Thank you for your questions Jorge. Let me try to quickly respond in the interest of resolving the apparent confusion. In the Frequently Asked Questions provided by the Board regarding community enforceability, see the answer to Q3. The point is that outside of a member context there are limits on what powers can be given to the community in a manner that would be enforceable. That is why we wrote: As a legal matter, there is a level of uncertainty arising to doubt that Bylaw provisions providing these rights (Budget veto etc) to the community as represented by the SOs and ACs would be legally cognizable, let alone enforceable, outside of a member context. We provided Jones Day and ICANN Legal the long chart yesterday morning for comments. And we greatly appreciate that they provided comments in a short period of time, which we reviewed and incorporated based on our judgment. Jones Day and ICANN Legal were not provided the opportunity to review the memo due to our time constraints but we of course welcome and would value their comments. Kind regards, Holly HOLLY GREGORY Partner Sidley Austin LLP +1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: accountability-cross-community-bounces@icann.org [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Jorge.Cancio@bakom.admin.ch Sent: Wednesday, September 23, 2015 4:39 AM To: jordan@internetnz.net.nz; accountability-cross-community@icann.org Subject: Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Thanks Jordan, for forwarding these valuable inputs. I’m going through the Memos and I just stumbled on an issue where I’m not sure whether the Memo reflects or not the Board proposal. On page 4 of the “Memorandum” it is said that the community power on budget, strategic and operating plan is “not subject to binding arbitration under the Board proposal” – but on page 61 of the Board Matrix it is affirmed that “In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, the MEM will provide binding arbitration over that issue. In addition, the community will have the ability to remove individual Board Directors or recall the Board.” Am I missing something? And, this leads me to a more general question: at the beginning of the Memo it is stated that Jones Day was consulted in order to avoid misunderstandings – did they reply and confirm that there were none? Thanks and regards Jorge Von: accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] Im Auftrag von Jordan Carter Gesendet: Mittwoch, 23. September 2015 06:20 An: Accountability Cross Community <accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org>> Betreff: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Hi all - forwarded to get this to you ASAP, not sure who was meant to. J ---------- Forwarded message ---------- From: Gregory, Holly <holly.gregory@sidley.com<mailto:holly.gregory@sidley.com>> Date: 23 September 2015 at 14:04 Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal To: "thomas@rickert.net<mailto:thomas@rickert.net>" <thomas@rickert.net<mailto:thomas@rickert.net>>, "mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr>" <mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr>>, León Felipe Sánchez Ambía <leonfelipe@sanchez.mx<mailto:leonfelipe@sanchez.mx>>, "ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org>" <ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org>>, Alice Jansen <alice.jansen@icann.org<mailto:alice.jansen@icann.org>>, Grace Abuhamad <grace.abuhamad@icann.org<mailto:grace.abuhamad@icann.org>> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com<mailto:sidleyicannccwg@sidley.com>>, ICANN-Adler <ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com>> Dear Co-Chairs, Members and Participants of CCWG, Attached please find three documents to assist in preparation for our meeting in L.A.: • A memo from Sidley and Adler with our high level observations regarding comparison between the Board Proposal and the CCWG Proposal. • A Summary Comparison of Key Characteristics of CMSM Model and Board Proposal – this or something along these lines will be expanded out in the next several days to include the Sole Designator model as requested on today’s call • Comparison of CCWG 2nd Draft Proposal (Community Mechanism as Sole Member) and ICANN Board Proposal (Comparison) We look forward to seeing you in L.A., Holly and Rosemary HOLLY J. GREGORY Partner and Co-Chair Global Corporate Governance & Executive Compensation Practice Sidley Austin LLP +1 212 839 5853<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Ccwg-accountability5 mailing list Ccwg-accountability5@icann.org<mailto:Ccwg-accountability5@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-accountability5<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_listinfo_ccwg-2Daccountability5&d=BQMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=lWkPxTSoa5ayA0nk7iZO5qPxgajnB8c1XdKQl0aDvFk&s=gwcHAJ8RHuPV3uacnzBx2jv9ceztzdQrVW6rarXmx_E&e=> -- Jordan Carter Chief Executive InternetNZ +64-4-495-2118 (office) | +64-21-442-649 (mob) Email: jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> Skype: jordancarter Web: www.internetnz.nz<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.internetnz.nz&d=BQMG...> A better world through a better Internet

Thank you for that feedback, Jorge. We will consider whether to issue a revised draft clarifying the point. HOLLY GREGORY Partner Sidley Austin LLP +1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: Jorge.Cancio@bakom.admin.ch [mailto:Jorge.Cancio@bakom.admin.ch] Sent: Wednesday, September 23, 2015 8:56 AM To: Gregory, Holly; jordan@internetnz.net.nz; accountability-cross-community@icann.org Subject: AW: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Thanks for the prompt reply – however I feel that your Memo is a bit too “absolute” in its wording as regards to the exclusion of this specific power from the MEM (p.4: “As noted below, the MEM process would not be available to challenge a failure by the Board to follow this procedure.”), while the Board Matrix is apparently clear in stating that Board actions not complying would fall into the MEM (p. 61 Matrix: “In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, the MEM will provide binding arbitration over that issue. In addition, the community will have the ability to remove individual Board Directors or recall the Board.”)… Jorge Von: Gregory, Holly [mailto:holly.gregory@sidley.com] Gesendet: Mittwoch, 23. September 2015 14:29 An: Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch>>; jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Betreff: RE: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Thank you for your questions Jorge. Let me try to quickly respond in the interest of resolving the apparent confusion. In the Frequently Asked Questions provided by the Board regarding community enforceability, see the answer to Q3. The point is that outside of a member context there are limits on what powers can be given to the community in a manner that would be enforceable. That is why we wrote: As a legal matter, there is a level of uncertainty arising to doubt that Bylaw provisions providing these rights (Budget veto etc) to the community as represented by the SOs and ACs would be legally cognizable, let alone enforceable, outside of a member context. We provided Jones Day and ICANN Legal the long chart yesterday morning for comments. And we greatly appreciate that they provided comments in a short period of time, which we reviewed and incorporated based on our judgment. Jones Day and ICANN Legal were not provided the opportunity to review the memo due to our time constraints but we of course welcome and would value their comments. Kind regards, Holly HOLLY GREGORY Partner Sidley Austin LLP +1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> From: accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] On Behalf Of Jorge.Cancio@bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch> Sent: Wednesday, September 23, 2015 4:39 AM To: jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Subject: Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Thanks Jordan, for forwarding these valuable inputs. I’m going through the Memos and I just stumbled on an issue where I’m not sure whether the Memo reflects or not the Board proposal. On page 4 of the “Memorandum” it is said that the community power on budget, strategic and operating plan is “not subject to binding arbitration under the Board proposal” – but on page 61 of the Board Matrix it is affirmed that “In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, the MEM will provide binding arbitration over that issue. In addition, the community will have the ability to remove individual Board Directors or recall the Board.” Am I missing something? And, this leads me to a more general question: at the beginning of the Memo it is stated that Jones Day was consulted in order to avoid misunderstandings – did they reply and confirm that there were none? Thanks and regards Jorge Von: accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] Im Auftrag von Jordan Carter Gesendet: Mittwoch, 23. September 2015 06:20 An: Accountability Cross Community <accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org>> Betreff: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal Hi all - forwarded to get this to you ASAP, not sure who was meant to. J ---------- Forwarded message ---------- From: Gregory, Holly <holly.gregory@sidley.com<mailto:holly.gregory@sidley.com>> Date: 23 September 2015 at 14:04 Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal To: "thomas@rickert.net<mailto:thomas@rickert.net>" <thomas@rickert.net<mailto:thomas@rickert.net>>, "mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr>" <mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr>>, León Felipe Sánchez Ambía <leonfelipe@sanchez.mx<mailto:leonfelipe@sanchez.mx>>, "ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org>" <ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org>>, Alice Jansen <alice.jansen@icann.org<mailto:alice.jansen@icann.org>>, Grace Abuhamad <grace.abuhamad@icann.org<mailto:grace.abuhamad@icann.org>> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com<mailto:sidleyicannccwg@sidley.com>>, ICANN-Adler <ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com>> Dear Co-Chairs, Members and Participants of CCWG, Attached please find three documents to assist in preparation for our meeting in L.A.: • A memo from Sidley and Adler with our high level observations regarding comparison between the Board Proposal and the CCWG Proposal. • A Summary Comparison of Key Characteristics of CMSM Model and Board Proposal – this or something along these lines will be expanded out in the next several days to include the Sole Designator model as requested on today’s call • Comparison of CCWG 2nd Draft Proposal (Community Mechanism as Sole Member) and ICANN Board Proposal (Comparison) We look forward to seeing you in L.A., Holly and Rosemary HOLLY J. GREGORY Partner and Co-Chair Global Corporate Governance & Executive Compensation Practice Sidley Austin LLP +1 212 839 5853<tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Ccwg-accountability5 mailing list Ccwg-accountability5@icann.org<mailto:Ccwg-accountability5@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-accountability5<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_listinfo_ccwg-2Daccountability5&d=BQMGaQ&c=Od00qP2XTg0tXf_H69-T2w&r=1-1w8mU_eFprE2Nn9QnYf01XIV88MOwkXwHYEbF2Y_8&m=lWkPxTSoa5ayA0nk7iZO5qPxgajnB8c1XdKQl0aDvFk&s=gwcHAJ8RHuPV3uacnzBx2jv9ceztzdQrVW6rarXmx_E&e=> -- Jordan Carter Chief Executive InternetNZ +64-4-495-2118 (office) | +64-21-442-649 (mob) Email: jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> Skype: jordancarter Web: www.internetnz.nz<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.internetnz.nz&d=BQMG...> A better world through a better Internet

Dear All, Pls find attached my preliminary review of ICANN comments on CCWG 2nd prposals Regards Kavouss 2015-09-24 4:04 GMT+02:00 Kavouss Arasteh <kavouss.arasteh@gmail.com>:

Dear All, Pls find attached my review of Legal Memo with some highliughts as well as some cut and paste from ICANN Matrix Regards Kavouss d

2015-09-23 15:00 GMT+02:00 Gregory, Holly <holly.gregory@sidley.com>:

...

Thank you for that feedback, Jorge. We will consider whether to issue a revised draft clarifying the point.

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP* +1 212 839 5853 holly.gregory@sidley.com

*From:* Jorge.Cancio@bakom.admin.ch [mailto:Jorge.Cancio@bakom.admin.ch] *Sent:* Wednesday, September 23, 2015 8:56 AM *To:* Gregory, Holly; jordan@internetnz.net.nz; accountability-cross-community@icann.org *Subject:* AW: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks for the prompt reply – however I feel that your Memo is a bit too “absolute” in its wording as regards to the exclusion of this specific power from the MEM (p.4: “As noted below, the MEM process would not be available to challenge a failure by the Board to follow this procedure.”), while the Board Matrix is apparently clear in stating that Board actions not complying would fall into the MEM (p. 61 Matrix: “*In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, **the MEM will provide binding arbitration over that issue**. In addition, the community will have the ability to remove individual Board Directors or recall the Board*.”)…

Jorge

*Von:* Gregory, Holly [mailto:holly.gregory@sidley.com <holly.gregory@sidley.com>] *Gesendet:* Mittwoch, 23. September 2015 14:29 *An:* Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch>; jordan@internetnz.net.nz; accountability-cross-community@icann.org *Betreff:* RE: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thank you for your questions Jorge. Let me try to quickly respond in the interest of resolving the apparent confusion.

In the Frequently Asked Questions provided by the Board regarding community enforceability, see the answer to Q3.

The point is that outside of a member context there are limits on what powers can be given to the community in a manner that would be enforceable. That is why we wrote:

As a legal matter, there is a level of uncertainty arising to doubt that Bylaw provisions providing these rights (Budget veto etc) to the community as represented by the SOs and ACs would be legally cognizable, let alone enforceable, outside of a member context.

We provided Jones Day and ICANN Legal the long chart yesterday morning for comments. And we greatly appreciate that they provided comments in a short period of time, which we reviewed and incorporated based on our judgment. Jones Day and ICANN Legal were not provided the opportunity to review the memo due to our time constraints but we of course welcome and would value their comments.

Kind regards, Holly

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP* +1 212 839 5853 holly.gregory@sidley.com

*From:* accountability-cross-community-bounces@icann.org [ mailto:accountability-cross-community-bounces@icann.org <accountability-cross-community-bounces@icann.org>] *On Behalf Of * Jorge.Cancio@bakom.admin.ch *Sent:* Wednesday, September 23, 2015 4:39 AM *To:* jordan@internetnz.net.nz; accountability-cross-community@icann.org *Subject:* Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks Jordan, for forwarding these valuable inputs.

I’m going through the Memos and I just stumbled on an issue where I’m not sure whether the Memo reflects or not the Board proposal. On page 4 of the “Memorandum” it is said that the community power on budget, strategic and operating plan is “not subject to binding arbitration under the Board proposal” – but on page 61 of the Board Matrix it is affirmed that “*In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, **the MEM will provide binding arbitration over that issue**. In addition, the community will have the ability to remove individual Board Directors or recall the Board* .”

Am I missing something?

And, this leads me to a more general question: at the beginning of the Memo it is stated that Jones Day was consulted in order to avoid misunderstandings – did they reply and confirm that there were none?

Thanks and regards

Jorge

*Von:* accountability-cross-community-bounces@icann.org [ mailto:accountability-cross-community-bounces@icann.org <accountability-cross-community-bounces@icann.org>] *Im Auftrag von *Jordan Carter *Gesendet:* Mittwoch, 23. September 2015 06:20 *An:* Accountability Cross Community < accountability-cross-community@icann.org> *Betreff:* [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Hi all - forwarded to get this to you ASAP, not sure who was meant to.

J

---------- Forwarded message ---------- From: *Gregory, Holly* <holly.gregory@sidley.com> Date: 23 September 2015 at 14:04 Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal To: "thomas@rickert.net" <thomas@rickert.net>, "mathieu.weill@afnic.fr" < mathieu.weill@afnic.fr>, León Felipe Sánchez Ambía <leonfelipe@sanchez.mx>, "ccwg-accountability5@icann.org" <ccwg-accountability5@icann.org>, Alice Jansen <alice.jansen@icann.org>, Grace Abuhamad <grace.abuhamad@icann.org

...

Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com>, ICANN-Adler < ICANN@adlercolvin.com>

Dear Co-Chairs, Members and Participants of CCWG,

Attached please find three documents to assist in preparation for our meeting in L.A.:

· A memo from Sidley and Adler with our high level observations regarding comparison between the Board Proposal and the CCWG Proposal.

· A Summary Comparison of Key Characteristics of CMSM Model and Board Proposal – this or something along these lines will be expanded out in the next several days to include the Sole Designator model as requested on today’s call

· Comparison of CCWG 2nd Draft Proposal (Community Mechanism as Sole Member) and ICANN Board Proposal (Comparison)

We look forward to seeing you in L.A.,

Holly and Rosemary

*HOLLY* *J. GREGORY* Partner and Co-Chair Global Corporate Governance & Executive Compensation Practice

*Sidley Austin LLP* +1 212 839 5853 holly.gregory@sidley.com

**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.

****************************************************************************************************

_______________________________________________ Ccwg-accountability5 mailing list Ccwg-accountability5@icann.org https://mm.icann.org/mailman/listinfo/ccwg-accountability5 <https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_li...>

--

Jordan Carter

Chief Executive *InternetNZ*

+64-4-495-2118 (office) | +64-21-442-649 (mob) Email: jordan@internetnz.net.nz Skype: jordancarter

Web: www.internetnz.nz <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.internetnz.nz&d=BQMG...>

*A better world through a better Internet *

_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community

You raise a good point Malcolm. Sorry we won't see you in LA. Sent with Good (www.good.com) ________________________________ From: Malcolm Hutty Sent: Thursday, September 24, 2015 03:31:26 AM To: Gregory, Holly; 'Jorge.Cancio@bakom.admin.ch'; jordan@internetnz.net.nz; accountability-cross-community@icann.org Cc: Sidley ICANN CCWG; ICANN@adlercolvin.com Subject: Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal First, a big "thank you" to our counsel for another valuable piece of work. There is just one thing I would like to add. In all our discussions of the enforceability question, there is a continuing focus on the enforcement of the *outcome* of arbitration procedures. I believe we also need to pay attention to the enforcement of the *availability* of those procedures. In our proposed reforms, the main accountability tool is the arbitration of disputes through the IRP. What would happen if ICANN refused to submit to binding arbitration through the IRP in a particular case? -> Under the CCWG proposal, the Sole Member could enforce the availability of the IRP, by bringing a derivative action to obtain a court order to instruct ICANN to enter the IRP. -> Under the Board proposal, the Sole Member would not be available. It appears that in these circumstances the SOACs could initiate the MEM. This just iterates the same question to another level. The Board proposal raises a new form of arbitration, the MEM. This begs the question, *what would recourse would be available if ICANN refuses to enter into binding arbitration with an MEM issue group?* There are various pretexts it might offer for such a refusal. For example, it could deny that an MEM Issue Group had been validly formed. Or it could assert that the dispute fell outside the narrow parameters of matters that may be considered by the MEM. For example, consider the following scenario: Step 1: Someone tries to initiate an IRP Step 2: ICANN refuses to enter an IRP. ICANN asserts that the Board has acted as required by its fiduciary duty, so an IRP is moot. Step 3: An MEM Issue Group is formed to challenge ICANN's refusal to enter into the IRP as promised by a Fundamental Bylaw. Step 4: The MEM Issue Group considers that ICANN's refusal is inconsistent with the IRP Fundamental Bylaw. It decides to invoke the MEM Standing Panel to arbitrate. Step 5: ICANN refuses to submit to binding arbitration before the MEM Standing Panel. It asserts that the MEM Issue Group's position boils down to disagreeing with how the Board saw its fiduciary duty, which it says lies outside the scope of the MEM. Accordingly, ICANN refuses to appear before the MEM Standing Panel. What recourse would be available in such circumstances, and to whom would it be available? If there be no recourse in such a situation, as it appears to me, then this would be a significant accountability gap. I would ask that our lawyers address in any future review the question of the enforcement of the *availability* of arbitration as well as the enforcement of the *outcome* of arbitration. I am sorry that I will not be able to come to Los Angeles on this occasion due to pre-existing commitments, but I wish all participants well. Kind Regards, Malcolm. On 23/09/2015 14:00, Gregory, Holly wrote:

Thank you for that feedback, Jorge. We will consider whether to issue a revised draft clarifying the point.

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP** *+1 212 839 5853 holly.gregory@sidley.com <mailto:holly.gregory@sidley.com>

*From:*Jorge.Cancio@bakom.admin.ch [mailto:Jorge.Cancio@bakom.admin.ch] *Sent:* Wednesday, September 23, 2015 8:56 AM *To:* Gregory, Holly; jordan@internetnz.net.nz; accountability-cross-community@icann.org *Subject:* AW: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks for the prompt reply – however I feel that your Memo is a bit too “absolute” in its wording as regards to the exclusion of this specific power from the MEM (p.4: “As noted below, the MEM process would not be available to challenge a failure by the Board to follow this procedure.”), while the Board Matrix is apparently clear in stating that Board actions not complying would fall into the MEM (p. 61 Matrix: “/In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, //the MEM will provide binding arbitration over that issue//. In addition, the community will have the ability to remove individual Board Directors or recall the Board/.”)…

Jorge

*Von:*Gregory, Holly [mailto:holly.gregory@sidley.com] *Gesendet:* Mittwoch, 23. September 2015 14:29 *An:* Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch <mailto:Jorge.Cancio@bakom.admin.ch>>; jordan@internetnz.net.nz <mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org <mailto:accountability-cross-community@icann.org> *Betreff:* RE: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thank you for your questions Jorge. Let me try to quickly respond in the interest of resolving the apparent confusion.

In the Frequently Asked Questions provided by the Board regarding community enforceability, see the answer to Q3.

The point is that outside of a member context there are limits on what powers can be given to the community in a manner that would be enforceable. That is why we wrote:

As a legal matter, there is a level of uncertainty arising to doubt that Bylaw provisions providing these rights (Budget veto etc) to the community as represented by the SOs and ACs would be legally cognizable, let alone enforceable, outside of a member context.

We provided Jones Day and ICANN Legal the long chart yesterday morning for comments. And we greatly appreciate that they provided comments in a short period of time, which we reviewed and incorporated based on our judgment. Jones Day and ICANN Legal were not provided the opportunity to review the memo due to our time constraints but we of course welcome and would value their comments.

Kind regards, Holly

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP** *+1 212 839 5853 holly.gregory@sidley.com <mailto:holly.gregory@sidley.com>

*From:*accountability-cross-community-bounces@icann.org <mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] *On Behalf Of *Jorge.Cancio@bakom.admin.ch <mailto:Jorge.Cancio@bakom.admin.ch> *Sent:* Wednesday, September 23, 2015 4:39 AM *To:* jordan@internetnz.net.nz <mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org <mailto:accountability-cross-community@icann.org> *Subject:* Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks Jordan, for forwarding these valuable inputs.

I’m going through the Memos and I just stumbled on an issue where I’m not sure whether the Memo reflects or not the Board proposal. On page 4 of the “Memorandum” it is said that the community power on budget, strategic and operating plan is “not subject to binding arbitration under the Board proposal” – but on page 61 of the Board Matrix it is affirmed that “/In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, //the MEM will provide binding arbitration over that issue//. In addition, the community will have the ability to remove individual Board Directors or recall the Board/.”

Am I missing something?

And, this leads me to a more general question: at the beginning of the Memo it is stated that Jones Day was consulted in order to avoid misunderstandings – did they reply and confirm that there were none?

Thanks and regards

Jorge

*Von:*accountability-cross-community-bounces@icann.org <mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] *Im Auftrag von *Jordan Carter *Gesendet:* Mittwoch, 23. September 2015 06:20 *An:* Accountability Cross Community <accountability-cross-community@icann.org <mailto:accountability-cross-community@icann.org>> *Betreff:* [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Hi all - forwarded to get this to you ASAP, not sure who was meant to.

J

---------- Forwarded message ---------- From: *Gregory, Holly* <holly.gregory@sidley.com <mailto:holly.gregory@sidley.com>> Date: 23 September 2015 at 14:04 Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal To: "thomas@rickert.net <mailto:thomas@rickert.net>" <thomas@rickert.net <mailto:thomas@rickert.net>>, "mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr>" <mathieu.weill@afnic.fr <mailto:mathieu.weill@afnic.fr>>, León Felipe Sánchez Ambía <leonfelipe@sanchez.mx <mailto:leonfelipe@sanchez.mx>>, "ccwg-accountability5@icann.org <mailto:ccwg-accountability5@icann.org>" <ccwg-accountability5@icann.org <mailto:ccwg-accountability5@icann.org>>, Alice Jansen <alice.jansen@icann.org <mailto:alice.jansen@icann.org>>, Grace Abuhamad <grace.abuhamad@icann.org <mailto:grace.abuhamad@icann.org>> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com <mailto:sidleyicannccwg@sidley.com>>, ICANN-Adler <ICANN@adlercolvin.com <mailto:ICANN@adlercolvin.com>>

Dear Co-Chairs, Members and Participants of CCWG,

Attached please find three documents to assist in preparation for our meeting in L.A.:

· A memo from Sidley and Adler with our high level observations regarding comparison between the Board Proposal and the CCWG Proposal.

· A Summary Comparison of Key Characteristics of CMSM Model and Board Proposal – this or something along these lines will be expanded out in the next several days to include the Sole Designator model as requested on today’s call

· Comparison of CCWG 2^nd Draft Proposal (Community Mechanism as Sole Member) and ICANN Board Proposal (Comparison)

We look forward to seeing you in L.A.,

Holly and Rosemary

*HOLLY* *J. GREGORY* Partner and Co-Chair Global Corporate Governance & Executive Compensation Practice

*Sidley Austin LLP** *+1 212 839 5853 <tel:%2B1%20212%20839%205853> holly.gregory@sidley.com <mailto:holly.gregory@sidley.com>

**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.

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Jordan Carter

Chief Executive *InternetNZ*

+64-4-495-2118 (office) | +64-21-442-649 (mob) Email: jordan@internetnz.net.nz <mailto:jordan@internetnz.net.nz> Skype: jordancarter

Web: www.internetnz.nz<http://www.internetnz.nz> <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.internetnz.nz&d=BQMG...>

/A better world through a better Internet /

_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org https://mm.icann.org/mailman/listinfo/accountability-cross-community

-- Malcolm Hutty | tel: +44 20 7645 3523 Head of Public Affairs | Read the LINX Public Affairs blog London Internet Exchange | http://publicaffairs.linx.net/ London Internet Exchange Ltd 21-27 St Thomas Street, London SE1 9RY Company Registered in England No. 3137929 Trinity Court, Trinity Street, Peterborough PE1 1DA

Malcolm, in the unlikely event that ICANN refuses to participate in the MEM, the MEM arbitration would still take place and ICANN would suffer the equivalent of a default judgment against it for not participating in the MEM, and that declaration would be binding and enforceable. If the Board believes that an action should be insulated because of its fiduciary duties, it can’t avoid a negative finding on that because ICANN fails to participate and defend itself. Thanks, Sam From: <accountability-cross-community-bounces@icann.org<mailto:accountability-cross-community-bounces@icann.org>> on behalf of "Gregory, Holly" <holly.gregory@sidley.com<mailto:holly.gregory@sidley.com>> Date: Thursday, September 24, 2015 at 7:20 AM To: Malcolm Hutty <malcolm@linx.net<mailto:malcolm@linx.net>>, "'Jorge.Cancio@bakom.admin.ch<mailto:'Jorge.Cancio@bakom.admin.ch>'" <Jorge.Cancio@bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch>>, "jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>" <jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>>, "accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org>" <accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org>> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com<mailto:sidleyicannccwg@sidley.com>>, "ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com>" <ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com>> Subject: Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal You raise a good point Malcolm. Sorry we won't see you in LA. Sent with Good (www.good.com) ________________________________ From: Malcolm Hutty Sent: Thursday, September 24, 2015 03:31:26 AM To: Gregory, Holly; 'Jorge.Cancio@bakom.admin.ch<mailto:'Jorge.Cancio@bakom.admin.ch>'; jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> Cc: Sidley ICANN CCWG; ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com> Subject: Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal First, a big "thank you" to our counsel for another valuable piece of work. There is just one thing I would like to add. In all our discussions of the enforceability question, there is a continuing focus on the enforcement of the *outcome* of arbitration procedures. I believe we also need to pay attention to the enforcement of the *availability* of those procedures. In our proposed reforms, the main accountability tool is the arbitration of disputes through the IRP. What would happen if ICANN refused to submit to binding arbitration through the IRP in a particular case? -> Under the CCWG proposal, the Sole Member could enforce the availability of the IRP, by bringing a derivative action to obtain a court order to instruct ICANN to enter the IRP. -> Under the Board proposal, the Sole Member would not be available. It appears that in these circumstances the SOACs could initiate the MEM. This just iterates the same question to another level. The Board proposal raises a new form of arbitration, the MEM. This begs the question, *what would recourse would be available if ICANN refuses to enter into binding arbitration with an MEM issue group?* There are various pretexts it might offer for such a refusal. For example, it could deny that an MEM Issue Group had been validly formed. Or it could assert that the dispute fell outside the narrow parameters of matters that may be considered by the MEM. For example, consider the following scenario: Step 1: Someone tries to initiate an IRP Step 2: ICANN refuses to enter an IRP. ICANN asserts that the Board has acted as required by its fiduciary duty, so an IRP is moot. Step 3: An MEM Issue Group is formed to challenge ICANN's refusal to enter into the IRP as promised by a Fundamental Bylaw. Step 4: The MEM Issue Group considers that ICANN's refusal is inconsistent with the IRP Fundamental Bylaw. It decides to invoke the MEM Standing Panel to arbitrate. Step 5: ICANN refuses to submit to binding arbitration before the MEM Standing Panel. It asserts that the MEM Issue Group's position boils down to disagreeing with how the Board saw its fiduciary duty, which it says lies outside the scope of the MEM. Accordingly, ICANN refuses to appear before the MEM Standing Panel. What recourse would be available in such circumstances, and to whom would it be available? If there be no recourse in such a situation, as it appears to me, then this would be a significant accountability gap. I would ask that our lawyers address in any future review the question of the enforcement of the *availability* of arbitration as well as the enforcement of the *outcome* of arbitration. I am sorry that I will not be able to come to Los Angeles on this occasion due to pre-existing commitments, but I wish all participants well. Kind Regards, Malcolm. On 23/09/2015 14:00, Gregory, Holly wrote:

Thank you for that feedback, Jorge. We will consider whether to issue a revised draft clarifying the point.

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP** *+1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> <mailto:holly.gregory@sidley.com>

*From:*Jorge.Cancio@bakom.admin.ch<mailto:*Jorge.Cancio@bakom.admin.ch> [mailto:Jorge.Cancio@bakom.admin.ch] *Sent:* Wednesday, September 23, 2015 8:56 AM *To:* Gregory, Holly; jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> *Subject:* AW: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks for the prompt reply – however I feel that your Memo is a bit too “absolute” in its wording as regards to the exclusion of this specific power from the MEM (p.4: “As noted below, the MEM process would not be available to challenge a failure by the Board to follow this procedure.”), while the Board Matrix is apparently clear in stating that Board actions not complying would fall into the MEM (p. 61 Matrix: “/In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, //the MEM will provide binding arbitration over that issue//. In addition, the community will have the ability to remove individual Board Directors or recall the Board/.”)…

Jorge

*Von:*Gregory, Holly [mailto:holly.gregory@sidley.com] *Gesendet:* Mittwoch, 23. September 2015 14:29 *An:* Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch<mailto:Jorge.Cancio@bakom.admin.ch> <mailto:Jorge.Cancio@bakom.admin.ch>>; jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> <mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> <mailto:accountability-cross-community@icann.org> *Betreff:* RE: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thank you for your questions Jorge. Let me try to quickly respond in the interest of resolving the apparent confusion.

In the Frequently Asked Questions provided by the Board regarding community enforceability, see the answer to Q3.

The point is that outside of a member context there are limits on what powers can be given to the community in a manner that would be enforceable. That is why we wrote:

As a legal matter, there is a level of uncertainty arising to doubt that Bylaw provisions providing these rights (Budget veto etc) to the community as represented by the SOs and ACs would be legally cognizable, let alone enforceable, outside of a member context.

We provided Jones Day and ICANN Legal the long chart yesterday morning for comments. And we greatly appreciate that they provided comments in a short period of time, which we reviewed and incorporated based on our judgment. Jones Day and ICANN Legal were not provided the opportunity to review the memo due to our time constraints but we of course welcome and would value their comments.

Kind regards, Holly

*HOLLY* *GREGORY* Partner

*Sidley Austin LLP** *+1 212 839 5853 holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> <mailto:holly.gregory@sidley.com>

*From:*accountability-cross-community-bounces@icann.org<mailto:*accountability-cross-community-bounces@icann.org> <mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] *On Behalf Of *Jorge.Cancio@bakom.admin.ch<mailto:*Jorge.Cancio@bakom.admin.ch> <mailto:Jorge.Cancio@bakom.admin.ch> *Sent:* Wednesday, September 23, 2015 4:39 AM *To:* jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> <mailto:jordan@internetnz.net.nz>; accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> <mailto:accountability-cross-community@icann.org> *Subject:* Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Thanks Jordan, for forwarding these valuable inputs.

I’m going through the Memos and I just stumbled on an issue where I’m not sure whether the Memo reflects or not the Board proposal. On page 4 of the “Memorandum” it is said that the community power on budget, strategic and operating plan is “not subject to binding arbitration under the Board proposal” – but on page 61 of the Board Matrix it is affirmed that “/In the event the Board fails to abide by these processes, or the community believes that the Board has taken a decision in these areas that is inconsistent with the Mission and Core Values, //the MEM will provide binding arbitration over that issue//. In addition, the community will have the ability to remove individual Board Directors or recall the Board/.”

Am I missing something?

And, this leads me to a more general question: at the beginning of the Memo it is stated that Jones Day was consulted in order to avoid misunderstandings – did they reply and confirm that there were none?

Thanks and regards

Jorge

*Von:*accountability-cross-community-bounces@icann.org<mailto:*accountability-cross-community-bounces@icann.org> <mailto:accountability-cross-community-bounces@icann.org> [mailto:accountability-cross-community-bounces@icann.org] *Im Auftrag von *Jordan Carter *Gesendet:* Mittwoch, 23. September 2015 06:20 *An:* Accountability Cross Community <accountability-cross-community@icann.org<mailto:accountability-cross-community@icann.org> <mailto:accountability-cross-community@icann.org>> *Betreff:* [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal

Hi all - forwarded to get this to you ASAP, not sure who was meant to.

J

---------- Forwarded message ---------- From: *Gregory, Holly* <holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> <mailto:holly.gregory@sidley.com>> Date: 23 September 2015 at 14:04 Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal To: "thomas@rickert.net<mailto:thomas@rickert.net> <mailto:thomas@rickert.net>" <thomas@rickert.net<mailto:thomas@rickert.net> <mailto:thomas@rickert.net>>, "mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr> <mailto:mathieu.weill@afnic.fr>" <mathieu.weill@afnic.fr<mailto:mathieu.weill@afnic.fr> <mailto:mathieu.weill@afnic.fr>>, León Felipe Sánchez Ambía <leonfelipe@sanchez.mx<mailto:leonfelipe@sanchez.mx> <mailto:leonfelipe@sanchez.mx>>, "ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org> <mailto:ccwg-accountability5@icann.org>" <ccwg-accountability5@icann.org<mailto:ccwg-accountability5@icann.org> <mailto:ccwg-accountability5@icann.org>>, Alice Jansen <alice.jansen@icann.org<mailto:alice.jansen@icann.org> <mailto:alice.jansen@icann.org>>, Grace Abuhamad <grace.abuhamad@icann.org<mailto:grace.abuhamad@icann.org> <mailto:grace.abuhamad@icann.org>> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com<mailto:sidleyicannccwg@sidley.com> <mailto:sidleyicannccwg@sidley.com>>, ICANN-Adler <ICANN@adlercolvin.com<mailto:ICANN@adlercolvin.com> <mailto:ICANN@adlercolvin.com>>

Dear Co-Chairs, Members and Participants of CCWG,

Attached please find three documents to assist in preparation for our meeting in L.A.:

· A memo from Sidley and Adler with our high level observations regarding comparison between the Board Proposal and the CCWG Proposal.

· A Summary Comparison of Key Characteristics of CMSM Model and Board Proposal – this or something along these lines will be expanded out in the next several days to include the Sole Designator model as requested on today’s call

· Comparison of CCWG 2^nd Draft Proposal (Community Mechanism as Sole Member) and ICANN Board Proposal (Comparison)

We look forward to seeing you in L.A.,

Holly and Rosemary

*HOLLY* *J. GREGORY* Partner and Co-Chair Global Corporate Governance & Executive Compensation Practice

*Sidley Austin LLP** *+1 212 839 5853 <tel:%2B1%20212%20839%205853> holly.gregory@sidley.com<mailto:holly.gregory@sidley.com> <mailto:holly.gregory@sidley.com>

**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.

****************************************************************************************************

_______________________________________________ Ccwg-accountability5 mailing list Ccwg-accountability5@icann.org<mailto:Ccwg-accountability5@icann.org> <mailto:Ccwg-accountability5@icann.org> https://mm.icann.org/mailman/listinfo/ccwg-accountability5 <https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_li...>

--

Jordan Carter

Chief Executive *InternetNZ*

+64-4-495-2118 (office) | +64-21-442-649 (mob) Email: jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> <mailto:jordan@internetnz.net.nz> Skype: jordancarter

Web: www.internetnz.nz<http://www.internetnz.nz> <https://urldefense.proofpoint.com/v2/url?u=http-3A__www.internetnz.nz&d=BQMG...>

/A better world through a better Internet /

_______________________________________________ Accountability-Cross-Community mailing list Accountability-Cross-Community@icann.org<mailto:Accountability-Cross-Community@icann.org> https://mm.icann.org/mailman/listinfo/accountability-cross-community

-- Malcolm Hutty | tel: +44 20 7645 3523 Head of Public Affairs | Read the LINX Public Affairs blog London Internet Exchange | http://publicaffairs.linx.net/ London Internet Exchange Ltd 21-27 St Thomas Street, London SE1 9RY Company Registered in England No. 3137929 Trinity Court, Trinity Street, Peterborough PE1 1DA