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Breakthrough in America's Cup legal row

AUCKLAND, New Zealand -- A new insurance scheme has been put into place to cover the America's Cup arbitration panel over fears of being sued.

It also creates a fund for possible future insurance claims to take effect after next year's America's Cup.

The scheme breaks a stalemate that has prevented the five-member panel making any rulings.

The 31st America's Cup Challenger of Record and Defender (COR/D) has put into place a "Supplementary Deed of Indemnity" to cover their concerns over personal liability.

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Now the deed will be circulated to all participating syndicates and yacht clubs for signature.

"I expect all challenging syndicates and their yacht clubs to sign off on this within the next few days," said Dyer Jones for the Challenger of Record Management (CORM), the organising authority for the Louis Vuitton Cup.

The winner of the Louis Vuitton, which starts on October 1, goes on to compete for the America's Cup against holder Team New Zealand from February 15, 2003.

"There are currently several outstanding issues before the Arbitration Panel and finalising this Deed of Indemnity will pave the way for their resolution well in advance of the first race of the Louis Vuitton Cup," added Dyer.

The problem started when the previous insurance policy was allowed to lapse.

Even though all the syndicates are required to sign an agreement to bide by the panel's rulings and not resort to the courts, panel members felt that this still might not prevent one of the billionaire backers filing for a case of negligence if they were penalised or prevented from racing.

Four of the 50 richest men in the world have each spent up to $80 million for the right to challenge for the 2003 America's Cup.

Claims and counter claims of spying, buying secrets and holding illegal design information have been flying around so the potential for litigation was seen as very high.

The most important outstanding issue concerns alleged design information held by the Seattle OneWorld syndicate led by telecommunications billionaire Craig McCaw and backed by Paul Allen, co-founder of Microsoft.

There is also a filing against Prada by Larry Ellison's Oracle Racing for resorting to the New Zealand courts on a boundary dispute, a situation specifically prohibited in the Protocol -- the race rules.

The arbitration panel has reportedly made its decisions, which could mean the loss of points or even disqualification.