Organizers said the 33rd edition of the sailing classic will be staged at a later date because of Golden Gate Yacht Club's dispute with two-time defending champion Alinghi's Societe Nautique de Geneve over the rules for the next race.
"The ongoing uncertainty around the conclusion of the New York court case brought by BMW Oracle Racing leaves the organizers no choice but to delay the event, as many indicators demonstrate a lack of viability to stage the event in 2009 to the same standards as the 32nd America's Cup," America's Cup Management said in a statement.
Golden Gate Yacht Club, the home of BMW Oracle Racing, contends that Desafio Espanol's status of official challenger which allowed it to negotiate the disputed format of the next America's Cup is illegal. The Americans want the right to replace the Spanish syndicate and draw up new rules for the next regatta with Alinghi.
Alinghi said that it was looking at pushing the competition back to 2010 or 2011.
"It is very disappointing to all of us at Alinghi that BMW Oracle has chosen ... to continue to hold the event to ransom by means of their court action," Alinghi design team coordinator Grant Simmer said. "We look forward to the end of this uncertainty and to being able to get started with our plans to defend the America's Cup."
Alinghi and BMW Oracle Racing were in negotiations until Friday in hopes of reaching an out-of-court settlement.
"This wasn't something that just fell out of the sky, we were ready for this," America's Cup Management chief executive Michel Hodara said. "Now we have to go back to the drawing board to come up with a new project for the next edition."
Hodara added that organizers and Alinghi made the decision alone, although all challengers had been told of the decision beforehand.
Golden Gate called the postponement "unfortunate and unnecessary."
"There have been many opportunities to resolve the new protocol without taking this step," Golden Gate spokesman Tom Ehman said.
Ehman said Golden Gate's final offer last week which was supported by three of the seven challengers should have been enough to address everyone's concerns and "enabled the event to go ahead."
Desafio signed the protocol for the 33rd America's Cup moments after Alinghi crossed the finish line one-second ahead of Emirates Team New Zealand to take the closest America's Cup regatta for 24 years, 5-2 in July.
The American syndicate had been renegotiating the protocol, which called for the first change of boat class since 1992 and changes to the race format, over the past few weeks.
"It seemed like every time something was agreed upon, they would bring a new point to the table for consideration," Hodara said.
Golden Gate doubted Club Nautica Espanol de Vela's validity as a legitimate yacht club since it was created solely as a means to challenge and help keep the competition in Valencia, arguing that the CNEV had never held a regatta as is required in the rules governing the competition.
The court could force Alinghi to sail BMW Oracle Racing in a one-off, best-of-three duel, just like in 1989 when Denis Connors' Stars and Stripes beat Team New Zealand after a court case.
On Tuesday, Alinghi accepted Italian team Mascalzone Latino and Spanish syndicate Ayre Challenge as challengers and said that two more syndicates were set to join. Desafio, Shosholoza of South Africa, Team Origin of Britain, Team New Zealand and United Internet Team Germany had already signed up.
Hodara offered no comment on if the two potential challengers would enter as a result of the postponement.