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<div>You raise a good point Malcolm. Sorry we won't see you in LA. <br>
<br>
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<font face="Tahoma" size="2"><b>From:</b> Malcolm Hutty<br>
<b>Sent:</b> Thursday, September 24, 2015 03:31:26 AM<br>
<b>To:</b> Gregory, Holly; 'Jorge.Cancio@bakom.admin.ch'; jordan@internetnz.net.nz; accountability-cross-community@icann.org<br>
<b>Cc:</b> Sidley ICANN CCWG; ICANN@adlercolvin.com<br>
<b>Subject:</b> Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board MEM Proposal<br>
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First, a big "thank you" to our counsel for another valuable piece of work.<br>
<br>
There is just one thing I would like to add. In all our discussions of<br>
the enforceability question, there is a continuing focus on the<br>
enforcement of the *outcome* of arbitration procedures. I believe we<br>
also need to pay attention to the enforcement of the *availability* of<br>
those procedures.<br>
<br>
In our proposed reforms, the main accountability tool is the arbitration<br>
of disputes through the IRP. What would happen if ICANN refused to<br>
submit to binding arbitration through the IRP in a particular case?<br>
<br>
-> Under the CCWG proposal, the Sole Member could enforce the<br>
availability of the IRP, by bringing a derivative action to obtain a<br>
court order to instruct ICANN to enter the IRP.<br>
<br>
-> Under the Board proposal, the Sole Member would not be available. It<br>
appears that in these circumstances the SOACs could initiate the MEM.<br>
This just iterates the same question to another level.<br>
<br>
The Board proposal raises a new form of arbitration, the MEM. This begs<br>
the question, *what would recourse would be available if ICANN refuses<br>
to enter into binding arbitration with an MEM issue group?*<br>
<br>
There are various pretexts it might offer for such a refusal. For<br>
example, it could deny that an MEM Issue Group had been validly formed.<br>
Or it could assert that the dispute fell outside the narrow parameters<br>
of matters that may be considered by the MEM.<br>
<br>
For example, consider the following scenario:<br>
<br>
Step 1: Someone tries to initiate an IRP<br>
Step 2: ICANN refuses to enter an IRP. ICANN asserts that the Board has<br>
acted as required by its fiduciary duty, so an IRP is moot.<br>
Step 3: An MEM Issue Group is formed to challenge ICANN's refusal to<br>
enter into the IRP as promised by a Fundamental Bylaw.<br>
Step 4: The MEM Issue Group considers that ICANN's refusal is<br>
inconsistent with the IRP Fundamental Bylaw. It decides to invoke the<br>
MEM Standing Panel to arbitrate.<br>
Step 5: ICANN refuses to submit to binding arbitration before the MEM<br>
Standing Panel. It asserts that the MEM Issue Group's position boils<br>
down to disagreeing with how the Board saw its fiduciary duty, which it<br>
says lies outside the scope of the MEM. Accordingly, ICANN refuses to<br>
appear before the MEM Standing Panel.<br>
<br>
What recourse would be available in such circumstances, and to whom<br>
would it be available?<br>
<br>
If there be no recourse in such a situation, as it appears to me, then<br>
this would be a significant accountability gap.<br>
<br>
I would ask that our lawyers address in any future review the question<br>
of the enforcement of the *availability* of arbitration as well as the<br>
enforcement of the *outcome* of arbitration.<br>
<br>
I am sorry that I will not be able to come to Los Angeles on this<br>
occasion due to pre-existing commitments, but I wish all participants well.<br>
<br>
Kind Regards,<br>
<br>
Malcolm.<br>
<br>
On 23/09/2015 14:00, Gregory, Holly wrote:<br>
> Thank you for that feedback, Jorge. We will consider whether to issue a<br>
> revised draft clarifying the point. <br>
> <br>
> <br>
> <br>
> *HOLLY* *GREGORY*<br>
> Partner<br>
> <br>
> *Sidley Austin LLP**<br>
> *+1 212 839 5853<br>
> holly.gregory@sidley.com <<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>><br>
> <br>
> <br>
> <br>
> *From:*Jorge.Cancio@bakom.admin.ch [<a href="mailto:Jorge.Cancio@bakom.admin.ch">mailto:Jorge.Cancio@bakom.admin.ch</a>]<br>
> *Sent:* Wednesday, September 23, 2015 8:56 AM<br>
> *To:* Gregory, Holly; jordan@internetnz.net.nz;<br>
> accountability-cross-community@icann.org<br>
> *Subject:* AW: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM<br>
> Proposal and ICANN Board MEM Proposal<br>
> <br>
> <br>
> <br>
> Thanks for the prompt reply – however I feel that your Memo is a bit too<br>
> “absolute” in its wording as regards to the exclusion of this specific<br>
> power from the MEM (p.4: “As noted below, the MEM process would not be<br>
> available to challenge a failure by the Board to follow this<br>
> procedure.”), while the Board Matrix is apparently clear in stating that<br>
> Board actions not complying would fall into the MEM (p. 61 Matrix: “/In<br>
> the event the Board fails to abide by these processes, or the community<br>
> believes that the Board has taken a decision in these areas that is<br>
> inconsistent with the Mission and Core Values, //the MEM will provide<br>
> binding arbitration over that issue//. In addition, the community will<br>
> have the ability to remove individual Board Directors or recall the<br>
> Board/.”)…<br>
> <br>
> <br>
> <br>
> Jorge<br>
> <br>
> <br>
> <br>
> *Von:*Gregory, Holly [<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>]<br>
> *Gesendet:* Mittwoch, 23. September 2015 14:29<br>
> *An:* Cancio Jorge BAKOM <Jorge.Cancio@bakom.admin.ch<br>
> <<a href="mailto:Jorge.Cancio@bakom.admin.ch">mailto:Jorge.Cancio@bakom.admin.ch</a>>>; jordan@internetnz.net.nz<br>
> <<a href="mailto:jordan@internetnz.net.nz">mailto:jordan@internetnz.net.nz</a>>;<br>
> accountability-cross-community@icann.org<br>
> <<a href="mailto:accountability-cross-community@icann.org">mailto:accountability-cross-community@icann.org</a>><br>
> *Betreff:* RE: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM<br>
> Proposal and ICANN Board MEM Proposal<br>
> <br>
> <br>
> <br>
> Thank you for your questions Jorge. Let me try to quickly respond in<br>
> the interest of resolving the apparent confusion. <br>
> <br>
> <br>
> <br>
> In the Frequently Asked Questions provided by the Board regarding<br>
> community enforceability, see the answer to Q3. <br>
> <br>
> <br>
> <br>
> The point is that outside of a member context there are limits on what<br>
> powers can be given to the community in a manner that would be<br>
> enforceable. That is why we wrote: <br>
> <br>
> <br>
> <br>
> As a legal matter, there is a level of uncertainty arising to doubt that<br>
> Bylaw provisions providing these rights (Budget veto etc) to the<br>
> community as represented by the SOs and ACs would be legally cognizable,<br>
> let alone enforceable, outside of a member context.<br>
> <br>
> <br>
> <br>
> We provided Jones Day and ICANN Legal the long chart yesterday morning<br>
> for comments. And we greatly appreciate that they provided comments in<br>
> a short period of time, which we reviewed and incorporated based on our<br>
> judgment. Jones Day and ICANN Legal were not provided the opportunity<br>
> to review the memo due to our time constraints but we of course welcome<br>
> and would value their comments. <br>
> <br>
> <br>
> <br>
> Kind regards, Holly<br>
> <br>
> *HOLLY* *GREGORY*<br>
> Partner<br>
> <br>
> *Sidley Austin LLP**<br>
> *+1 212 839 5853<br>
> holly.gregory@sidley.com <<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>><br>
> <br>
> <br>
> <br>
> *From:*accountability-cross-community-bounces@icann.org<br>
> <<a href="mailto:accountability-cross-community-bounces@icann.org">mailto:accountability-cross-community-bounces@icann.org</a>><br>
> [<a href="mailto:accountability-cross-community-bounces@icann.org">mailto:accountability-cross-community-bounces@icann.org</a>] *On Behalf Of<br>
> *Jorge.Cancio@bakom.admin.ch <<a href="mailto:Jorge.Cancio@bakom.admin.ch">mailto:Jorge.Cancio@bakom.admin.ch</a>><br>
> *Sent:* Wednesday, September 23, 2015 4:39 AM<br>
> *To:* jordan@internetnz.net.nz <<a href="mailto:jordan@internetnz.net.nz">mailto:jordan@internetnz.net.nz</a>>;<br>
> accountability-cross-community@icann.org<br>
> <<a href="mailto:accountability-cross-community@icann.org">mailto:accountability-cross-community@icann.org</a>><br>
> *Subject:* Re: [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM<br>
> Proposal and ICANN Board MEM Proposal<br>
> <br>
> <br>
> <br>
> Thanks Jordan, for forwarding these valuable inputs.<br>
> <br>
> <br>
> <br>
> I’m going through the Memos and I just stumbled on an issue where I’m<br>
> not sure whether the Memo reflects or not the Board proposal. On page 4<br>
> of the “Memorandum” it is said that the community power on budget,<br>
> strategic and operating plan is “not subject to binding arbitration<br>
> under the Board proposal” – but on page 61 of the Board Matrix it is<br>
> affirmed that “/In the event the Board fails to abide by these<br>
> processes, or the community believes that the Board has taken a decision<br>
> in these areas that is inconsistent with the Mission and Core Values,<br>
> //the MEM will provide binding arbitration over that issue//. In<br>
> addition, the community will have the ability to remove individual Board<br>
> Directors or recall the Board/.”<br>
> <br>
> <br>
> <br>
> Am I missing something?<br>
> <br>
> <br>
> <br>
> And, this leads me to a more general question: at the beginning of the<br>
> Memo it is stated that Jones Day was consulted in order to avoid<br>
> misunderstandings – did they reply and confirm that there were none?<br>
> <br>
> <br>
> <br>
> Thanks and regards<br>
> <br>
> <br>
> <br>
> Jorge<br>
> <br>
> <br>
> <br>
> *Von:*accountability-cross-community-bounces@icann.org<br>
> <<a href="mailto:accountability-cross-community-bounces@icann.org">mailto:accountability-cross-community-bounces@icann.org</a>><br>
> [<a href="mailto:accountability-cross-community-bounces@icann.org">mailto:accountability-cross-community-bounces@icann.org</a>] *Im Auftrag<br>
> von *Jordan Carter<br>
> *Gesendet:* Mittwoch, 23. September 2015 06:20<br>
> *An:* Accountability Cross Community<br>
> <accountability-cross-community@icann.org<br>
> <<a href="mailto:accountability-cross-community@icann.org">mailto:accountability-cross-community@icann.org</a>>><br>
> *Betreff:* [CCWG-ACCT] Fwd: [Acct-Legal] Comparison of CCWG CMSM<br>
> Proposal and ICANN Board MEM Proposal<br>
> <br>
> <br>
> <br>
> Hi all - forwarded to get this to you ASAP, not sure who was meant to.<br>
> <br>
> J<br>
> <br>
> <br>
> <br>
> ---------- Forwarded message ----------<br>
> From: *Gregory, Holly* <holly.gregory@sidley.com<br>
> <<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>>><br>
> Date: 23 September 2015 at 14:04<br>
> Subject: [Acct-Legal] Comparison of CCWG CMSM Proposal and ICANN Board<br>
> MEM Proposal<br>
> To: "thomas@rickert.net <<a href="mailto:thomas@rickert.net">mailto:thomas@rickert.net</a>>" <thomas@rickert.net<br>
> <<a href="mailto:thomas@rickert.net">mailto:thomas@rickert.net</a>>>, "mathieu.weill@afnic.fr<br>
> <<a href="mailto:mathieu.weill@afnic.fr">mailto:mathieu.weill@afnic.fr</a>>" <mathieu.weill@afnic.fr<br>
> <<a href="mailto:mathieu.weill@afnic.fr">mailto:mathieu.weill@afnic.fr</a>>>, León Felipe Sánchez Ambía<br>
> <leonfelipe@sanchez.mx <<a href="mailto:leonfelipe@sanchez.mx">mailto:leonfelipe@sanchez.mx</a>>>,<br>
> "ccwg-accountability5@icann.org <<a href="mailto:ccwg-accountability5@icann.org">mailto:ccwg-accountability5@icann.org</a>>"<br>
> <ccwg-accountability5@icann.org<br>
> <<a href="mailto:ccwg-accountability5@icann.org">mailto:ccwg-accountability5@icann.org</a>>>, Alice Jansen<br>
> <alice.jansen@icann.org <<a href="mailto:alice.jansen@icann.org">mailto:alice.jansen@icann.org</a>>>, Grace Abuhamad<br>
> <grace.abuhamad@icann.org <<a href="mailto:grace.abuhamad@icann.org">mailto:grace.abuhamad@icann.org</a>>><br>
> Cc: Sidley ICANN CCWG <sidleyicannccwg@sidley.com<br>
> <<a href="mailto:sidleyicannccwg@sidley.com">mailto:sidleyicannccwg@sidley.com</a>>>, ICANN-Adler <ICANN@adlercolvin.com<br>
> <<a href="mailto:ICANN@adlercolvin.com">mailto:ICANN@adlercolvin.com</a>>><br>
> <br>
> Dear Co-Chairs, Members and Participants of CCWG, <br>
> <br>
> <br>
> <br>
> Attached please find three documents to assist in preparation for our<br>
> meeting in L.A.:<br>
> <br>
> <br>
> <br>
> · A memo from Sidley and Adler with our high level observations<br>
> regarding comparison between the Board Proposal and the CCWG Proposal. <br>
> <br>
> · A Summary Comparison of Key Characteristics of CMSM Model and<br>
> Board Proposal – this or something along these lines will be expanded<br>
> out in the next several days to include the Sole Designator model as<br>
> requested on today’s call<br>
> <br>
> · Comparison of CCWG 2^nd Draft Proposal (Community Mechanism as<br>
> Sole Member) and ICANN Board Proposal (Comparison)<br>
> <br>
> We look forward to seeing you in L.A.,<br>
> <br>
> <br>
> <br>
> Holly and Rosemary<br>
> <br>
> <br>
> <br>
> *HOLLY* *J. GREGORY*<br>
> Partner and Co-Chair<br>
> Global Corporate Governance & Executive Compensation Practice<br>
> <br>
> *Sidley Austin LLP**<br>
> *+1 212 839 5853 <tel:%2B1%20212%20839%205853><br>
> holly.gregory@sidley.com <<a href="mailto:holly.gregory@sidley.com">mailto:holly.gregory@sidley.com</a>><br>
> <br>
> <br>
> <br>
> <br>
> <br>
> <br>
> <br>
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> <br>
> -- <br>
> <br>
> Jordan Carter<br>
> <br>
> Chief Executive <br>
> *InternetNZ*<br>
> <br>
> <br>
> +64-4-495-2118 (office) | +64-21-442-649 (mob)<br>
> Email: jordan@internetnz.net.nz <<a href="mailto:jordan@internetnz.net.nz">mailto:jordan@internetnz.net.nz</a>>
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-- <br>
Malcolm Hutty | tel: +44 20 7645 3523<br>
Head of Public Affairs | Read the LINX Public Affairs blog<br>
London Internet Exchange | <a href="http://publicaffairs.linx.net/">http://publicaffairs.linx.net/</a><br>
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