TRANSPARENCY & UNDERSTANDING
08/05/21 Statement – The Purebred Arabian Trust (PAT) is a nonprofit formed in 2002 for the central purpose of protecting and assuring the ongoing and timely registration of purebred Arabian horses. Based on this purpose, the PAT retained ownership of the technology and database used in performing purebred registration functions when it licensed the use of that technology in 2003 to the newly-formed Arabian Horse Association (AHA) to perform the registration services through a License and Security Agreement (LSA).
Several years later, a dispute arose regarding ownership of the updated technology that AHA used to perform registration services beginning in 2011. Litigation of that dispute resulted in the Court ordering that AHA could maintain ownership and use of its HRS (Horse Registration System) to perform registration services, but that it must develop and provide a fully functioning registration system that the PAT would own and be able to use to immediately perform purebred registration services if AHA was ever unable or unwilling to reliably continue doing so (see PDFs to these rulings here and here). The purpose of both the LSA and Court Orders were to provide for continuous and reliable registration services for purebred Arabian horse owners.
After the Court Orders, AHA decided to develop the Purebred Arabian Registry System (PARS) to be owned and used by the PAT to perform registration services, if ever needed. Pursuant to the purpose and direction from the LSA and Court Orders, AHA and the PAT agreed to the Amendment 1 to the LSA in June 2020 after several months of discussion and negotiations. The Amended LSA set out the rules for how the PARS would be kept up-to-date and ready for the PAT to immediately resume registration services, if needed. The Amended LSA also set out when and how such “insourcing” of registration services to the PAT would be triggered and seamlessly performed.
As a result of two recent ransomware attacks, AHA was unable to perform purebred registration services for a nine-day period in February and a 30-day period during March and April of 2021—and remains unable to perform certain registration processes. This situation has led the PAT to believe that PARS is not able to fulfill its purpose of performing registration services when AHA is unable to do so. After further investigation, the PAT also believes that there are additional breaches of the Amended LSA. All of these items make up the “Insourcing Event” described in the PAT’s May 14, 2021 notice to AHA. AHA has responded to this notice by disputing that an insourcing event has occurred and has refused to begin the transition of registration services to the PAT.
After unsuccessfully engaging to resolve the issue from May through June (see correspondence letters below), given AHA’s continued positions on whether an insourcing event has occurred and a prompt transfer of registration services, the PAT has filed a new lawsuit in the Arapahoe County District Court in Colorado for breach of the Amended LSA. That Complaint sets forth the basis for the PAT’s allegations that AHA has breached the Amended LSA. We hope that these documents and this description provide some context for this litigation.
The PAT’s Board of Trustees is, of course, disappointed in this new reality. But we also remain committed to our mission of protecting and preserving the purebred Arabian horse... in order to continue the work of those before us, as well as for the generations who will enjoy this incomparable breed long after we are gone.
Below, you'll find a complete list of legal documents and full threads of communication to ensure full transparency and to equip those vested in the Arabian horse with a better understanding of the events that have transpired. We will continue to post updates on this page as they occur as well.