ALBANY, N.Y. — New York's top court ruled Thursday that an American sailing club is the rightful challenger for the America's Cup, reversing a lower court.

The unanimous decision by the Court of Appeals concluded San Francisco's Golden Gate Yacht Club, which backs BMW Oracle Racing, is the legitimate Challenger of Record. It will negotiate race terms with Societe Nautique de Geneve, the Swiss club that backs two-time defending champion Alinghi.

Golden Gate is expected to try to negotiate terms for a traditional multi-challenger race with single-hull boats or, failing that, a rare one-on-one showdown in faster 90-foot multihull boats. That would pit billionaires and one-time pals Larry Ellison of Oracle and Ernesto Bertarelli of Alinghi against each other aboard their sloops.

"It falls now to SNG and GGYC to work together to maintain this noble sailing tradition as 'a perpetual Challenge Cup for friendly competition between foreign countries,"' Judge Carmen Beauchamp Ciparick wrote. Judges Victoria Graffeo, Susan Read, Robert Smith, Eugene Pigott Jr. and Theodore Jones Jr. concurred.

The judges reversed a midlevel court that found a Spanish association, which was backed by the Swiss champion, qualified as challenger.

The top court agreed with Golden Gate that Club Nautico Espanol De Vela was ineligible because if never held annual regattas required of the challenger under the amended 1887 Deed of Gift to the New York Yacht Club, which established the race. A trial judge had sided with Golden Gate.

Ciparick wrote that the language governing the Challenger of Record was "unambiguous," regardless of whether so-called consent challengers who also race don't have to meet the same terms.

After defeating a New Zealand crew to defend the cup July 3, 2007, at Valencia, Spain, Societe Nautique immediately accepted a challenge from a new association, Spain's Club Nautico Espanol De Vela. They planned to hold the next regatta in Valencia, but it has been postponed for more than a year by the lawsuit by Golden Gate, which had issued its own challenge two days later.

Societe Nautique lawyer Barry Ostrager argued before the Court of Appeals last month that Golden Gate really wanted a match race with its $20 million multihull boat against the Swiss champion, instead of competing against 18 other clubs.

The Court of Appeals noted that the Deed of Gift contains "a default match provision" for the one-on-one race should the cup holder and challenger fail to reach agreement on terms.

Golden Gate representatives rejected the accusation, saying they envision an America's Cup race with many competitors in single-hull boats. They also accused Societe Nautique of choosing a new, sham club as challenger in order to issue rules that favor the Swiss, including the rights to hire all the officials, participate in the preliminary race and change the rules.

Ostrager told the court 19 clubs were preparing for a warmup regatta in July following a lower court's ruling.