[CCWG-ACCT] Lawyer's High Level Review re Proposal to Refer to 2004 ASO MOU in Mission Statement (Annex 5, Third Proposal)

Gregory, Holly holly.gregory at sidley.com
Mon Jan 18 20:27:14 UTC 2016

Dear CCWG ACCT Co-Chairs, Members, Participants and ICANN Staff,

We are writing to raise with you a high-level concern regarding the proposal to reference the 2004 Address Supporting Organization MOU (the “MOU”) in ICANN’s Mission Statement (Bylaws Article I, Section 1), which was discussed on CCWG-ACCT Call #77 (January 14).

In defining ICANN’s role in coordinating allocation and assignment at the top-most level of IP and AS numbers, Annex 05 from the Third Proposal provided as follows: “ICANN’s Mission is described in the ASO MoU between ICANN and RIRs.”

We recommend against trying to further define ICANN’s Mission through cross-reference to the MOU in the Bylaws and suggest that any specific language that you deem of critical import to defining ICANN’s Mission be actually incorporated.  (We could not find a clear statement of the ICANN Mission in the MOU.)
As a general matter, referencing all or part of an external agreement in bylaws presents a number of problems.  For example:

·         The bylaws may require a different process, parties, and threshold for amendment than the referenced agreement, and it is unclear legally which rules apply.  This problem is certainly present here.  Although the Mission will be a fundamental bylaw, the parties to the MOU could amend it on their own, circumventing the fundamental bylaw amendment process entirely.  Alternatively, perhaps the MOU’s amendment provisions would be superceded by the fundamental bylaw amendment process.  At a minimum, if the reference remains despite our advice, this issue should be addressed explicitly.

·         Referencing an outside agreement in bylaws may have the legal effect of incorporating it into the bylaws, putting all its terms on an equal footing with the bylaws, which can create problems if its provisions conflict with the bylaws in any way.  This issue has a greater chance of arising  where an entire agreement is incorporated by reference, and is clearly a problem here.  For example, ICANN’s Bylaws are ultimately governed by California law, but the MOU provides that it will be governed by International Chamber of Commerce rules in Bermuda.  Again, if the reference remains despite our advice, the CCWG should decide which document governs in case of conflict (either generally or on a topic-by-topic basis).

·         Although we generally recommend against it, clients have insisted on incorporating an entire existing agreement in their governing documents, essentially freezing the agreement as incorporated.  It was suggested on the CCWG call that the Bylaws could reference the version of the MOU as of a specific date, excluding from the Bylaws future amendments to the MOU unless the community amended the Bylaws to update the reference in the Mission.  While this strategy partially solves one problem, it leads to others.  Assuming that the MOU incorporated in the Bylaws continues to evolve over time outside of the Bylaws, there will be two versions of the MOU -- the one in the Bylaws, and the one that documents the current understandings between the ASO and ICANN.  At a minimum, this would be confusing; in a worst-case scenario, it could undermine the enforceability of the post-reference MOU.

·         Any outside agreement to be referenced in bylaws must be carefully reviewed to assess and address the sorts of consequences noted above.  We have briefly reviewed a version of the MOU, and note that the MOU itself incorporates other documents by reference, including the earlier 2003 version of the ICANN Bylaws, creating a circularity in terms of providing legal advice on this provision in the future.

While we originally thought it might be possible to work around these problems by inserting text from the MOU into the Bylaws describing this aspect of ICANN’s Mission, after our brief review of the MOU, it is not clear to us where or how it describes ICANN’s mission in any narrative text.  As we read it the MOU sets out processes and mechanisms for developing policies but does not itself describe substantive limits on ICANN or purport to define ICANN’s Mission.

Bylaws may of course include a process for developing a scope of corporate activities within the bounds of a larger mission, and the mission can be updated as appropriate to reflect developments that come out of this process, but the process itself cannot logically become part of the mission.

We hope further CCWG discussion in light of our concern, regarding the goal that the ASO and the community seek by referencing the MOU in the Mission Statement, may provide a way forward without referencing the MOU itself in the Bylaws.

Holly and Rosemary

Partner and Co-Chair
Global Corporate Governance & Executive Compensation Practice

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

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

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mm.icann.org/pipermail/accountability-cross-community/attachments/20160118/7a504eef/attachment-0001.html>

More information about the Accountability-Cross-Community mailing list