When Société Nautique de Genève (SNG) successfully defended the trophy in the 32nd America's Cup, they immediately accepted a challenge from Club Náutico Español de Vela (CNEV) a Spanish organization formed expressly for the purpose of challenging for the cup and keeping the regatta in Valencia.

CNEV had no boats, no clubhouse, only four members (vice presidents of the Spanish Sailing Federation), and had never run a regatta of any type.

[6] However, GGYC also stated that they wanted "consensual negotiations in the spirit of the Deed of Gift toward a Protocol comparable in scope, and similar in terms, to that used for the 32nd America's Cup."

As the legal proceedings progressed, SNG continued to work with the other teams on the protocol, and by December 2007 twelve challengers had met the entry deadline and were preparing to race in a multi-challenge 33rd America's Cup.

[7] But despite extensive negotiations and proposals made by both sides, GGYC and SNG were unable to agree upon a mutual consent Protocol.

The lower court had ruled in favor of GGYC because CNEV had not held an annual regatta when it filed its challenge for the Cup.

In particular, on December 31, 2008, the New York Yacht Club (NYYC), the oldest and longest holder of the America's Cup, filed a brief supporting GGYC's position.

[4] After the April 2009 ruling GGYC said it would "immediately seek to negotiate with the Defender for a conventional, multi-challenger America's Cup in monohulls."

[17] GGYC took the position that the 10-month notice period should run from the November 2007, when the court of first instance ruled that CNEV was not a valid challenger, so the races should take place in October 2008.

Indeed, said GGYC, the expression "or any other location" in the April 2 court order could not be interpreted literally, because it could not extend to a venue like the Colorado River or Walden Pond.

The Custom House Registry referred to in the Deed of Gift (now called a Certificate of Documentation-COD) had to be delivered two weeks prior to the first race.

The Court stated: "It is not only advances in technology, but the unsportsmanlike behavior of Golden Gate that has resulted in substantially reducing SNG's advantage as originally contemplated by the Deed.

[61] The jury held that the maximum amount of moveable ballast had to be on board when the boat was measured and that it had to be equally distributed laterally, but that no other restrictions would apply.

[62][63][64] On January 28, 2010, GGYC announced that it had requested that the International Jury allow it to employ a friction-reduction system that involved discharging liquids in the water.

According to SNG, the discharge of liquids by GGYC's yacht would violate reasonable environmental protection measures incorporated in the Sailing Instructions.

[65][66] On February 2, 2010, the International Jury decided that friction-reduction systems would be allowed provided that applicable environmental laws were not violated.

According to GGYC, it appeared that SNG's team intended to use sails constructed in Minden, Nevada, USA, and that this would constitute a direct infringement of the clear terms of the Deed of Gift.

[67] The following day, SNG stated publicly that GGYC's accusations were incorrect: "Alinghi 5 complies with the Deed of Gift 'constructed in country' requirement, it was built in Switzerland and so are its sails.

"[68] On December 28, 2009, SNG sent a letter to GGYC stating that "the Deed only requires the 'yacht or vessel' to be constructed in the respective country and does not expressly impose obligations in respect of any of the separate components on board the yacht or vessel" and further stated that, while they would be willing to meet to discuss any concerns, the issue appeared to be theoretical until SNG declared what yacht it would use to defend the Cup.

)[70] On December 29, 2009, responding to a letter from GGYC, SNG proposed that a meeting be held in the presence of the Chairman of the International Jury, in order to discuss various concerns, including in particular the interpretation of the "constructed in country" provision of the Deed of Gift.

On January 29, 2010, Justice Kornreich of the New York Supreme Court informed the parties via telephone conference that she would not hear the complaint regarding the constructed in country requirement before the match scheduled to begin on 8 February.

[80][81] The agreement also included the transfer of various intellectual property rights such as the americascup.com web site and some physical assets to GGYC in their new role as trustee of the America's Cup.

After three weeks of shakedown cruises, the boat was shipped to San Diego, California where it underwent development for the next fourteen months.

Initially known as BMW Oracle Racing 90 (BOR90), the yacht was renamed USA 17 upon launch in Valencia conforming with the notice of challenge.

[82] The boat was extensively modified during the time in San Diego, most notably in replacing the outer floats, adding powered hydraulics, and fitting a rigid wing sail.

Alinghi sailed faster than during the previous race and benefited from a 20-degree wind shift, which put the Swiss boat in the lead at about the midpoint of the first leg.

The consensus of most of the commentators at the time was that the wind conditions defined in the race instructions were artificially low and designed to favour Alinghi 5 which was generally thought[86] to have a better performance than USA 17 in light airs.

"I have never seen such disgraceful behavior on a committee boat, trying to influence the PRO to the point of ordering me to stop the [start] sequence", wrote Bennett.

[105] As detailed above, on 26 March 2010 BMW Oracle Racing announced that agreement had been reached between GGYC and SNG to drop all remaining litigation hence eliminating the prospect of post-race legal disputes.

After the conclusion of the second race Club Nautico di Roma represented by the sailing team Mascalzone Latino, a longtime supporter of BMW Oracle, was named the challenger of record.