Team Oracle “Spy” Penalities

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The America’s Cup Jury has announced the  penalties for Team Oracle’s “spy mission” against Luna Rossa.

Luna Rossa claimed Oracle violated the so-called “espionage” clause of the race protocol (more on that HERE), the Jury agreed, and told Oracle it would be penalized, fined, and made to return any photos.

According to Jury documents, Oracle returned 10 photos (no videos).The fine was set at E 11,500, and Oracle won’t be allowed to sail either of their AC72s for five days at the end of the next sailing period (Feb 1 to May 1 – in other words, Oracle can’t sail 26 April to 30 April 2013)

Both Luna Rossa and Emirates Team New Zealand asked for much stiffer penalties: Luna Ross said a “financial penalty would be meaningless”, and asked the Jury to reduce the number of sailing days from 30 to 15 between February and May, make Oracle give up two spare daggerboards and one wing.

ETNZ gave the Jury a smorgasbrod of penalties to choose from “A loss of a point or points in the Match… a reduction of Wing Spar Sections… or permitted Daggerboards… a reduction in permitted sailing days….” and an order of no more “recon” missions.

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Here’s what the jury had to say:

29th December 2012
JURY CASE AC19

JURY NOTICE JN060
DECISION on PENALTY and COSTS

APPLICATION from Luna Rossa Challenge 2013 (LR), representing Circolo della Vela
Sicilia.

1. On 19th November 2012, the Jury received an Application from LR protesting “the
Defender, Oracle Racing, GGYC” (OTUSA) for a reconnaissance incident on 8th
November in the waters off Auckland, New Zealand, claiming a breach of Protocol
Article 37.2(g).

DIRECTIONS No. 1 (JN053)

2. On 21st November 2012 the Jury issued Directions No.1 inviting the Parties to
submit a Response to the LR Application by 5th December 2012, and inviting LR to
submit a Reply to any Responses, by 12th December 2012.

DECISION

3. After considering the Responses and Reply, the Jury published its Decision on
18th December 2012 in Jury Notice JN059:

The Jury is satisfied that OTUSA breached Protocol Article 37.2(g).

DIRECTIONS No.2 (JN059)

4. Jury Notice JN059 ordered that the photographs be delivered to LR and the Jury
by 22nd December 2012, and invited Parties to make submissions on Costs and
Penalty by 24th December.

PHOTOGRAPHS

5. On 22nd December OTUSA complied with the Directions of the Jury and provided
10 photographs to LR and the Jury.

SUBMISSIONS ON PENALTY

6. LR submitted that gathering design information was critical to OTUSA as they
were unable to sail their own AC72. LR concluded that the breach by OTUSA was
quite deliberate and that their interpretation of the Protocol was absolutely artificial.

LR submitted that a financial penalty would be meaningless and an appropriate
penalty would be the reduction of 15 sailing days in the Sailing Period 1st February
to 1st May 2013, together with a reduction of two daggerboards of the maximum
allowed limit under Protocol article 29.7 and a reduction of one wing spar of the
maximum allowed limit under Protocol article 29.6.

7. Emirates Team New Zealand (ETNZ) submitted that the breach was deliberate
and based on a distorted interpretation of OTUSA’s own Protocol. The breach
gave OTUSA a significant advantage resulting from the improved quality of images
obtainable from within the 200m limit. ETNZ suggested that a penalty on the
individual rather than the team was inappropriate as the actions were clearly
sanctioned by the team. ETNZ submitted that to be just and equitable a penalty
has to be meaningful, and that the Jury should select from “A loss of a point or
points in the Match; A reduction either in the number of permitted Wing Spar
sections under Article 29.6 of the Protocol or in the number of permitted
Daggerboards under Article 29.7; A reduction in the number of the permitted
sailing days available to OTUSA between 1 February and 1 May 2013 under
Article 29.2(e) of the Protocol; An order that no OTUSA team members or agents
acting on behalf of OTUSA undertake any reconnaissance activities in Auckland or
San Francisco between the date of the order and the 30th April 2013 or such other
date specified by the Jury.”

8. OTUSA submitted that they never set out to deliberately break Protocol Article
37.2(g), and that “a penalty above and beyond the award of costs would not be
appropriate inasmuch as there was a legitimate and honest difference of opinion
as to the interpretation of the Protocol, the observations/photos obtained when
within 200m are no different than can and have been obtained from outside 200m,
at the time the AC72 observed was not testing, training or competing, and there
were no safety or harassment issues involved in the incident.”

DISCUSSION ON PENALTY

9. OTUSA has apologised to LR and indicated that as a result of the Jury Decision
any team members involved with reconnaissance finding themselves in a similar
situation to this incident will:
“(a) safely manoeuvre their vessel to more than 200m from the AC72 in
question;
(b) not photograph or record the yacht if they may be within 200m of the AC72
yacht; and
(c) apart from what basic seamanship demands, not to observe the AC72
yacht from within 200m.”

10. However, the Jury finds the interpretation that OTUSA relied on to remain within
the 200m limit and to continue to observe and photograph LR was both flawed and
unreasonable. If in doubt, OTUSA could have sought an interpretation of the
Article from the Jury.

11. The Reconnaissance Article is an important provision in the Protocol, and contains
express prohibitions with the intention of preventing the gaining of information by
Competitors about other Competitors. In this case, information in the form of a

number of photographs was obtained in breach of that Article, The benefit (if any)
of such information is not possible to determine but neither can it be undone.

12. Therefore it is appropriate that a meaningful penalty be imposed.

DECISION ON PENALTY

13. During the Second AC72 Sailing Period (1st February 2013 to 1st May 2013)
as provided for in Article 29.2(e), OTUSA may not sail their AC72 yachts on the
final five consecutive days of this Sailing Period, that is 26th April to 30th April 2013
inclusive.

DISCUSSION ON AWARD OF COSTS

14. LR and ETNZ submitted that all costs should be awarded against OTUSA; OTUSA
accepted that it alone should bear the full costs of the case.

COSTS AWARD

15. In accordance with the Jury Guidelines for the Award of Costs and Expenses
published on 13th August 2011, the Jury considers it is just and equitable that
costs of €11,500 are awarded. This amount is to be paid by OTUSA by 14th
January 2013 to: ACRM Operations Ltd Account Number: 4005 1570768517
Swift/BIC: MIDLGB22; IBAN: GB78MIDL4005157076851.

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