: Louis Vuitton, Location: Australasia
The America's Cup Arbitration Panel (ACAP) has today (Friday) released its interpretations on the matter of OneWorld Challenge's request for interpretative rulings of several articles of the America's Cup Protocol, the document that lays down many of the rules of the America's Cup competition. OneWorld Challenge originally asked for the interpretations in December 2001. OneWorld Challenge will start the Louis Vuitton Cup with a negative score of one point.

The ACAP was asked by OneWorld Challenge to interpret whether it was in breach of the America's Cup Protocol,

" the context of concessions by OneWorld Challenge, confirmed by the affidavits of the relevant designers, that they had in their respective possession, whilst engaged in design work for OWC, (a) measurement certificates for the yachts NZL-57 and NZL-60 (both TNZ ACXXX yachts), (b) carbon fibre materials data certificates issued to TNZ by its suppliers in respect of ACXXX yachts and (c) sail and mast design and performance information relating to the sail design programme of Prada for ACXXX."

In its review the ACAP had to ascertain whether OWC had breached Article 13 (Reconnaissance) and whether the design information was "...acquired as a result of an 'intentional illegal act', performed on behalf of OneWorld Challenge, for the purpose of attempting to 'gather design and yacht performance data - about (Team New Zealand's) yachts through illegal (or) clandestine means' (Article 13.1)."

The Panel's view was that the evidence for such a case would fall short of establishing such breaches.

The ACAP were also asked to determine whether OWC had breached Article 15 (Eligibility of Yachts), and in particular Article 15.3 (c).

This article is concerned with designers being "separate and independent" having no involvement with other syndicates. On this issue the ACAP found that OneWorld Challenge was in breach. In its awarding of a penalty the ACAP:

"...took into account, as a mitigating factor, that it was OneWorld Challenge that brought before the Panel the facts that have resulted in the findings that it was in breach. Had it not done so, a more severe penalty would have been warranted."

The Panel also decided that:

"Because of the importance of the prohibition in Article 15.3(c), the Panel considers that a deterrent penalty is necessary to emphasise to participants that there is a strict obligation on any syndicate that engages a designer from another syndicate in a current or past America's Cup contest, to ensure that that designer has no relevant design information in his or her possession. A financial penalty, in the Panel's view, does not sufficiently emphasise the seriousness of the breaches or the necessary deterrent element."

The penalty the Panel imposed was to deduct one point from OneWorld Challenge's total score from Round Robins One and Two of the Louis Vuitton Cup. OneWorld Challenge was also instructed to pay the costs of the ACAP, which amounted to US$13,500.

After the ruling became public OneWorld Challenge's CEO Gary Wright commented:

"We always believed we were doing the right thing coming forward and bringing these issues before the panel to get them resolved once and for all. They are issues that many teams will face in the years ahead as the America's Cup's dimension becomes increasingly multi-national. We are obviously pleased that we have these issues behind us and we respect and thank the Panel for their hard work and diligent investigation of the facts."

He then added:

"Launching us into the upcoming Louis Vuitton Cup with a one-point penalty, especially among this extremely strong group of challengers, is tough. We accept the Panel's decision and we are thrilled to be participating in what we believe will be a tremendous Louis Vuitton Cup in just seven weeks time."

For the Royal New Zealand Yacht Squadron's Team New Zealand, syndicate head Tom Schnackenberg said "We are happy with this outcome. That is the end of it as far as Team New Zealand is concerned."

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