Larry Ellison wins latest court battle over America's Cup

oracle-founder-wins-latest-court-battle-over-americas-cupOracle founder Larry Ellison and Ernesto Bertarelli have a lot in common. They are both billionaires, racing sailors, and, oh yeah, they both want to control where the America's Cup is held when it begins in February 2010.

Ellison's Golden Gate Yacht Club scored a small victory over Bertarelli's Societe Nautique de Geneve on Tuesday in a New York State Supreme Court. According to court documents, Justice Shirley Kornreich ruled that Ras al-Khaimah, part of the United Arab Emirates, where Bertarelli's team has already begun training, is ineligible to host the sailing race.
Ellison's Golden Gate Yacht Club is represented by David Boies, of Boies, Schiller & Flexner, who is arguably one of the toughest litigators in the world (he represented George Steinbrenner in a suit against Major League Baseball; represented Maurice "Hank" Greenberg formerly of AIG; and even represented the Justice Department in the case it pursued against Microsoft).

Boies argued about security concerns should the race be held in Ras al-Khaimah, including the risk of a terrorist attack on Americans. The Ras al-Khaimah course would take the boats to within 80 miles of the coast of Iran. But in perhaps the most interesting aspect to the case, Boies cited the 19th-century document which governs America's Cup racing. Titled the Deed of Gift, it stipulates that the race, if held between Nov. 1 and May 1, must be held at a Southern Hemisphere site. It was this document that Justice Kornreich based her decision on, saying she did not feel she could deviate from it.

This hearing is only the latest drama in what was described by Judge Kornreich described as "this next permutation of an already lengthy litigation involving the America's Cup Race."

Indeed, another suit filed by the Golden Gate Yacht Club contends that another challenger, Club Nautico Espanol Del Vela, was not qualified to challenge Societe Nautique de Geneve, winner of the 32nd race, to compete in the 33rd. The New York State Supreme Court heard that case and agreed with Golden Gate; its decision was later reversed, then reinstated in April 2009. Several more court hearings have ensued since over a number of different issues, including Societe Nautique De Geneve's alleged breach of fiduciary duties as trustee of the America's Cup. The America's Cup is a trophy awarded to the winner of the world-renowned yacht race, which has been held 32 times since 1852.

Ironically, part of the Deed of Gift reads as follows: "This cup is donated upon the condition that it shall be preserved as a perpetual Challenge Cup for friendly competition between foreign countries."

Expect the case to be appealed by attorneys representing Bertarelli and Ras al-Khaimah.
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