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America's Cup: RNZYS confirms Special General Meeting will be held over Home Venue

by Richard Gladwell 19 Nov 11:27 GMT 20 November 2021
Royal New Zealand Yacht Squadron © RNZYS

Royal New Zealand Yacht has confirmed receipt of a request to hold a Special General Meeting to consider amending the club rules requiring "…that the America's Cup shall always be defended in the waters adjacent to the City of Auckland".

Under the RNZYS rules, a minimum of 25 Full members must sign the petition.

"We have received a request for a SGM through Jim Farmer (who [as an Honorary Member] is not valid to vote) and since receiving this have had a productive conversation with him," RNZYS Commodore Aaron Young told Sail-World in a written statement. "While we are disappointed to have received a request in this manner, given we are all proud sailing members of the RNZYS, the Club's Flag Officers will accept this request and have offered to confirm an SGM date as soon as practicably possible, with a view to achieve an outcome that satisfies all parties."

"While we understand the intent of the motion, our view is that it is currently not in a form that is able to be implemented under the operating rules of the Club. We have asked Mr Farmer if he would like it amended accordingly and also offered a date in 2021 for the requested SGM," Commodore Young added.

Holding the Special General Meeting is somewhat problematic for the Club, which celebrates its 150th anniversary this year. Due to COVID-19 restrictions currently in place in Auckland, only groups of 25 are allowed to meet indoors.

The Club has been unable to hold its Annual General Meeting when a new Committee will be elected. That meeting was originally scheduled for August 26 and has been postponed until two weeks after COVID restrictions are eased by the NZ Government, to allow members of the 3,500 strong club to meet for the AGM.

Restrictions are due to be eased by the NZ Government around the end of November, as the country shifts to a new "Protection Framework" or "Traffic Light" system to control the spread of COVID-Delta.

It has not been announced what level Auckland will be allowed to emerge from the current lockdown. Under the Traffic Light system, if held with members physically present, the meeting would be limited solely to members holding a COVID Vaccination Certificate.

"We do, however, expect to hold the AGM before the end of 2021 and have given notice of our intention to have the AGM following this anticipated lessening of restrictions", Commodore Young explained.

Whether the SGM would be held on a different date or after the AGM was not revealed in the statement.

Long Beach considered in 1988

Whether a club was required to defend the America's Cup in its home waters or could nominate another location for the Match, arose in the Big Boat challenge in 1988 between Mercury Boating Club and San Diego Yacht Club.

For a time, San Diego YC considered a Match venue off Long Beach, Calif., as their Defence Team believed that conditions further north of San Diego would be more favourable to the Defence.

The late James Michael was a San Francisco domiciled attorney with over 40 years of practice, specialising in litigation. He was a senior partner in San Francisco's largest law firm. A keen sailor, he was a member of the New York Yacht Club for over 26 years, serving on its Board of Trustees during 1964-77 and on its America's Cup Committee during 1971-83. Because of his legal background and intimate experience with the America's Cup, Michael says he "was usually the point man for the Committee in disputes or questions that arose regarding the Deed of Gift, the Conditions of the Match and the interpretation and application of the l2-Metre Measurement Rule…"

Around the time that Stars and Stripes were hypothetically considering a shift in Match venue, Michael produced an interpretation of the Deed of Gift, the 19th-century document which governs the conduct of the America's Cup.

The Deed of Gift was especially relevant for the 1988 Match, as the event was conducted under what is known as the default conditions of the Deed, which apply "In case the parties cannot mutually agree upon the terms of a match...."

At that point, the question of Match venue had never been explicitly answered by the New York Supreme Court, the adjudication body for matters concerning the interpretation of the Deed of Gift.

James Michael, in part of an unpublished manuscript, summarised his interpretation of hypothetical venue options, and addressed the options available to the Defender.

"On the question of venue, nothing in the Deed expressly or impliedly authorises the defender to change the venue from its home waters, unless, and only if, it is done with the mutual consent of the challenger. "

Michael then extrapolated his reasoning and concluded: "Thus, if the issue of venue should come squarely before the Court, it is submitted the ruling will be that the defending club must hold the match in its home waters, unless the challenger mutually agrees to move it elsewhere."

Ainslie sympathetic

Following the successful Defence of the 36th America's Cup in March 2021, the New Zealand Government and Auckland Council were given a three-month exclusive period to negotiate suitable arrangements for the 37th Match in Auckland. Those negotiations failed to reach an agreement, and the Venue Hosting process, which Emirates Team New Zealand had been conducting through UK based Origin Sports, was revived in late June.

Those negotiations are ongoing, and a venue decision may not be reached until March 2022. A long list of 35 venues is believed to have been compiled. Currently, four options are under consideration, maybe more given that Emirates Team New Zealand or RNZYS have not confirmed their shortlisted venues.

Ben Ainslie, CEO of INEOS Brittania, the team of the Challenger of Record, the Royal Yacht Squadron, spoke with a group of international sailing media earlier this week on the occasion of the announcement of the Protocol and America's Cup Class Rule for the 37th Match and Preliminary Events.

"It's always hard to be the Defender when there is a well-organised group of challengers against you, and that hasn't changed for Team NZ, " Ainslie noted. "But to Grant's credit, they have tried hard - I wouldn't say they have given up all the advantages of being Defender, but they have certainly given away a few in order to try and do the right thing for the sport."

"Grant has been very open with us as to the discussions he has been having, as to where the venue might be. We have to trust him and Team NZ to be open with the other competitors., and I think they will be."

"I think they are trying to do the right thing, but they obviously have to think about their own team. They are obviously trying to do the right thing by the event.

"We have taken great care to clarify with our members and stakeholders the respective roles and obligations of the RNZYS and ETNZ as it relates to the America's Cup," explained Commodore Young in the statement to Sail-World. "This is based on a contractual and working relationship between RNZYS and ETNZ of over 25 years."

"As part of this agreement, ETNZ has responsibility for conducting the 37th America's Cup defence, with all aspects of the AC37 organisation, management, and fundraising, resting with them. In return, the Club is not required to make any financial contribution to America's Cup activities; and RNZYS – its officers and members – are fully indemnified from any liability, financial or otherwise. These have been the fundamental principles of our contractual arrangements since the 1995 challenge. It is through these arrangements that we are now in the privileged position of being the Trustee of the Cup for a fourth America's Cup cycle.

"We have complete confidence in ETNZ to run the affairs of the team and do what it takes to ensure a credible and successful defence and deliver another highly successful event. And all of this is a difficult environment, where they are up against some significant financial challenges and other teams who are considerably more resourced than they are.

"We have said all along that it is the RNZYS's preference for AC37 to be held in New Zealand; however, it needs to be viable to allow this to happen. What we and the team have allowed ourselves is time to do everything possible for this to happen. It is also very important to us that ETNZ remains viable, that we keep the team together, and we honour our commitments and undertakings with our Challenger of Record, RYS and INEOS Britannia.

"Over the last few months, ETNZ has kept the RNZYS up to date with all relevant communications (almost daily conversations), and RNZYS has acted when necessary in our role as Trustee. Legal threats and misinformation do not help the leadership at the RNZYS (or ETNZ for that matter) work towards what we are all here for – "the encouragement of Corinthian yachting generally and such other purposes connected with aquatics….".

"To encourage Corinthian yachting, the Club should be striving to (again) win the oldest trophy in international sport. The General Committee will continue to work on behalf of members, to do just that," Commodore Young concluded.

The bottom line with the Venue selection would appear to be that Emirates Team New Zealand are free to choose a location for the 37th America's Cup. If it is outside the home waters of their Club, Royal New Zealand Yacht Squadron must get the agreement of the challenging team INEOS Britannia and the Challenger of Record, the Royal Yacht Squadron.

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