Up to three of the six challengers for the 2021 America's Cup in Auckland are the target of legal action to be heard by the Cup's arbitration panel.
Emirates Team New Zealand yesterday released a brief statement confirming the panel will address a "case underway involving applications in relation to requested Protocol Amendments and the validity of Late Entry Challenges".
Further detail was not disclosed; America's Cup teams go into communications lockdown when the Cup's arbitration panel is called into action.
However, yachting sources indicate the case involves late payments by up to three teams – certainly the Dutch challenge, possibly that of Malta and even the US's Stars & Stripes.
The Dutch entry may have triggered the involvement of Team New Zealand's longtime ally and Challenger of Record for the 2021 Cup, Luna Rossa.
The joint challenge from the Royal Netherlands Yacht Club Muiden and Royal Maas Yacht Club needed a change in the protocol, the document which sets the rules for the design, construction, crewing and racing of the boats.
The Herald stated last year that the announcement of the Dutch challenge may be the first real test of the relationship between Team New Zealand and Luna Rossa.
"While the defender has an obvious motivation for allowing another challenger entry, Luna Rossa (and other challengers, come to that) has an equally obvious incentive to decline. Why would a competitor spending mega-bucks on an America's Cup challenge open the door for someone who could potentially beat them to challenge the defender?"
At that time, only the Dutch challenge seemed in question – but if the case in point is late payment fees, perhaps spread over a period longer than foreseen in the protocol, that could take the wind from the sails of Malta and Stars & Stripes. Both syndicates were rumoured to have a job to do to raise all the money needed for the challenge when they entered ahead of the late entry deadline.
While the teams are saying nothing, it is clear from Italian media late last year that tension has been felt for some time, with one Italian newspaper hinting strongly that deferred payments were the issue.
While barring the challengers from the Cup seems unlikely, the panel's findings could affect the ability of a team or teams to gain more time to find the money to take the start line, and one or more could conceivably drop out. No first-time challenger has won the Cup, except Alinghi in 2003 when the New Zealand boat virtually self-destructed.
The tension simmering below the surface does not augur well, particularly if Team New Zealand and Luna Rossa are in the process of falling out.
They were firm allies in the efforts to relieve Oracle Team USA of the Cup. They collaborated in the 2013 regatta in San Francisco. In 2017 Luna Rossa pulled out of the Bermuda event in protest at.
Oracle Team USA's late design changes reducing the size of the boat and threw much of their weight behind the New Zealand challenge. Luna Rossa skipper Max Sirena spent 18 months working for Team New Zealand as a technical advisor in the Bermuda regatta.
They were named Challenger of Record for the 2021 regatta almost as soon as Team New Zealand won in Bermuda and are helping with the design of the new AC75 monohulls – including the foiling arms.
Luna Rossa is also the force behind the new challenger series and trophy, formerly the Louis Vuitton Cup, now the Prada Cup. Luna Rossa principal Patrizio Bertelli is chief executive of Prada and is married to Miuccia Prada; their company is bankrolling the Italian challenge along with Pirelli.
Another possible reason for the arbitration panel being called in is the design package Team New Zealand are offering latecomers. Ironically, Luna Rossa received a similar boost in 2013, enabling them to have a quick-start base to catch up to compete. Oracle Team USA did the same thing in 2017 for Softbank Japan, skippered by New Zealand's Dean Barker.
However, Team New Zealand may have attracted attention for charging a fee for the design packages.
In an interview run in Sailing World last month, Ineos Team UK skipper Sir Ben Ainslie said: "Six teams on the starting line (of the Prada Cup) would be good. It doesn't give us a better chance of getting through, because some of them will have government funding, and strangely that means more money into the Kiwis' war chest, and that is certainly helping the Defenders".
The arbitration panel is expected to make its decision in April. The three-man panel consists of David Tillett (Australia), Graham McKenzie (NZ) and Professor Henry Peter (Switzerland).
The six challengers so far are: Luna Rossa, Ineos UK, Stars & Stripes, American Magic, Malta Altus and the Dutch.