Current America's Cup holder, Switzerland's Alinghi team, have lost a 20-month battle against BMW Oracle over who should be Challenger of Record in the next competition.
New York's top court ruled on Thursday that an American sailing club was the rightful challenger for the trophy, reversing a lower court decision.
The unanimous decision by the Court of Appeals gives San Francisco's Golden Gate Yacht Club, which backs BMW Oracle Racing, the right to negotiate race terms to the next America's Cup series.
But Alinghi, backed by the Société Nautique de Genève, as defending champion has the right to decide where the next competition will be held.
Valencia is the obvious choice for Alinghi, who successfully defended their title there two years ago.
swissinfo with agencies
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