FWIW, punitive damages are not usually permitted in contract disputes – I wonder why ICANN includes them at all.

Also, rather than requiring ICANN to agree to submit to the jurisdiction of every country where it has a relationship with a registry or registrar, is it worth considering regional jurisdiction?  Contracts with European registries and registrars could specify Swiss or Dutch or some other law, etc.?

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From: <ws2-jurisdiction-bounces@icann.org> on behalf of "Jorge.Cancio@bakom.admin.ch" <Jorge.Cancio@bakom.admin.ch>
Date: Wednesday, September 6, 2017 at 4:19 PM
To: "ws2-jurisdiction@icann.org" <ws2-jurisdiction@icann.org>
Subject: [EXTERNAL] [Ws2-jurisdiction] issues on applicable law

Dear all,

 

Here are, for your convenience, the two issues I have tried to briefly explain during today’s conference call, for your consideration.

 

As said, the main thought is to reduce uncertainty, and clarify that the parties to the registry agreements have an effective freedom to choose the applicable law and to apply a principle of subsidiarity that may reduce potential conflicts with the national laws where they are based.

 

==

 

1.    Issue: The law applicable to the Registry Agreement has been identified as being the main issue:

 

The Registry Agreement contains no provision relative to the choice of jurisdiction, the applicable law consequently not being defined by the Agreement.

This creates great legal uncertainty and a potential issue as regards the jurisdiction given that it would be the prerogative of the arbitrators or the judges having jurisdiction -who could come from a US Court- to determine what law governs the relationship between ICANN and the registry.

Pursuant to the current business practice, the applicable law is that of the party that provides the service in question, i.e. ICANN, a priori. A registry should therefore expect the potentially applicable law to be the law of the State of California.

The applicable law further determines the faculty of ICANN to claim punitive or exemplary damages (i.e. under US law, damages highly surpassing the damage actually suffered, in order to punish a behavior), in the event the registry were to breach the contract in a deliberate and repeated manner (section 5.2 of the Registry Agreement.) This well-established institution of Common Law is non-existent under Swiss law, which follows the principle of compensation (damages are used to repair the damage but cannot enrich the claimant,) and should be considered to be contrary to public order. Were the Swiss law to apply to the Agreement, such damages would not be granted. Following the principles of the institutions typical to the Common Law provided for in the Registry Agreement poses issues of compatibility with other legal orders and suggests that Californian law would -a priori- apply to the Registry Agreement.

 

Possible solutions:

 

The applicable law should be determined on the basis of the legitimate expectations which the parties may have in terms of applicable law. It is understandable and appropriate that the fundamental provisions or duties contained in the Registry Agreement should apply equally to all registries around the world and be therefore interpreted in a uniform way.

 

Beyond a few provisions and duties which are absolutely fundamental, it would be judicious and consistent with a legitimate expectation that the contractual relationship between ICANN and a registry be subject to the national law of the latter. The foregoing is all the more reasonable given that the manager of a generic domain (TLD) is delegated broad powers, as it is within its scope to establish the purpose of the domain, the eligibility, or the terms of the assignment of domain names, not to mention that it has great freedom as to the way in which a domain is actually managed.

 

There already exist special provisions for registries that are IGO/Governmental entities (section 7.16 registry agreement): if international law is at stake, there is a procedure (mediation and arbitration ex 5.2.) to resolve disputes between the registry and ICANN – this special provision could be extended:

-           To other registries that are not IGOs/Public authorities

-           To cover not only “international law obligations” but also national law obligations

 

 

2.    Issue: arbitration clause

 

With regard to territorial jurisdiction, the arbitration clause (section 5.2 of the Registry Agreement entitled "Arbitration text for intergovernmental organizations or governmental entities") has allowed the ".swiss" registry to submit itself to the arbitration of the International Court of Arbitration of the International Chamber of Commerce in Geneva, Switzerland. This provision also provides for some flexibilities restricted to IGOs or governmental entities as regards the competent court.

 

However these flexibilities are not open to all registry operators.

 

Possible solutions:

 

It would be wise in our opinion:

- to also allow private registries to decide on the choice of their arbitration/competent court;

- to broaden the possibilities of choice for all registries (by principle, to choose an arbitration recognized in each country.)

 

 

==

 

Hope this may be considered.

 

Regards

 

Jorge

 

 

 

 

Jorge Cancio

 

International Relations

Federal Department of the Environment,
Transport, Energy and Communications DETEC

Federal Office of Communications OFCOM

Zukunftstrasse 44, CH 2501 Biel

Tel. +41 58 460 54 58 (direct)

Tel. +41 32 327 55 11 (office)

Fax +41 58 460 54 66

mailto: jorge.cancio@bakom.admin.ch

www.bakom.admin.ch

 

 

Igf2017.swiss

info@igf2017.swiss

 

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