Abstract:
The America’s Cup international sailing competition was established in 1857, after the five
owners of the yacht America donated to the New York Yacht Club (NYYC) a cup, won by
their yacht in England six years before. Their Deed of Gift established a charitable trust “for
friendly competition between foreign countries”. Some years later, after several international
matches, the last surviving Donor twice revised the Deed of Gift, the last time in 1887,
which apart from three court-ordered amendments, continues to govern the competition today.
This is the standard narrative of the founding of the America’s Cup competition and is
what has been submitted to and accepted by the New York courts in America’s Cup litigation.
Unfortunately, when examined, key elements of this narrative turn out to be untrue.
The five Donors did not sign the Deed of Gift given to the NYYC. They did not intend to
(and nor did they) establish a charitable trust. It was impossible under the law to create a valid
charitable trust in the manner of the Deeds in New York State for most of the 19th century.
Neither the last surviving Donor nor the NYYC had any right or authority to alter, much
less rewrite, the terms of the Deed. Many persons, including some who had held office in the
NYYC, charged the last rewrite of the Deed as being illegal and this has never been investigated.
There are many unresolved issues of interpretation, not the least being the latitude
permitted by the mutual consent clause of the Deed for competitors to alter the terms of the
Deed for their match.
The America’s Cup competition has drifted down an unintended legal course. As with other
international sports, the competition for the Cup would be better served if competitor disputes
were determined within the existing dispute resolution structures of the sport, rather
than in a courtroom in the country of one competitor, where essential sporting issues of fairness
and sportsmanship have been barred from being given consideration.
This study is the first published full legal review of the America’s Cup Deed of Gift.