ISSUE - absence of choice of law clause in registry agreements
Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! *Issue* ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: *1)* *The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.* *2)* *The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.* This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: *"Historically, not having a choice of law clause seems to have worked out well in practice. * *The lack of a choice of law clause, as far as ICANN is aware, has not presented big **problems for either ICANN or contracted parties. * *The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties **to interpret the performance requirements, their rights and obligations in the ordinary course.* *Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. * *As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs **of the parties and ICANN’s global coordination function"* I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that *"The plain language of the agreement *(allows)* the parties to interpret the performance requirements, their rights and obligations in the ordinary course."* The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. *Solution* Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best,
Dear all, Due to illness I will unfortunately not be able to attend today's/tonight call where this issue I have introduced is planned to be discussed. I do believe however that I have provided everything required in terms of documentation, as well as my own opinion on the matter, in the email above. If there is one thing I would add, is that the lack of control of risks associated with an unclear choice of law might be discouraging some registries to sue ICANN; they might then prefer to cave in and it is my opinion that such a situation is detrimental to accountability in general. Of course I invite all involved with registries here to comment on that :) I am fully aware that this particular issue might not be as engaging as other issues we have been discussing. Still, it would be good to know what is the general opinion on this one. I will follow up with whatever any member of this subgroup has to say, may it be through the transcript of the call or directly here. While I will certainly try to make my point understood, please note that I have no personal feelings about it and should it emerge in the end that there is no consensus on the fact that this is an issue, then so be it! We have enough contention as it is on other fronts... Best, 2017-08-17 11:57 GMT+02:00 Raphaël BEAUREGARD-LACROIX < raphael.beauregardlacroix@sciencespo.fr>:
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
*Issue*
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
*1)* *The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.* *2)* *The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.*
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
*"Historically, not having a choice of law clause seems to have worked out well in practice. *
*The lack of a choice of law clause, as far as ICANN is aware, has not presented big **problems for either ICANN or contracted parties. *
*The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties **to interpret the performance requirements, their rights and obligations in the ordinary course.*
*Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. *
*As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs **of the parties and ICANN’s global coordination function"*
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that *"The plain language of the agreement *(allows)* the parties to interpret the performance requirements, their rights and obligations in the ordinary course."* The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
*Solution* Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
-- Raphaël Beauregard-Lacroix LinkedIn <https://www.linkedin.com/in/rapha%C3%ABl-beauregard-lacroix-88733786/> - @rbl0012 <https://twitter.com/rbl0112> - M: +33 7 86 39 18 15
Raphael, I am sorry to hear that you are not well. Thank you for helping to prepare us for this issue. We shall forge ahead in your absence. I hope you feel better soon! Greg On Wed, Sep 6, 2017 at 6:17 AM, Raphaël BEAUREGARD-LACROIX < raphael.beauregardlacroix@sciencespo.fr> wrote:
Dear all,
Due to illness I will unfortunately not be able to attend today's/tonight call where this issue I have introduced is planned to be discussed. I do believe however that I have provided everything required in terms of documentation, as well as my own opinion on the matter, in the email above.
If there is one thing I would add, is that the lack of control of risks associated with an unclear choice of law might be discouraging some registries to sue ICANN; they might then prefer to cave in and it is my opinion that such a situation is detrimental to accountability in general. Of course I invite all involved with registries here to comment on that :)
I am fully aware that this particular issue might not be as engaging as other issues we have been discussing. Still, it would be good to know what is the general opinion on this one. I will follow up with whatever any member of this subgroup has to say, may it be through the transcript of the call or directly here.
While I will certainly try to make my point understood, please note that I have no personal feelings about it and should it emerge in the end that there is no consensus on the fact that this is an issue, then so be it! We have enough contention as it is on other fronts...
Best,
2017-08-17 11:57 GMT+02:00 Raphaël BEAUREGARD-LACROIX < raphael.beauregardlacroix@sciencespo.fr>:
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
*Issue*
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
*1)* *The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.* *2)* *The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.*
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
*"Historically, not having a choice of law clause seems to have worked out well in practice. *
*The lack of a choice of law clause, as far as ICANN is aware, has not presented big **problems for either ICANN or contracted parties. *
*The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties **to interpret the performance requirements, their rights and obligations in the ordinary course.*
*Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. *
*As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs **of the parties and ICANN’s global coordination function"*
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that *"The plain language of the agreement *(allows)* the parties to interpret the performance requirements, their rights and obligations in the ordinary course."* The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
*Solution* Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
-- Raphaël Beauregard-Lacroix LinkedIn <https://www.linkedin.com/in/rapha%C3%ABl-beauregard-lacroix-88733786/> - @rbl0012 <https://twitter.com/rbl0112> - M: +33 7 86 39 18 15 <+33%207%2086%2039%2018%2015>
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Dear Greg, all: At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.” Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this. I favor the status quo option. Here is why: First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts. And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation. Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences. Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo. Best regards, David David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 From: ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! Issue ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: 1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: "Historically, not having a choice of law clause seems to have worked out well in practice. The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course. Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function" I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best,
Dear David and all, I'm not sure that there may be a valid argument that the recommendation has only been presented one and a half months ago (btw: quite a lot time) - this "lateness" if anything is only due to how the Subgroup has progressed in general. The issue itself (applicable law to contracts) is IMHO not only at the core of the mandate of this workstream, but has been mentioned time and again for over a year as an issue, including in the responses to the questionnaire put to open consultation. Hence, I feel that we should discuss on the substance, and see what possible recommendation may come out of this Subgroup - as flexible and generic as needed but also reflective of what is in our core mandate and has been subject of many discussions and exchanges during the last year. At least -as I have been proposing- this recommendation is all about increasing effective choice for registries - improving the uncertainty provided by the existing arrangements and increasing the options at their disposal. thanks for your consideration and kind regards Jorge ________________________________ Von: McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org> Datum: 3. Oktober 2017 um 13:23:39 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Betreff: [Ws2-jurisdiction] FW: ISSUE - absence of choice of law clause in registry agreements Dear Greg, all: At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.” Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this. I favor the status quo option. Here is why: First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts. And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation. Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences. Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo. Best regards, David David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 From: ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! Issue ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: 1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: "Historically, not having a choice of law clause seems to have worked out well in practice. The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course. Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function" I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best,
Greg, I am In Munich Pls confirm the time and day on which Jurisdiction holds its meeting. Is it 04 October at 13,00 UTC? Regards On Tue, Oct 3, 2017 at 1:39 PM, <Jorge.Cancio@bakom.admin.ch> wrote:
Dear David and all,
I'm not sure that there may be a valid argument that the recommendation has only been presented one and a half months ago (btw: quite a lot time) - this "lateness" if anything is only due to how the Subgroup has progressed in general.
The issue itself (applicable law to contracts) is IMHO not only at the core of the mandate of this workstream, but has been mentioned time and again for over a year as an issue, including in the responses to the questionnaire put to open consultation.
Hence, I feel that we should discuss on the substance, and see what possible recommendation may come out of this Subgroup - as flexible and generic as needed but also reflective of what is in our core mandate and has been subject of many discussions and exchanges during the last year. At least -as I have been proposing- this recommendation is all about increasing effective choice for registries - improving the uncertainty provided by the existing arrangements and increasing the options at their disposal.
thanks for your consideration and kind regards
Jorge
________________________________
Von: McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org> Datum: 3. Oktober 2017 um 13:23:39 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Betreff: [Ws2-jurisdiction] FW: ISSUE - absence of choice of law clause in registry agreements
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction- bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Correct Kavouss. B. On Tue, Oct 3, 2017 at 8:29 AM, Kavouss Arasteh <kavouss.arasteh@gmail.com> wrote:
Greg, I am In Munich Pls confirm the time and day on which Jurisdiction holds its meeting. Is it 04 October at 13,00 UTC? Regards
On Tue, Oct 3, 2017 at 1:39 PM, <Jorge.Cancio@bakom.admin.ch> wrote:
Dear David and all,
I'm not sure that there may be a valid argument that the recommendation has only been presented one and a half months ago (btw: quite a lot time) - this "lateness" if anything is only due to how the Subgroup has progressed in general.
The issue itself (applicable law to contracts) is IMHO not only at the core of the mandate of this workstream, but has been mentioned time and again for over a year as an issue, including in the responses to the questionnaire put to open consultation.
Hence, I feel that we should discuss on the substance, and see what possible recommendation may come out of this Subgroup - as flexible and generic as needed but also reflective of what is in our core mandate and has been subject of many discussions and exchanges during the last year. At least -as I have been proposing- this recommendation is all about increasing effective choice for registries - improving the uncertainty provided by the existing arrangements and increasing the options at their disposal.
thanks for your consideration and kind regards
Jorge
________________________________
Von: McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org> Datum: 3. Oktober 2017 um 13:23:39 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Betreff: [Ws2-jurisdiction] FW: ISSUE - absence of choice of law clause in registry agreements
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction-bounc es@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Dear David, all Thank you for your input. It is certainly valuable given the fact that you speak (which I assume you do here) for a registry. I would like to ask you for clarification on a few matters: -I understand (although disagree) your point on the process (that this subgroup is acting beyond its mandate,) but do you also make the point that status quo is the best option in terms of accountability, or that it is the best option because it is the option which has so far been "chosen" by registries as part of the RA negotiation/amendment process? Or that it is the best option according to another criterion? This is the passage I am not sure I understand fully *Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions* In my view, there is still a governing law, it just that it is hovering somewhere over there and crystallises during litigation. How can it not be better to have a set governing law? In the end, if it always turns out to be California law, ICANN *is* in effect "forcing" the contracted parties to accept California law, it is just that they hide it behind this no-choice, no? -Regarding your point on the process, we noted on the previous call(s) that this subgroup has no power to make contract changes at all; I think at this point this is acknowledged by a "consensus." Do you mean to say that in your opinion even a mere suggestion based on our assessment using accountability is a criterion would be outside the mandate, to the extent that such evaluation belongs to the contracted parties *only*? Thanks Best, Raphael P.S. I will not be able to attend tomorrow's call due to work commitments. 2017-10-03 13:23 GMT+02:00 McAuley, David via Ws2-jurisdiction < ws2-jurisdiction@icann.org>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards,
David
David McAuley
Sr International Policy & Business Development Manager
Verisign Inc.
703-948-4154
*From:* ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction- bounces@icann.org] *On Behalf Of *Raphaël BEAUREGARD-LACROIX *Sent:* Thursday, August 17, 2017 5:58 AM *To:* ws2-jurisdiction <ws2-jurisdiction@icann.org> *Subject:* [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here
-the case in which I raised this as an issue
-the question we formulated to ICANN legal
-the response we got from ICANN legal.
-the follow up
-the response to the follow up
I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes
-The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
*Issue*
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
*1)*
*The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate.*
*2)*
*The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.*
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
*"Historically, not having a choice of law clause seems to have worked out well in practice. *
*The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. *
*The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.*
*Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. *
*As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"*
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that *"The plain language of the agreement *(allows)* the parties to interpret the performance requirements, their rights and obligations in the ordinary course."* The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
*Solution*
Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
-- Raphaël Beauregard-Lacroix LinkedIn <https://www.linkedin.com/in/rapha%C3%ABl-beauregard-lacroix-88733786/> - @rbl0012 <https://twitter.com/rbl0112> - M: +33 7 86 39 18 15
David I am curious – would your objections dissolve if a) it were made clear that choices within the menu of options were voluntary and at the complete discretion of the contracting parties; and b) if “no choice of law at all” (i.e. the status quo) was explicitly called out as a possible option? In other words, is your objection to the idea of even suggesting possible other choice of law options or is it to suggesting that a choice of law is necessary? Cheers Paul Paul Rosenzweig <mailto:paul.rosenzweig@redbranchconsulting.com> paul.rosenzweig@redbranchconsulting.com O: +1 (202) 547-0660 M: +1 (202) 329-9650 VOIP: +1 (202) 738-1739 <http://www.redbranchconsulting.com/> www.redbranchconsulting.com My PGP Key: <https://keys.mailvelope.com/pks/lookup?op=get&search=0x9A830097CA066684> https://keys.mailvelope.com/pks/lookup?op=get&search=0x9A830097CA066684 From: ws2-jurisdiction-bounces@icann.org [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Tuesday, October 3, 2017 11:29 AM To: McAuley, David <dmcauley@verisign.com> Cc: ws2-jurisdiction@icann.org Subject: Re: [Ws2-jurisdiction] FW: ISSUE - absence of choice of law clause in registry agreements Dear David, all Thank you for your input. It is certainly valuable given the fact that you speak (which I assume you do here) for a registry. I would like to ask you for clarification on a few matters: -I understand (although disagree) your point on the process (that this subgroup is acting beyond its mandate,) but do you also make the point that status quo is the best option in terms of accountability, or that it is the best option because it is the option which has so far been "chosen" by registries as part of the RA negotiation/amendment process? Or that it is the best option according to another criterion? This is the passage I am not sure I understand fully Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions In my view, there is still a governing law, it just that it is hovering somewhere over there and crystallises during litigation. How can it not be better to have a set governing law? In the end, if it always turns out to be California law, ICANN *is* in effect "forcing" the contracted parties to accept California law, it is just that they hide it behind this no-choice, no? -Regarding your point on the process, we noted on the previous call(s) that this subgroup has no power to make contract changes at all; I think at this point this is acknowledged by a "consensus." Do you mean to say that in your opinion even a mere suggestion based on our assessment using accountability is a criterion would be outside the mandate, to the extent that such evaluation belongs to the contracted parties only? Thanks Best, Raphael P.S. I will not be able to attend tomorrow's call due to work commitments. 2017-10-03 13:23 GMT+02:00 McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org> >: Dear Greg, all: At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.” Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this. I favor the status quo option. Here is why: First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts. And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation. Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences. Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo. Best regards, David David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 From: ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org> ] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org> > Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! Issue ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: 1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: "Historically, not having a choice of law clause seems to have worked out well in practice. The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course. Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function" I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best, _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction -- Raphaël Beauregard-Lacroix <https://www.linkedin.com/in/rapha%C3%ABl-beauregard-lacroix-88733786/> LinkedIn - <https://twitter.com/rbl0112> @rbl0012 - M: +33 7 86 39 18 15
Hi all, As mentioned on the call, I am personally much in favor of a menu option. In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation. In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe. ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN. Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them. So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting. Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view. Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org>] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <https://mm.icann.org/mailman/listinfo/ws2-jurisdiction> <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <https://mm.icann.org/mailman/listinfo/ws2-jurisdiction>
I will not be able to participate in the call today - please note my apologies. I support a menu option for the reasons mentioned below in the mail from Thomas. Best, Finn Sendt fra min iPad Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net<mailto:thomas@rickert.net>>: Hi all, As mentioned on the call, I am personally much in favor of a menu option. In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation. In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe. ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN. Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them. So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting. Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view. Thomas Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>>: Dear Greg, all: At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.” Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this. I favor the status quo option. Here is why: First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts. And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation. Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences. Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo. Best regards, David David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 From: ws2-jurisdiction-bounces@icann.org<mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! Issue ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: 1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: "Historically, not having a choice of law clause seems to have worked out well in practice. The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course. Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function" I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best, _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Please note my apologies as well and my support for the Menu approach. kind regards Jorge ________________________________ Von: Finn Petersen <FinPet@erst.dk> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Cc: Thomas Rickert <thomas@rickert.net> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call I will not be able to participate in the call today - please note my apologies. I support a menu option for the reasons mentioned below in the mail from Thomas. Best, Finn Sendt fra min iPad Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net<mailto:thomas@rickert.net>>: Hi all, As mentioned on the call, I am personally much in favor of a menu option. In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation. In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe. ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN. Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them. So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting. Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view. Thomas Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>>: Dear Greg, all: At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.” Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this. I favor the status quo option. Here is why: First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts. And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation. Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences. Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo. Best regards, David David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 From: ws2-jurisdiction-bounces@icann.org<mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements Dear all, I would like to officially submit this issue to the attention of our subgroup. I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these. and for reference purposes -The standard registry agreement (RA) I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to! Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is! Issue ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2 As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them. For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21: 1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there. Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law. I would like to quote here ICANN legal's answer to our follow-up: "Historically, not having a choice of law clause seems to have worked out well in practice. The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties. The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course. Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply. As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function" I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective. Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US. We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law... The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute. As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not. As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses. Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else. I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable. Best, _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Dear Thomas, Thank you very much for your intervention which I considered being sent as a participant to the Jurisdiction Group and NOT as CCWG Co-Chair since the latter causes again considerable problems as the activities of the sub group being repeatedly interfered by you Having said that , while I do not put in question competence and qualification of any body including David, I disagree with you in saying " Since David is an expert in US Law, we should accept whatever solution he proposed " we are independent ,prerogative group which discuss, dispute, disagree and finally come to some sort of consensus( full or soft ) and thus should continue our works with minimum influence of any body expert or non expert. Regards Kavouss On Wed, Oct 4, 2017 at 9:22 AM, <Jorge.Cancio@bakom.admin.ch> wrote:
Please note my apologies as well and my support for the Menu approach.
kind regards
Jorge
________________________________
Von: Finn Petersen <FinPet@erst.dk> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Cc: Thomas Rickert <thomas@rickert.net> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call
I will not be able to participate in the call today - please note my apologies.
I support a menu option for the reasons mentioned below in the mail from Thomas.
Best,
Finn
Sendt fra min iPad
Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net>>:
Hi all, As mentioned on the call, I am personally much in favor of a menu option.
In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation.
In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe.
ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN.
Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them.
So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting.
Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view.
Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction < ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org<mailto:ws2- jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto: ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>________________ _______________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Dear Kavouss, Thank you for your note. You have misread my e-mail. 1. I have mentioned explicitly that I am expressing my personal view. Thus, it was not a co-chair statement. 2. You have „cited" a statement you claim I made (you even put it in quotation marks). I have never made such statement in support of David’s proposal. Just the opposite is the case. While David is in support of maintaining the status quo, I am in favor of the menu option. I would kindly ask you to accurately quote from others’ communication, particularly when using quotation marks. Attributing inaccurate statements just creates confusion at various levels. Thanks and kind regards, Thomas
Am 04.10.2017 um 09:30 schrieb Kavouss Arasteh <kavouss.arasteh@gmail.com>:
Dear Thomas, Thank you very much for your intervention which I considered being sent as a participant to the Jurisdiction Group and NOT as CCWG Co-Chair since the latter causes again considerable problems as the activities of the sub group being repeatedly interfered by you Having said that , while I do not put in question competence and qualification of any body including David, I disagree with you in saying " Since David is an expert in US Law, we should accept whatever solution he proposed " we are independent ,prerogative group which discuss, dispute, disagree and finally come to some sort of consensus( full or soft ) and thus should continue our works with minimum influence of any body expert or non expert. Regards Kavouss
On Wed, Oct 4, 2017 at 9:22 AM, <Jorge.Cancio@bakom.admin.ch <mailto:Jorge.Cancio@bakom.admin.ch>> wrote: Please note my apologies as well and my support for the Menu approach.
kind regards
Jorge
________________________________
Von: Finn Petersen <FinPet@erst.dk <mailto:FinPet@erst.dk>> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org> <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>> Cc: Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net>> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call
I will not be able to participate in the call today - please note my apologies.
I support a menu option for the reasons mentioned below in the mail from Thomas.
Best,
Finn
Sendt fra min iPad
Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net><mailto:thomas@rickert.net <mailto:thomas@rickert.net>>>:
Hi all, As mentioned on the call, I am personally much in favor of a menu option.
In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation.
In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe.
ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN.
Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them.
So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting.
Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view.
Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org><mailto:ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>>>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 <tel:703-948-4154>
From: ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org><mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org>> [mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org>] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org><mailto:ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org><mailto:Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org>> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <https://mm.icann.org/mailman/listinfo/ws2-jurisdiction> <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org><mailto:Ws2-jurisdiction@icann.org <mailto:Ws2-jurisdiction@icann.org>> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <https://mm.icann.org/mailman/listinfo/ws2-jurisdiction>
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Dear Thons Sorry if I misread yr message Regards Kavouss Sent from my iPhone
On 4 Oct 2017, at 09:57, Thomas Rickert <thomas@rickert.net> wrote:
Dear Kavouss, Thank you for your note.
You have misread my e-mail.
1. I have mentioned explicitly that I am expressing my personal view. Thus, it was not a co-chair statement.
2. You have „cited" a statement you claim I made (you even put it in quotation marks). I have never made such statement in support of David’s proposal. Just the opposite is the case. While David is in support of maintaining the status quo, I am in favor of the menu option.
I would kindly ask you to accurately quote from others’ communication, particularly when using quotation marks. Attributing inaccurate statements just creates confusion at various levels.
Thanks and kind regards, Thomas
Am 04.10.2017 um 09:30 schrieb Kavouss Arasteh <kavouss.arasteh@gmail.com>:
Dear Thomas, Thank you very much for your intervention which I considered being sent as a participant to the Jurisdiction Group and NOT as CCWG Co-Chair since the latter causes again considerable problems as the activities of the sub group being repeatedly interfered by you Having said that , while I do not put in question competence and qualification of any body including David, I disagree with you in saying " Since David is an expert in US Law, we should accept whatever solution he proposed " we are independent ,prerogative group which discuss, dispute, disagree and finally come to some sort of consensus( full or soft ) and thus should continue our works with minimum influence of any body expert or non expert. Regards Kavouss
On Wed, Oct 4, 2017 at 9:22 AM, <Jorge.Cancio@bakom.admin.ch> wrote: Please note my apologies as well and my support for the Menu approach.
kind regards
Jorge
________________________________
Von: Finn Petersen <FinPet@erst.dk> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Cc: Thomas Rickert <thomas@rickert.net> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call
I will not be able to participate in the call today - please note my apologies.
I support a menu option for the reasons mentioned below in the mail from Thomas.
Best,
Finn
Sendt fra min iPad
Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net<mailto:thomas@rickert.net>>:
Hi all, As mentioned on the call, I am personally much in favor of a menu option.
In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation.
In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe.
ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN.
Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them.
So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting.
Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view.
Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org<mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
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Dear Thomas, Thank you again You are right as I misplaced the inverted comma. It should be after " .... expert in US law" Moreover, I have noted that you expressed your views as an individual and not Co Chair and for you you were right as I misread the view for which I regret so doing Regards Kavouss Sent from my iPhone
On 4 Oct 2017, at 09:57, Thomas Rickert <thomas@rickert.net> wrote:
Dear Kavouss, Thank you for your note.
You have misread my e-mail.
1. I have mentioned explicitly that I am expressing my personal view. Thus, it was not a co-chair statement.
2. You have „cited" a statement you claim I made (you even put it in quotation marks). I have never made such statement in support of David’s proposal. Just the opposite is the case. While David is in support of maintaining the status quo, I am in favor of the menu option.
I would kindly ask you to accurately quote from others’ communication, particularly when using quotation marks. Attributing inaccurate statements just creates confusion at various levels.
Thanks and kind regards, Thomas
Am 04.10.2017 um 09:30 schrieb Kavouss Arasteh <kavouss.arasteh@gmail.com>:
Dear Thomas, Thank you very much for your intervention which I considered being sent as a participant to the Jurisdiction Group and NOT as CCWG Co-Chair since the latter causes again considerable problems as the activities of the sub group being repeatedly interfered by you Having said that , while I do not put in question competence and qualification of any body including David, I disagree with you in saying " Since David is an expert in US Law, we should accept whatever solution he proposed " we are independent ,prerogative group which discuss, dispute, disagree and finally come to some sort of consensus( full or soft ) and thus should continue our works with minimum influence of any body expert or non expert. Regards Kavouss
On Wed, Oct 4, 2017 at 9:22 AM, <Jorge.Cancio@bakom.admin.ch> wrote: Please note my apologies as well and my support for the Menu approach.
kind regards
Jorge
________________________________
Von: Finn Petersen <FinPet@erst.dk> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <ws2-jurisdiction@icann.org> Cc: Thomas Rickert <thomas@rickert.net> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call
I will not be able to participate in the call today - please note my apologies.
I support a menu option for the reasons mentioned below in the mail from Thomas.
Best,
Finn
Sendt fra min iPad
Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net<mailto:thomas@rickert.net>>:
Hi all, As mentioned on the call, I am personally much in favor of a menu option.
In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation.
In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe.
ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN.
Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them.
So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting.
Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view.
Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154
From: ws2-jurisdiction-bounces@icann.org<mailto:ws2-jurisdiction-bounces@icann.org> [mailto:ws2-jurisdiction-bounces@icann.org] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org<mailto:ws2-jurisdiction@icann.org>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction <RA-31jul17-en.pdf><Follow Up on ICANN Legal Answers- RESPONSE FROM ICANN.pdf><Follow Up on ICANN Legal Answers v1dot1.pdf><ICANN Responses to WS2 Jurisdiction Questions-SE.pdf><JurisdictionQuestiontoICANNLegalv2.doc (1).docx><Employ Media LLC v ICANN_v2.docx>_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org<mailto:Ws2-jurisdiction@icann.org> https://mm.icann.org/mailman/listinfo/ws2-jurisdiction _______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
_______________________________________________ Ws2-jurisdiction mailing list Ws2-jurisdiction@icann.org https://mm.icann.org/mailman/listinfo/ws2-jurisdiction
Hello Kavouss, All good. Thanks for your swift responses! Kind regards, Thomas
Am 04.10.2017 um 11:07 schrieb Arasteh <kavouss.arasteh@gmail.com>:
Dear Thomas, Thank you again You are right as I misplaced the inverted comma. It should be after " .... expert in US law" Moreover, I have noted that you expressed your views as an individual and not Co Chair and for you you were right as I misread the view for which I regret so doing Regards Kavouss
Sent from my iPhone
On 4 Oct 2017, at 09:57, Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net>> wrote:
Dear Kavouss, Thank you for your note.
You have misread my e-mail.
1. I have mentioned explicitly that I am expressing my personal view. Thus, it was not a co-chair statement.
2. You have „cited" a statement you claim I made (you even put it in quotation marks). I have never made such statement in support of David’s proposal. Just the opposite is the case. While David is in support of maintaining the status quo, I am in favor of the menu option.
I would kindly ask you to accurately quote from others’ communication, particularly when using quotation marks. Attributing inaccurate statements just creates confusion at various levels.
Thanks and kind regards, Thomas
Am 04.10.2017 um 09:30 schrieb Kavouss Arasteh <kavouss.arasteh@gmail.com <mailto:kavouss.arasteh@gmail.com>>:
Dear Thomas, Thank you very much for your intervention which I considered being sent as a participant to the Jurisdiction Group and NOT as CCWG Co-Chair since the latter causes again considerable problems as the activities of the sub group being repeatedly interfered by you Having said that , while I do not put in question competence and qualification of any body including David, I disagree with you in saying " Since David is an expert in US Law, we should accept whatever solution he proposed " we are independent ,prerogative group which discuss, dispute, disagree and finally come to some sort of consensus( full or soft ) and thus should continue our works with minimum influence of any body expert or non expert. Regards Kavouss
On Wed, Oct 4, 2017 at 9:22 AM, <Jorge.Cancio@bakom.admin.ch <mailto:Jorge.Cancio@bakom.admin.ch>> wrote: Please note my apologies as well and my support for the Menu approach.
kind regards
Jorge
________________________________
Von: Finn Petersen <FinPet@erst.dk <mailto:FinPet@erst.dk>> Datum: 4. Oktober 2017 um 09:03:07 MESZ An: ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org> <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>> Cc: Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net>> Betreff: [Ws2-jurisdiction] Agenda and Documents for upcoming call
I will not be able to participate in the call today - please note my apologies.
I support a menu option for the reasons mentioned below in the mail from Thomas.
Best,
Finn
Sendt fra min iPad
Den 3. okt. 2017 kl. 18.36 skrev Thomas Rickert <thomas@rickert.net <mailto:thomas@rickert.net><mailto:thomas@rickert.net <mailto:thomas@rickert.net>>>:
Hi all, As mentioned on the call, I am personally much in favor of a menu option.
In my view, time is not really of essence on this particular point as most of the work needs to be done when implementing the recommendation.
In addition to what I said on the calls, let me offer another argument for this from the perspective of someone located in Europe.
ICANN limits its liability quite substantially in its contracts with contracted parties. Those limitations cannot be validly passed on by the contracted parties to their respective customers as such clauses would be void. That leaves a gap where the contracted party might need to compensate a customer but cannot claim the amount from ICANN.
Also, while I understand David’s point, David is an expert in US law. Being forced by a de facto monopoly to accept a contract subject to US law surely also has a deterring effect on those who consider to apply for a TLD or seek an accreditation as a registrar. I have experienced numerous times over the years (not in the domain industry I should add) that deals were not signed as contractors were not willing to accept US law as it had too many unknowns for them.
So if ICANN wants to be truly inclusive at the global level, it needs to lower the hurdle of contracting.
Let me conclude by acknowledging the issues raised by Kavouss with respect to a menu option. I know it is not ideal, but it is a step into the right direction in my view.
Thomas
Am 03.10.2017 um 12:23 schrieb McAuley, David via Ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org><mailto:ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>>>:
Dear Greg, all:
At tomorrow’s meeting, we will again address and attempt to finalize a recommendation on the issue of “Applicable Law and Choice of Venue Provisions.”
Raphaël originally proposed this in the email below. Thanks to Raphaël for clear posts about this.
I favor the status quo option. Here is why:
First, the current contract provisions represent settled approaches, developed over time, among experienced practitioners (ICANN/registries/registrars) in a complex and well-developed DNS industry. On the other hand, our subgroup is an ad-hoc group assembled, in my opinion, to address high level jurisdiction issues. We are proposing to wander into an operational area (contract clauses) where we are simply not equipped to give direction to parties to such contracts.
And, as Sam Eisner told us, these contract provisions are negotiated with the RySG and RrSG and cannot be changed without re-negotiation.
Moreover, by not specifying a governing law, these contracts fall in the welcome ‘Goldilocks’ middle ground – neither forcing contract parties to accept California law nor forcing ICANN to accept laws that may not capable of ensuring adequate regard for the DNS. In short, the parties to the contract should make these decisions – they are the ones who have to, and will continue to, live with the real-world contractual consequences.
Second, the proposal is too late for us to properly address even if we should for some unlikely reason get involved. It was formally put on the table just over a month ago, and it cannot be seriously assessed without seeking considered input from ICANN Legal, the RySG, and the RrSG. This is not theoretical to them - their viewpoints are essential. But, preferably, we should let them continue to do what they have been doing these many years without our direction - and stick to the status quo.
Best regards, David
David McAuley Sr International Policy & Business Development Manager Verisign Inc. 703-948-4154 <tel:703-948-4154>
From: ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org><mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org>> [mailto:ws2-jurisdiction-bounces@icann.org <mailto:ws2-jurisdiction-bounces@icann.org>] On Behalf Of Raphaël BEAUREGARD-LACROIX Sent: Thursday, August 17, 2017 5:58 AM To: ws2-jurisdiction <ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org><mailto:ws2-jurisdiction@icann.org <mailto:ws2-jurisdiction@icann.org>>> Subject: [EXTERNAL] [Ws2-jurisdiction] ISSUE - absence of choice of law clause in registry agreements
Dear all,
I would like to officially submit this issue to the attention of our subgroup.
I attach here -the case in which I raised this as an issue -the question we formulated to ICANN legal -the response we got from ICANN legal. -the follow up -the response to the follow up I can also refer you all to an email from Bernie dated 26 July which contains links to these.
and for reference purposes -The standard registry agreement (RA)
I did not find ICANN legal's answer to be fully satisfying, especially regarding registries, and I would thus like this issue to be included in the final report, with a solution that we will hopefully all agree to!
Because of the nature of the dispute resolution clause in RAA's concluded with registrars, I think they should be treated as a separate issue, if at all. At any rate, this submission is already long enough as it is!
Issue
ICANN's standardised contracts with registries do not include a choice of law provisions and are subject to dispute resolution by arbitration under ICC rules. See RA, art. 5.2
As for RAA's concluded with registrars, they can be litigated in court or in arbitration under American Arbitration Association rules. For the simple reason that they can be litigated in court, this makes this issue less of an issue for them.
For RA litigation, the above clause means that in effect, the arbitrators are free to decide the applicable law according to various factors or methods generally accepted in private international law practice. See ICC Rules of Arbitration art. 21:
1) The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2) The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages.
This also means that we cannot rely on Californian private international law to predict which law is applicable. Moreover, as far as my understanding of commercial arbitration goes, arbitrators would always decide on a single law for the whole of the contract and will not start carving up legal niches here and there.
Reasonably, there are two options as for the applicable law to these contracts: California law, or the law applicable to the registry, whether it be the law of its main place of business or its own company law.
I would like to quote here ICANN legal's answer to our follow-up:
"Historically, not having a choice of law clause seems to have worked out well in practice.
The lack of a choice of law clause, as far as ICANN is aware, has not presented big problems for either ICANN or contracted parties.
The plain language of the agreement has generally been sufficient to resolve questions between the parties and allow the parties to interpret the performance requirements, their rights and obligations in the ordinary course.
Reliance on the plain language of the agreements normally does not depend on a choice of which jurisdiction’s laws would apply.
As to why the contracts have evolved in this manner, it has essentially been a compromise that allows the choice of law issue to be handled on an issue-specific basis that takes into account the specific conduct being reviewed, the needs of the parties and ICANN’s global coordination function"
I fail to see how the RA would satisfy registries outside of the US. Would not they prefer to have a set choice of law rather than an undefined one? And not there being a problem does not mean it cannot be improved. Registries can very well refuse to litigate because of the costs, and this will look like an absence of problem from ICANN's perspective.
Moreover, I plainly reject the contention that "The plain language of the agreement (allows) the parties to interpret the performance requirements, their rights and obligations in the ordinary course." The only time this can be true is between US parties. This is just wrong for parties outside the US.
We can all see that these contracts are drafted with US law in mind. I do not even want to imagine what kind of mess would result of trying to fit this contract into any continental European legal system! Or any other legal system for that matter. And even more so if you try to divide obligations between the parties and ascribe them a different governing law...
The issue I see with this is that this situation 1) is detrimental to ICANN's accountability and 2) results in more costs for registries in case of dispute.
As for 1), I believe it is detrimental because being accountable is also being predictable. ICANN has the means to figure out these legal questions well in advance and do a proper risk assessment, while registries and registrars (especially considering the small players) might not.
As for 2), an undetermined choice of law means you need to hire a lawyer (and not just your ordinary lawyer, a specialised one) to do first and foremost an assessment of which law would be applicable and which is most likely to be applied by the arbitrator(s). This means more money (maybe too much money) gone into legal fees for the small businesses.
Solution Set the choice of law in those contracts. Given their drafting style, California would make most sense. Now to jump the gun on some criticism that I can see coming, I do believe that most if not all lawyers who can handle domain name industry/ICANN disputes do know California law anyway. This is for the sake of predictability, not for the sake of favouring the US above anyone else.
I went well beyond the "12 standard lines" rule, but I do hope I made it clear and understandable.
Best,
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participants (10)
-
Arasteh -
Bernard Turcotte -
Finn Petersen -
Greg Shatan -
Jorge.Cancio＠bakom.admin.ch -
Kavouss Arasteh
-
McAuley, David -
Paul Rosenzweig -
Raphaël BEAUREGARD-LACROIX -
Thomas Rickert