By Noel Randewich
SAN FRANCISCO (Reuters) - An America's Cup jury on Thursday threw out changes to boat design rules that two challengers said would have given software mogul Larry Ellison's team an unfair advantage in the problem-plagued international regatta.
The decision cleared some of the storm clouds over the competition with races set to begin on Saturday after three embarrassing days with just one boat sailing the course.
Luna Rossa Challenge, from Italy, and Emirates Team New Zealand objected to requirements put in place after a May accident that killed Sweden's Artemis Racing crew member Andrew Simpson, an Olympic sailing champion from Britain, and wrecked the team's AC72 boat during a practice sail on San Francisco Bay.
"Emirates Team New Zealand is pleased the jury has maintained the sanctity of the AC72 Class Rule in ruling that it can be changed only by unanimous consent of the competitors and the Regatta director," Team New Zealand said in a statement.
Regatta Director Iain Murray played down the impact of the ruling against his authority to impose the changes.
"The America's Cup has a history of these sorts of chapters and generally they've been resolved, and I have every confidence we'll resolve this one too," Murray said.
As Luna Rossa sailed its first "race" on Thursday without scheduled competitor, Artemis, which is still preparing a new boat, America's Cup Authority CEO Stephen Barclay was also optimistic.
"The good news about today is Luna Rossa is out there, as New Zealand have been the past couple of times, sailing around in full compliance with the safety recommendations and the class rule. That is what allows us to continue racing," Barclay told Reuters.
Coast Guard Chief Petty Officer Michael Lutz said the Coast Guard was waiting for the America's Cup Event Authority to submit a new safety plan.
"It's ultimately America's Cup's responsibility to ensure they hold a safe event in the bay," Lutz said.
Last week, Murray warned that if the jury ruled against his measures, meant to make the AC72s more manageable, he would have to tell the Coast Guard that the races are no longer safe - an action that could potentially scuttle the event altogether.
Team New Zealand said in its statement that it proposed a special dispensation to allow Artemis to compete in the Cup under the rules just struck down.
Artemis, which hopes to join the competition later in the summer with its newly launched yacht, has said that it would be forced out of the competition if the rule changes were rolled back.
Oracle Team USA will work around the ruling and, like New Zealand, supports making an exception for Artemis, said Oracle helmsman Ben Ainslie.
"We would support anything that enables Artemis to race," Ainslie told reporters. "The event needs Artemis to be racing and they should be racing."
Luna Rossa has yet to decide whether it supports making an exception for Artemis, said Luna Rossa skipper Max Sirena, his silver-colored team uniform still wet from racing in the Bay.
"You should build the boat for the rule you're under. We built our boat under the original class rule and I don't understand why there are people who don't respect that."
Artemis said in a statement it was disappointed with Thursday's ruling, which it said creates uncertainty. It also said it was eager to race.
Bickering over the rules is an America's Cup tradition. But this year's feud has been a serious blow to a regatta that is just getting started and has already fallen far short of expectations.
Luna Rossa, backed by Prada fashion mogul Patrizio Bertelli, boycotted the first race on Sunday, leaving New Zealand's crew to speed its AC72 catamaran around the course alone as hundreds of VIP guests invited by its corporate sponsors watched from chase boats.
"There's always been some kind of brouhaha, but I've never seen one quite this deep," said Kimball Livingston, a competitive sailor and writer at blueplanettimes.com.
New Zealand sailed the course by itself again on Tuesday, with its scheduled competitor Artemis still working on its boat.
New Zealand and Luna Rossa had argued that Murray's rules affecting yacht rudders unfairly benefit Ellison's Oracle team, which will not race until the finals in September.
Ellison, who won the America's Cup in 2010 and with it the right to set the rules for this year's race, hoped to make the 162-year-old competition more accessible to everyday sports fans and push the boundaries of high-tech boat design.
The result was a competition featuring 72-foot lightweight twin-hulled boats made of carbon fiber, with hard "wing" mainsails. Called AC72s, the huge catamarans can lift up out of the water on hydrofoils.
The rules in question would have allowed teams to alter a wing-like device known as a rudder elevator attached to the bottom of the blade-like rudders protruding down from the back of each hull.
Increasing the area and altering the shape of the rudder elevators can provide more stability while the catamarans are hydrofoiling, making the boats safer.
Since the Artemis accident followed an earlier non-deadly capsize by Oracle, criticism has grown that AC72s are dangerous and hard to maneuver in San Francisco Bay's heavy winds and rip currents.
New Zealand says it long-ago made other sacrifices in its boat design to make its catamarans stable. It and Luna Rossa said the rules amounted to a last-minute opportunity for Oracle and Artemis to implement improvements to their yachts that they should have made earlier.
( This refile clarifies in first paragraph that changes were to design rules)
(Reporting by Noel Randewich and Ronnie Cohen; Editing by Alden Bentley, Dan Grebler, Andrew Hay and Andre Grenon)