The latest dispute between Team New Zealand and Challenger of Record Luna Rossa will go to the Arbitration Panel.
Team New Zealand failed to pay the US$300,000 entry fee for next month's America's Cup World Series event by last Friday's (November 13) deadline.
They wired the money on Tuesday, claiming it was within seven working days of the deadline. But the notice to Challengers, sent out on Friday, November 6, stated it had to be paid within "seven days", not "seven working days".
The Challenger of Record says Team New Zealand's payment is too late.
The three Challengers American Magic, INEOS Team UK and Luna Rossa paid their entry fee on time.
While it was initially thought Team New Zealand could be let off with a warning, the Herald understands the Challenger of Record will play hardball over what they consider a "big mistake".
The relationship between the Challenger of Record and defender has soured over a variety of issues including the use of the inner harbour courses B and C, arguments over the wind strengths for the regatta and just last week claims from Luna Rossa skipper Max Sirena that the Team New Zealand designed Foil Cant System is of poor quality, a claim backed up by rival challenger INEOS Team UK.
The failure to pay the entry fee on time could see Team New Zealand excluded from the three-day World Series regatta next month.
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It would mean they would only have the one-day Christmas Cup race to test themselves against the Challengers who begin the Prada Cup Challenger series in January.
The parties are also at odds over the format for the World Series regatta with a Team New Zealand statement yesterday saying "we are still in negotiation with the challenger of record about the race day format for the two regattas which we are well apart on at present".