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The America's Cup will be held in February 2010, most likely in Valencia, Spain, a New York State Supreme Court judge ruled, handing a victory to the California-based Golden Gate Yacht Club, sponsors of BMW-Oracle.

Software executive Larry Ellison's BMW-Oracle team and the defending champions Alinghi, backed by biotechnology billionaire Ernesto Bertarelli, have been locked in a legal dispute for two years over the 33rd running of the race.

BMW-Oracle, sponsored by the Golden Gate Yacht Club, and and Swiss team Alinghi, which sails under the colours of Societe Nautique de Geneve, were ordered to select a third-party mediator within one week and to return to planning talks for yachting's most prestigious race.

Justice Shirley Werner Kornreich ordered the two rival teams to resume negotiations with a mediator and ruled the race will be held in Valencia, Spain, or at another venue named by SNG. As defending champion, SNG has the right to pick a venue.

Kornreich also ruled that GGYC must certify its racing boat and present its certificate to SNG. If GGYC's boat does not meet America's Cup guidelines, the team would face disqualification, she said.

Tom Ehman, a spokesman for GGYC, said he was "delighted" with the ruling.

"The best news is that the America's Cup will be back on the water, what we've always wanted in February 2010," he said outside the courthouse.

He said the race would involve just two teams instead of several challengers as in recent years.

In a statement, SNG said it "welcomes the clarity" brought by the ruling, and said the date of the race "can be agreed through mediation."

SNG also said Kornreich's instruction that GGYC produce a Custom-House Registry, or a certification about the boat it plans to race, was an "important decision."

In court, Barry Ostrager, a lawyer for SNG, said it will be "definitely possible" but "difficult" to hold the race in February, and he later said the race would "not be in Valencia."

"It's dangerous for the sailors to have a northern hemisphere race in February," he told Kornreich, arguing that the race should instead be held in May for its milder weather.

The next America's Cup race was originally scheduled for this year.

Alinghi had accepted a challenge for the title from Club Nautico Espanol de Vela (CNEV), a Spanish team that had formed as a club just days before submitting its challenge.

But California-based BMW-Oracle contested CNEV's challenge in a lawsuit filed in 2007.

Earlier this year, New York State's highest court, the Court of Appeals, found Alinghi was wrong to accept the challenge from CNEV.

The court ruling declared BMW-Oracle, financed by Ellison, the chief executive of software giant Oracle Corp, as the official challenger.

Under America's Cup rules, the challenger proposes to race the defending champion and together they plan the terms of the next race.

Reuters