America's Cup arbitrators demand legal protection

By HELEN TUNNAH

A powerful legal panel investigating whether Team New Zealand have lost crucial secrets to a rival America's Cup syndicate will keep its findings secret until it is protected from being sued.

The America's Cup Arbitration Panel, which has the authority to expel entrants and impose heavy fines, has told all syndicates it must be protected and insured against legal action.

With campaign costs now topping $100 million for some syndicates, the panel's move was described by leading sports lawyer David Howman as "very wise".

"Internationally, courts have shown more enthusiasm than disenthusiasm to get involved in disputes."

He said most sporting arbitration panels now sought an indemnity against legal action.

The panel is made up of five judges and lawyers from around the world, including two New Zealanders: retired High Court justice Sir David Tompkins and Master John Faire of the High Court.

Allegations that Seattle-based OneWorld Challenge improperly obtained vital Team New Zealand secrets will be aired at a closed meeting with two of the panel this weekend.

That meeting will decide whether a full hearing is needed to hear evidence on the claims.

OneWorld have said they did have access to some Team New Zealand technical information, but that the material was not used or was not significant, and they asked the panel to rule on whether they had broken any rules.

Team New Zealand said in evidence that the design information was significant, and questioned the eligibility of OneWorld's challenge.

The panel has put the dispute over insurance and a deed of indemnity - effectively ensuring cup syndicates or other parties cannot sue them - on the meeting agenda.

Panel registrar Martin Foster yesterday confirmed that the panel was not expected to release any more decisions on any questions before it until the matter was settled.

He said the panel was being asked to make judgments that could have significant financial repercussions, and members needed protection.

"In real life, judges are fully indemnified. They wouldn't take their responsibilities on unless they were," he said.

"Here you've got a situation where the panel is asked to adjudicate on some very major issues with substantial financial implications.

"I'm hopeful that the matter can be resolved ... The panel ... can't be allowed to just cruise along."

A proposed Deed of Indemnity has been given to all the syndicates, but none has yet agreed to sign it.

Mr Foster said all syndicates agreed that the panel must be indemnified.

"It's just a question of how."

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