Lucien Masmejan, lawyer for Alinghi, replies to BMW Oracle's claims
[Source: Alinghi] On the evening of the 12th November, during settlement discussions, BMW Oracle Racing unexpectedly announced five new demands that directly affect fundamental arrangements that have been recently agreed by all entered competitors in the 33rd America's Cup. Alinghi has lost confidence in BMW Oracle having any intention of negotiating a settlement in good faith.
BMW Oracle has been given every opportunity to enter the competition and join the consultative process with all competitors to develop the rules for the 33rd America's Cup. They choose to absent themselves from that process. Société Nautique de Genève, as Trustee of the America's Cup, will not allow a third party challenger who has made no commitment to the 33rd America's Cup, a veto right over rules and arrangements agreed by all the other committed competitors.
Alinghi has given BMW Oracle until the 16th November to decide whether they are going to join the competition and drop their law suit, or jeopardise a 2009 America’s Cup event. They have selfishly chosen to put a 2009 event in jeopardy.
Alinghi will now await the decision of the Supreme Court of New York, and hopes BMW Oracle will abide by the courts judgment and not seek to continue their litigation through appeals intended to further disrupt the 33rd America's Cup, and damage the ability of other Challengers to participate for their own competitive gain.
Lucien, what is your role?
I’m a board member at Alinghi and I am acting in my capacity as a lawyer to represent the interests of Alinghi in certain critical circumstances.
GGYC is disappointed that promising settlement negotiations have been rejected. Is this true, and if so, why, did Alinghi apparently call and say the deal was off?
The truth is that we called and we told them that we are not going to further negotiate with them and they have to enter the competition and drop their law suit. This is a consequence of a whole sequence of events, which I may briefly summarise as follows: Last week I got a call from Russell Coutts saying that he wanted to know why settlement talks did not move faster and I told him ‘you must define your position and know what you want to do’. After that call, we had several phone calls with Melinda Erkelens, the attorney of BMW Oracle, and I thought the negotiations were progressing fairly and the basis for these was the nine point letter sent a few weeks ago by Oracle. On Monday night, Melinda called me and she said ‘this is fine, but we have been discussing with Russell and he now has five additional points which were not on the list’. Amongst them was one major point which was the authorisation to two-boat test starting 1 March 2009, which completely destroys the programme of cost-cutting measures which is in place with the agreement of the challengers. So she came back with these five new issues, and I told her that I can’t accept this and that I need to consult with my people, I suggested that we take the night to go over those points. Tuesday morning, I called her back to say that these new points are a big problem. She said ‘these are important for us, you have to think about that. We need those points’. Then we did an analysis within our team and we said ‘look, you can’t negotiate on this basis. You try to resolve problems, you identify the problems, you focus on those problems, you get close to solving those problems and then the other side comes back with five new problems’. It’s a never ending story and it is not the first time this happens in this negotiation, so we can’t negotiate any longer on this basis.
Why did you choose to make the deadline for GGYC to clarify its position as regards participation 17:00 November 16th and what was the motivation for this ultimatum?
The motivation is in order to organise an event. To move forward in the Cup with the support of all the challengers, you need certainty, both on the teams’ side and on the event organisation’s side. If BMW Oracle’s law suit has created anything, it is uncertainty. The deadline is deemed to try and bring us all back to some certainty. At least, once the deadline has expired we will know whether BMW Oracle will enter and drop the lawsuit or will not enter and will not drop the law suit. This way we will be able to make decisions in a universe where at least we know they will not enter.
It is claimed that GGYC were offering to drop their legal challenge in return for making the agreed changes to the rules...Which rules and why are the changes apparently now unacceptable?
I’ll give you the list of the five issues… There are quite a few points which were under discussion and which I will not come back to as they have been mentioned previously, but the five that came back during Monday night’s discussions were; that they were concerned about the possibility of substitution of boats, they did not understand how that would work and they wanted to add some wording in the competition regulations; they were further wanting to add a system with safeguards, meaning that the best team in the Challenger Selection Series should get more sails; they were wanting to modify the format of the CSS.
They also wanted to authorise two-boat testing from 1 March 2009, which is the major point that I mentioned above and they were wanting to drop the prohibition to sail in August which relates to the ‘no-sail’ period around the Formula 1 racing. Those are the new points and they had further points which had been discussed previously and which we are not talking about right now.
The class rule and particularly the competition regulations have been agreed upon by the group of competitors for the 33rd ACup. Is Alinghi in a position to negotiate these with a third party that hasn’t even entered?
No Alinghi is not in a position to negotiate these points. If by any chance somebody would have to modify the competition or event regulations or the class rule that could only be done by AC Management after a process of consultation. So that is nothing to do with Alinghi. Furthermore having reached a fair compromise - agreed by all competitors - why should we, just because BMW Oracle is unhappy with one or two rules, change those rules? Why are rules that are good for some competitors not good enough for BMW Oracle?
Are you likely to reconsider your position and continue further discussions - as GGYC apparently hope?
No. We will not. There is a clear deadline and now it is not about further discussions, it is about them deciding whether they want to enter and if they want to drop the law suit.
Russell Coutts claims in his letter that you must have known this ultimatum would be rejected. Is this true?
No. How could we know that? First of all the ultimatum has not yet expired so they can still enter. How could I know what they are going to do? What I do know is that we can no longer live in this situation where every time we believe we are making small progress in the discussions, Russell comes back with additional items. If it is his matter to negotiate, that’s fine, but we can’t negotiate in this way and having experienced this scenario several times now, we have decided that the negotiations have to end. They have to decide, they know the rules, if they want to enter, then they can enter.
Has Alinghi decided, as stated by Coutts, that it does not want to race for the Cup in 2009?
That is just wrong. We hope to race the Cup in 2009, but to be able to race in 2009 we need to have the uncertainty lifted. And the only way to eliminate the uncertainty is for BMW Oracle to drop their law suit and to enter the competition.
What is the next move?
The next move is first to wait for the response of BOR within the Friday night time limit. And if they do not respond, or do not enter, or do not drop the law suit, then next week AC Management will reassess the situation and the true possibility of organising the regatta for the target of 2009. A decision will have to be made very soon after the expiry of the time limit.
Is there anything that you would like to add on the matter to the sailing media and public who are obviously very interested in this situation?
I have just one thing to add: I repeat to BMW Oracle that in the interest of the America’s Cup as a whole and for the future of the Cup, they should become sensible and withdraw their law suit in New York and enter the competition. I still hope they will do this before Friday night.