April 2004
Monthly Archive
Sun 4 Apr 2004
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Philippine Trust Co. v. Roldan
99 Phil 392
Facts: 17 parcels of land (Guiguinto, Bulacan) were inherited by Mariano L. Bernardo from his father. Socorro Roldan, his stepmother, was appointed by the court as his guardian. Roldan was able to secure permission later on to sell his ward’s property for the alleged purpose of investing the proceeds thereof in a residential house in Manila, to which Mariano allegedly desired. Roldan sold the parcels of land to his brother-in-law Dr. Fidel C. Ramos, to which a judicial confirmation of the sale was obtained. The next day, Ramos executed a deed of conveyance covering the same parcels for the sum of P15,000. Two months later, Roldan sold 4 parcels to Emilio Cruz for P3,000, reserving to herself the right to purchase. The Philippine Trust Company replaced Roldan as guardian a year later, and thereafter, filed a complaint in the lower court to annul the contracts regarding the parcel of land pursuant to the prohibitions provided in Article 1459. The trial court upheld the validity of the contracts but allowing the minor to repurchase the land for P15,000 within one year.
Issue: Whether the contracts of sale involving the 17 parcels of land are valid.
Held: The three contracts of sale are void; the first two for violation of article 1459 of the Civil Code; and the third because Roldan could pass no title to Emilio Cruz. The annulment carries with is (Article 1303 Civil Code) the obligation of Roldan to return the 17 parcels together with their fruits and the duty of the minor, through his guardian to repay P14,700 with legal interest. Guardianship is a trust of the highest order, and the trustee cannot be allowed to have any inducement to neglect his ward’s interest and in line with the court’s suspicion whenever the guardian acquires the ward’s property, the Court has no hesitation to declare that, in the eyes of the law, the guardian (Roldan) took by purchase her ward’s parcels (thru Dr. Ramos), and that Article 1459 of the Civil Code applies. The reconveyance of the property to Roldan after being sold to her brother-in-law within a week of each other, or a day after the judicial confirmation of sale was obtained, raises suspicions. Even if arguendo she acted without malice, the temptation which naturally besets a guardian so circumstanced, necessitates the annulment of the transaction, even if no actual collusion is proved (so hard to prove) between such guardian and the intermediate purchaser. This would uphold a sound principle of equity and justice.
Sun 4 Apr 2004
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Rubias v. Batiller
51 SCRA 120
Facts: Francisco Militante claimed ownership over land in Iloilo (Bo. Gen. Luna, Barotac Viejo), to which he filed an application for registration of title with the CFI Iloilo. The application was opposed by the Director of Lands. The CFI dismissed the registration. Pending disposal of the appeal in the Court of Appeals, Militante sold the land to Domingo Rubias, his son-in-law and a lawyer by profession. Rubias declared the land for taxation purposes under various tax declarations and land taxes. The CA likewise dismissed Militante’s application. Meanwhile, other claimants declared the same land for taxation purposes (tax declaration and land tax), one of whom is Isaias Batiller. In 1960, Rubias filed a forcible entry case against Batiller before the municipal court, which the latter ruled in favor of Batiller. Rubias appealed to the CFI, which affirmed the judgment in favor of Batiller. In 1964, Rubias filed a suit to recover ownership and possession of land to claim portions of lot, bought from Militante, which were occupied by Batiller. The lower court (CFI) dismissed the case. Rubias appealed to the Court of appeals which certified the appeal to the Supreme Court for involving purely legal questions.
Issue: Whether the sale of the lot by Francisco Militante to his son-in-law Domingo Rubias is valid for the latter to claim ownership over said lot
Held: The purchase by a lawyer of the property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the Civil Code, and that consequently, Rubias’ purchase of the property in litigation from his father-in-law was void and could produce no legal effect (Article 1409 [7] of the Civil Code). It is void and not voidable (as the 1929 case of Director of Lands v. Abagat which declared such purchase void superceded the 1911 case of Wolfson v. Estate of Martinez which declared such purchase mere voidable). The nullity of prohibited contracts is definite and permanent and cannot be cured by ratification. The public interest and public policy remain paramount and do not permit of compromise or ratification. However, when the causes of nullity which have ceased to exist, a second contract may be executed and would then be valid from its execution; however, it does not retroact to the date of the first contract.
Still, Rubias complaint, to be declared absolute owner of the land and to be restored to possession thereof with damages, was bereft of any factual or legal basis. The CA’s final judgment affirming the dismissal of Militante’s application of registration made it conclusive that Militante lack rightful claim or title to the land. There was no right or title to the land that could be transferred or sold by Militante’s purported sale in favor of Rubias in 1956.
Sun 4 Apr 2004
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Guiang v. CA
291 SCRA 372
Facts: Judie and Gilda Corpuz were married in 1968 in Bacolod City. In 1983, the spouses bought a lot in South Cotabato (Brgy. Gen. Paulino Santos, Koronadal) from Manuel Callejo through a conditional deed of sale, the consideration payable in installment. In 1988, the spouses sold half of the land to Antonio and Luzviminda Guiang. The latter build their house on their half of the lot. In 1989, Gilda went to Manila, with the consent of her husband, to look for work abroad. She became a victim of an unscrupulous illegal recruiter. While she was in Manila, her husband sold the remaining half of the property to the Guiangs, even if the latter held the letter of Gilda’s protestations over said sale. To cure the defect in the husband’s title over the land, Luzviminda Guiang executed another agreement over the lot with the widow of Manuel Callejo (Manuela Jimenez). A week after, Gilda returned to Koronodal and gathered her children, living in different households, and stayed at their house. The Guiangs filed a complaint against Gilda with the barangay authorities for trespassing. An amicable settlement was signed before the barangay captain, requiring Gilda and her family to vacate the premises free of charge. Gilda, alleging coercion and misrepresentation, sought to annul said document, to no avail. Gilda, then, filed an amended complaint against her husband and the Guiangs, seeking that the court declare the deed of sale involving the conjugal property null and void. The lower court (RTC) ruled in favor of Gilda Corpuz but ordered her to pay the amounts paid as unpaid balance for the lot and the realty taxes incurred by the Guiangs. The appellate court affirmed said ruling.
Issue: Whether the sale made by Judie Corpuz to Antonio and Luzviminda Guiang is valid.
Held: The contract of sale of the conjugal property is void because the written consent of one spouse is absent or totally inexistent; pursuant to the amendatory effect made by the Family Code (Article 124), which was made effective 3 August 1988 and which covers the encumbrance or the alienation of the conjugal property in the present case. Encumbrance or alienation of conjugal property by one spouse without the consent of the other spouse is no longer voidable (as it was under Article 166 in relation to Article 173 of the Civil Code).
Under the Family Code, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. The “amicable settlement” agreed by the parties merely states that Gilda and family are to vacate the property, and does not state an acceptance of the continuing offer.
Sun 4 Apr 2004
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Calimlim-Canullas v. Fortun
128 SCRA 675
Facts: Fernando Canullas and Mercedes Calimlim were married in 1962. They lived in a small house on a 891 sq.m. residential land in Pangasinan (Bagabac, Bugallon). When Canullas’ father died in 1965, he inherited the land. In 1978, he abandoned the family and lived with Corazon Daguines. In 1980, he sold the property to Daguines for P2,000. Daguines filed a complaint for quieting of title and damages against Mercedes, after the former was unable to take possession of the house and lot. The trial court (CFI) ruled in favor of Daguines, ruling that she is the owner of ½ of the land as well as ½ of the house erected on said land. Upon reconsideration, the judgment was modified wherein Daguines is the owner of the land and 10 coconut trees thereon, and the sale of the conjugal house including 3 coconuts and other crops planted during the conjugal relation of the spouses is null and void.
Issue: Whether the sale made by Fernando Canullas to Corazon Daguines was valid.
Held: The contract of sale was null and void for being contrary to morals and public policy, pursuant to Article 1409 of the Civil Code. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. That sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects.
Sun 4 Apr 2004
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Medina v. CIR
1 SCRA 302
Facts: Antonio Medina is married to Antonia Rodriguez (since 1944), both not having property or business of their own at that time of marriage. Antonio in 1946 acquire forest concessions in Isabela (Sn. Mariano and Palanan). Logs cut and removed by Antonio from his concessions were initially sold to different persons in Manila through his agent Mariano Osorio. The wife later engaged in business as lumber dealer and sold all logs produced in the Sn. Mariano concession to persons in Manila through the same agent. The Collector of Internal Revenue imposed a tax assessment on Antonio Medina considering the sales of the wife as that of Antonio’s original sales taxable under Section 186 NIRC. Antonio appealed, contending that the spouses had a premarital agreement of absolute separation of property, the records of which was allegedly destroyed during World War II. The Collector modified the assessment, reducing the amount to be paid. Antonio requested for consideration, but which was denied. Antonio appealed to the CTA, which upheld the assessment of the collector except for so-called compromise penalties. Antonio filed present petition.
Issue: Whether the sale made by Antonio to his wife were valid so as to exempt the sales made by Antonia from being considered as part of Antonio’s original sales taxable under Section 186 of the NIRC.
Held: As there is no evidence of a pre-marital agreement of absolute separation between the spouses, the sales made by Antonio (as forest concessionaire) to his wife (as lumber dealer) are null and void as these are contracts violative of Article 1490 of the Civil Code. Being void transactions, the sales made by Antonio to his wife were correctly disregarded by the Collector in his tax assessments that considered as the taxable sales those made by the wife through the spouses’ common agent, Osorio.
Sun 4 Apr 2004
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Puyat & Sons v. Arco Amusement
72 Phil 402
Facts: Gonzalo Puyat & Sons is the exclusive agent of Starr Piano Company of Richmond, Indiana USA, in the Philippines. Teatro Arco, or Arco Amusement Company, desiring to equip its cinematograph with sound reproducing devices, approached Puyat. It was agreed by the parties that Puyat would in behalf of Arco order equipment from Starr Piano and that Arco would pay Puyat in addition to price of the equipment, 10% commission plus all expenses such as freight, insurance, banking charges, cables, etc. Puyat informed Arco that the price of the equipment was $1,700, to which Arco agreed. Later, a similar arrangement was made by Arco for the purchase of similar equipment for $1,600 with 10% commission, with Puyat charging an additional flat charge of $160 for all expenses and charges. 3 years later, Arco learned that the price quoted by Puyat on the 2 orders were not the net price but the list price for the equipment. Arco filed a complaint with the trial court (CFI) demanding reimbursement from said “overpriced” sales. The trial court ruled in favor of Puyat, but the Court of Appeals reversed such decision and declared Puyat an agent of Arco Amusement in the purchase of said equipment.
Issue: Whether the agreement made between Puyat and Arco Amusement is that of purchase and sale or that of agency.
Held: Gonzalo Puyat & Sons cannot be the agent of Arco Amusement in the purchase of equipment from Starr Piano Company as Puyat & Sons is already the exclusive agent of Starr Piano in the Philippines. Puyat cannot be the agent of both vendor and purchaser. The fact that a commission was offered to the other does not necessarily mean that the latter has become the agent of the former, as this was only an additional price which Arco bound itself to pay and which is not incompatible with the contract of purchase and sale. Puyat is not bound to reimburse the profit acquired in the transaction, as this is the very essence of commerce involving middlemen and merchants. The contract is the law between the parties. What does not appear on the face of the contract should be regarded as “dealer’s or trader’s talk” which cannot bind either party. Not every concealment is fraud, short of fraud, and such as that in this case, is considered as business acumen.
Sun 4 Apr 2004
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Quiroga v. CA
38 Phil 501
Facts: A contract was entered between Quiroga and Parsons for the exclusive sale of Quiroga beds in the Visayas Islands, specifically Iloilo. Quiroga furnishes the beds to Parson, who in turn pay the price in the manner stipulated. Quiroga provided a discount of 20 to 25% for the beds, depending on their class. Later, Quiroga filed a case against Parsons for violation of its obligation not to sell the beds at higher price than those of the invoices, etc. (which are not expressly stipulated in the contract, except for the manner the beds are ordered by the dozen). Quiroga maintains that Parson is his agent for the sale of his beds in Iloilo, and that the contract is that of commercial agency.
Issue: Whether the contact is that of sale or of commercial agency.
Held: The contract between the parties is a contract of purchase and sale as Parson, by receiving the bed, was necessarily obliged to pay their price within the term fixed, without any other consideration and regardless as to whether he had or had not sold the bed. The words “commission on sales” in the contract is nothing else than a mere discount on the invoice price. Further, the word “agency” used thereon only expresses that Parson was the sole seller of Quiroga beds in the Visayas. None of the other clauses of the contract are not incompatible with the contract of purchase and sale.
Sun 4 Apr 2004
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Romero v. CA
250 SCRA 15
Facts: Virgilio Romero and his foreign partners decided to put up a central warehouse in Metro Manila. Alfonso Flores, in behalf of Enriqueta Chua vda. De Ongsiong, proposed the latter’s lot to Romero as the site for the said warehouse. A contract denominated as “Deed of Conditional Sale” was executed between Romero and Ongsiong where the amount of P50,000 was received from Romero for the purpose of taking up am ejectment case against the squatters found therein. Ongsiong sought to return the amount she received from Romero as she claimed she is unable to rid the land of squatters, notwithstanding the favorable judgment already promulgated by the court in the ejectment case. Romero’s counsel refused the tender and expressed willingness to underwrite the expense of executing the judgment chargeable to the purchase price of the land. Ongsiong filed a case with the trial court for the rescission of the deed of “conditional” sale, and for the consignation of the amount of P50,000. The trial court rendered a decision in favor of Romero, which was reversed by the Court of Appeals.
Issue: Whether the “Deed of Conditional Sale” is a perfected contract of sale
Held: The deed of sale, even if denominated as a deed of conditional sale, may be treated as absolute in nature, especially if title to the property sold is not reserved in the vendor or if the vendor is not granted the right to unilaterally rescind the contract predicated on the fulfillment or non-fulfillment of the prescribed condition. In determining the real character of contract, the substance and not the title given by the party is more significant. Upon perfection, i.e. where the seller obligates himself, for a price certain, to deliver and to transfer ownership of a specific thing or right to the buyer over which the latter agrees, the parties are bound not only to the fulfillment of what was expressly stipulated but also the consequences which may be in keeping with good faith, usage and law. Being a perfected contract of sale, no rescission can be had. The proper action is an action for damages. Arguendo that rescission is available as a remedy, as provide by Article 1191 in reciprocal obligations, it may only be availed of by the injured party.
Sun 4 Apr 2004
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Coronel v. CA
263 SCRA 15
Facts: Romulo Coronel executed a document entitled “Receipt of Downpayment” in favor of Ramona Patricia Alcaraz for P50,000 downpayment of the amount of P1.24M as purchase price for an inherited house and lot, without reservation to withhold the transfer of such property until full payment. The purpose of such downpayment was for the heirs to transfer the title to their name. Upon the registration of the property to name of the heirs, the Coronels sold the same property to Catalina B. Mabanag for P1.58M. The Coronels rescinded the contract with Alcaraz by depositing the downpayment amount in a bank account in favor of Alcaraz. Alcaraz filed a complaint for specific performance, which the trial and the appellate court ruled in her favor.
Issue: Whether the “receipt of downpayment” serves a contract to sell or a conditional contract of sale.
Held: The agreement is a contract of sale as there was no express reservation of ownership or title to the subject parcel of land. Petitioners did not merely promise to sell the property to private respondent upon the fulfillment of the suspensive condition but on the contrary, having already agreed to sell the subject property, they undertook to have the certificate of title changed to their names and immediately thereafter, to execute the written deed of absolute sale. The suspensive condition was fulfilled on 6 February 1985 and thus, the conditional contract of sale between the parties became obligatory, the only act required for the consummation thereof being the delivery of the property by means of the execution of the deed of absolute sale in a public instrument, which petitioners unequivocally committed themselves to do as evidenced by the “Receipt of Down Payment.”
Thu 1 Apr 2004
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Introduction to domain names
The Internet provides diverse content that changes hour after hour and renders the Internet to be, in its totality, a virtual heap of sparsely organized data and resources. One can only imagine the tedious process and the near impossible feat of memorizing numerical IP (Internet Protocol) addresses, like 209.50.251.234, to reach sought resources or websites, if host names or domain names, like www.arellanolaw.net, do not exist. []
A domain name identifies one or more IP addresses [] and is used in the global addresses of documents and other resources in the World Wide Web, or the Uniform Resource Locators (URLs), which identify particular Web pages. Every domain name has a suffix that indicates which top level domain (TLD) it belongs to: such as .com for commercial business, .net for network organizations, .org for non-profit organizations, .gov for government agencies, .edu for educational institutions, to name a few. A domain name may further admit an additional suffix that indicates country code Top-Level Domain (ccTLD), a two-letter codes in the ISO 3166-1 standard codes for the representation of names of countries or territories, such as .ph for the Philippines.
The Internet Corporation for Assigned Names and Numbers (ICANN) is the internationally organized, non-profit corporation that has responsibility for Internet Protocol (IP) address space allocation, protocol identifier assignment, generic (gTLD) and country code (ccTLD) Top-Level Domain name system management, and root server system management functions. These services were originally performed under United States Government contract by the Internet Assigned Numbers Authority (IANA) and other entities. As a private-public partnership, ICANN is dedicated to preserving the operational stability of the Internet, to promoting competition; to achieving broad representation of global Internet communities, and to developing policy appropriate to its mission through bottom-up, consensus-based processes. [] DotPH Inc. is the ICANN Designated Registry Operator of the .ph ccTLD since 1990.
Trade names and trademarks vis-a-vis domain names
A domain name locates an organization or other entity on the Internet, usually by appending a gTLD suffix (such as .com, .net or .org) to said organization’s trade name. The selection and acquisition of domain names, thus, stir up property issues as it involves goodwill, trade names and trademarks, which are recognized intangible properties. [] As the registries for trademarks / tradenames and domain names are separate and distinct but that both recognize the “first to file” rule, the situation provides opportunity for enterprising entities to purchase domain names that may correspond to another entity’s trademark purposed for a possible resale of such domain name at a higher price to an obviously interested entity, or purposed for a virtual forum containing adverse opinions against said obviously interested entity. The institutionalization of procedures as to Uniform Domain Name Dispute Resolution and the deployment of Nameholder warranty clauses in registration contracts with domain registries minimize, but do not eliminate, the conflicting interests between trademark owners and domain name registrants.
Chronic intellectual property issues still remain involving the gTLD names – which are supposed to be United States TLDs – because the registries of which are open or available to all possible registrants worldwide. A clear development in the protection of country specific domains involves that of the .us TLD of the United States. The United States, through its appointed central registrar Neustar, provided stricter guidelines for .us TLD registration. For an entity to register a .us domain name, the entity should either be (1) a natural person (i) who is a United States citizen, (ii) who is a permanent resident of the United States of America or any of its possessions or territories, or (iii) whose primary place of domicile is in the United States of America or any of its possessions; or (2) a United States entity or organization that is (i) incorporated within one of the 50 US states, the District of Columbia, or any of the United States possessions or territories, or (ii) organized or otherwise constituted under the laws of a state of the United States of America, the District of Columbia or any of its possessions or territories (including a federal, state, or local government of the United States or a political subdivision thereof, and non-commercial organizations based in the United States); or (3) a foreign entity or organization that has a bona fide presence in the United States of America or any of its possessions or territories. [] On the other hand, for an entity to register a .ph domain name in the Philippines, the Domain Name Applicant need only to be either (1) an identifiable human individual (over the age of 18 years); or (2) a legally recognized statutory entity (such as a corporation, limited liability company, partnership, or PLC). []
gTLD name registrations from the Philippines are relatively high inasmuch as having a gTLD name is perceived to have a greater prestige than having a ccTLD name in light of the former’s “international” stature; or on the economic side, that the cost of purchasing a gTLD name is relatively cheaper than purchasing a ccTLD name. []
Domain name wait-list
ICANN approved the creation of VeriSign Inc.’s “wait-listing service” on 6 March 2004, allowing people to bid on domain names that are about to expire. Only one person is allowed to speculate or reserve a domain name, owned by somebody else, at a time. Speculation is fraught with risk as one is not sure whether a domain name would even return to open market. Speculators would pay $20 a year, excluding markup, year on end without any return on their investment.
The waitlist service is not new in the Philippines. DotPH has been offering a wait-list service since September 2002, where a prospective registrant who signs up for the Waitlist is first in line to get a domain that expires and is not renewed. The cost of signing up for the Waitlist service is the same as registering a domain. If the current registrant renews the domain or the person on the Waitlist simply gets tired of waiting for the domain to expire, he can use the Waitlist fee to register an available domain. The registrant can even choose to Waitlist another domain instead, at no extra charge. [] The US model on the wait-list service is different inasmuch as one cannot recover the wait-listing fee if the current registrant of the coveted domain name renew his subscription. The opportunity to shift the application of the wait-listing fee in the Philippines to an available domain name or to another domain name that may be waitlisted very much considers paragraph 3, Article 1461 of the New Civil Code of the Philippines (RA No. 386) which provides that the “sale of a vain hope or expectancy is void.”
Proposed Philippine government control on the .ph ccTLD
On 13 January 2004, the National Telecommunications Commission (NTC) issued a working draft of its “Guidelines in the Administration of the .Ph Domain Name.” The NTC stated in the guidelines’ preamble that the .ph domain name is a public resource and is part of the Philippine national patrimony; that the State has the sovereign right over Internet-related public policy issues; that the Internet community must be ensured with an efficient, stable, fair and transparent administration of the .ph domain; and that the administrator of the .ph domain is the trustee of the country code top level domain for the Philippines and the global Internet community, and thus is accountable to the local Internet community and must be able to carry out the necessary responsibilities, and have the ability to do an equitable, just, honest and competent job. It outlined the qualifications, delegation and recognition, and technical competence of the Administrator; the management and delineation of functions as to the registry and the various registrars; the registration of domain names, and all matters pertaining to transparency and accountability, fairness, service, privacy in the registration thereof; the use, marketing and promotion of the .ph domain; dispute resolution; and re-delegation of the registry.
On 4 February 2004, the PH domain Registry (dotPH) submitted its comments stating thereon, among others, that specific problems must be identified and solutions found via a collaborative effort of both parties. DotPH announced its intention not to attend the 30 March 2004 hearing as (1) no problems in PH domain operation/administration have been pointed out by the government despite DotPH’s repeated requests; (2) that the government has not shown that there is a need for Guidelines at all and that these will not result in new, additional problems; and that government has not responded to inputs previously given, preventing the Guidelines to be discussed on its own merits. DotPH however reiterated its intent to continue participating in the process, hoping for a comprehensive solution.
The crux of contention revolves around the issue whether the .ph domain is “part of Philippine patrimony” subject to “sovereign right” of the State; or whether the .ph domain is a US Government resource inasmuch as ICANN reports its proposed actions on domain registry re-delegation, including ccTLDs, to the US Department of Commerce. From thereon flows the issue whether the Philippine Government, in the exercise of its police power, is the ultimate authority on the .ph ccTLD so as to formulate separate guidelines on the re-delegation of the administration of the Registry; or whether the delegation or re-delegation of the ccTLD is within the jurisdiction of ICANN where the government is only in the same level as the local Internet community, whose interest is given equitable consideration in the processing of a request for re-delegation.
It must be noted that ICANN handles all requests for redelegation and thus, has the responsibility to neutrally investigate and assess requests on all matters relating to changes in the DNS root, including ccTLD delegations and redelegations. It uses RFC 1591 [] as a basis, along with ICP-1, [] and the ICANN Governmental Advisory Committee Principles for the Delegation and Administration of Country Code Top Level Domains (GAC Principles).
Global issue whether national governments or the private sector should control the Internet
The issue whether government(s) or the private sector should control the Internet is not locally isolated. In December 2003, United Nations (UN) member countries requested the UN Secretary General to put together a panel of experts from government, industry and the public to study who should control the regulation of the Internet. Some developing countries have urged the UN to assume control over many of ICANN’s primary functions, but US and European leaders have urged the UN to affirm ICANN’s role. The high-tech summit reconvenes in Tunisia in 2005.
Endnotes
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