The Supreme Court of the State of New York yesterday ruled against Alinghi, the Swiss defenders of the America’s Cup, upholding the legal challenge of BMW Oracle Racing (BOR) and making the American team the official challengers for the trophy.

Justice Herman Cahn’s 18-page judgment in the case of the Golden Gate Yacht Club v Société Nautique de Genève (the teams’ representative yacht clubs) was damning of Alinghi and agreed with BOR’s central contention that Club Nautico Español de Vela’s (CNEV) status as official challenger — which allowed it to negotiate the much disputed parameters of the next America’s Cup with Alinghi — is illegal.

BOR argued that the Spanish syndicate was an invalid challenger since it has never held a regatta as required in the regulations. Yesterday’s ruling means that BOR have the right to a head-to-head, best-of-three race against Alinghi, with ten months’ notice, in a type of yacht and a location of their choice. That is the scenario laid out in the Deed of Gift, the 19th-century document in which the rules of the America’s Cup are enshrined.

The simplest solution for both teams, and the seven other challengers (at least two others are also waiting in the wings), will be for Alinghi and BOR to agree to the original schedule of the 2009 America’s Cup in Valencia, but with a new protocol that hands some power back to the challengers. Six dark months after what was arguably the best America’s Cup staged, there is finally the opportunity for peace.

“We are very pleased by the decision as it enables everyone to focus on getting the cup back on track quickly,” Russell Coutts, BOR’s chief executive, said. “We will immediately endeavour to meet with the other challengers to mutually agree a fair set of rules negotiated with all the other teams.”

Last week, Alinghi said they would not appeal against any decision, but they were more equivocal yesterday. “There will now be a thorough review of the Judge’s decision and an analysis of the options offered by the Deed of Gift,” Alinghi said in a statement.

After 5½ weeks of deliberation, Justice Cahn said: “The court concludes that CNEV’s challenge is invalid, and that GGYC is Challenger of Record pursuant to the Deed.”

The case has been a power struggle between two of the richest men in the world and in the battle of the billionaire sailors and team owners, Larry Ellison, the American software magnate and Oracle owner, has emerged victorious over Ernesto Bertarelli, Alinghi’s president and former head of a biotechnology company.

Bertarelli said: “We are disappointed that a technicality made CNEV invalid and we are now looking forward to discussions with the Golden Gate Yacht Club to keep the America’s Cup functioning.”

The uncertainty that a private match between the two teams would cause will put pressure on the likes of Team Origin, the British challenge, who have already employed 90 people.

In 1988, Dennis Conner’s Stars & Stripes beat Team New Zealand in a best-of-three match after a similarly bitter court case. Then, after appeal and counter-appeal, the cup was not staged again until 1992.

Cup full of trouble

July 3, 2007 Alinghi beat Team New Zealand 5-2 in the 32nd America’s Cup in Valencia. Seconds after the race, Ernesto Bertarelli, head of Alinghi, signs the document with Club Nautico Español de Vela (CNEV).

July 5 Alinghi introduce a new rule giving them unprecedented control over the event.

July 11 GGYC challenges for the cup, saying that CNEV is not an “organised yacht club”.

July 16 Six syndicates from the previous event write to CNEV insisting that they stand down.

July 20 GGYC initiates a legal challenge in the New York State Supreme Court, where the cup’s Deed of Gift is registered.

Oct 22 The case comes before Justice Herman Cahn.

Nov 4 CNEV’s leading officials say that CNEV was not a yacht club but a “legal adjustment”, created at the behest of Valencia’s authorities and told by the cup’s organisers to do so in secret.

Nov 22 ACM postpone 2009 cup.

Nov 27 Court rules in favour of BMW Oracle.