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Discretion to Terminate a Proceeding When Parties Have Also Commenced a Court Action

Discretion to Terminate a Proceeding When Parties Have Also Commenced a Court Action

The UDRP is not a coordinate forum to a court of law and was not designed to supplant a court of law. It offers has a circumscribed jurisdiction that empowers the Panel to order a domain name cancelled or transferred to the complainant. That is the extent of the relief a Panel may grant; either form is akin to a mandatory injunction. Nevertheless, a Panel has the discretion to continue the proceedings even in the face of a prior pending action in a court of law. Paragraph 18(a) of the Rules of the Policy provides that “[i]n the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.” Discretion is discussed in Acumen Enterprises, Inc v. Jonathan Morgan, FA1104001381503 (Nat. Arb. Forum May 17, 2011).

The Complainant in Acumen Enterprises (the plaintiff in a prior pending action in federal court) argued that there was precedent for the Panel to reach a decision “regardless of any concurrent legal proceeding, and that several panels have proceeded to a decision in similar circumstances.” However, proceeding to a decision is rare when the record discloses that the prior pending action comprehends the subject matter of the proceedings. “The Panel … notes that the relief of transfer of the domain name sought before the U.S. Court is essentially the same as the relief sought in the present proceeding.”

There is, also, another factor to consider concerning the paper only submission in a UDRP proceeding. There is no “full hearing.” “[I]t is obvious that in the court proceedings the controversy about factual issues can be resolved after a full hearing, where witnesses declare under oath and cross-examination is available.” Proceeding with a UDRP hearing where an ultimate issue has been submitted to a court of law would be unwise and a waste of arbitral resources. Considering that it was Complainant who initiated litigation in the U.S. Court before filing its UDRP complaint, the Panel in Acumen Enterprises “believes the best course of action is to defer to the U.S. District Court, and accordingly to terminate the present UDRP proceeding, without prejudice of any filing of a future UDRP complaint as appropriate after conclusion of the proceedings in the U.S. District Court.”

Rule 18(a) imports into the UDRP proceedings the familiar prescript of judicial economy exercised in a court of law. Generally, it makes no sense to proceed to decision in a second proceeding where there is a prior action pending or new action timely filed concerning the disputed domain name. Whether the Panel exercises its discretion “to suspend or terminate the administrative proceeding” depends on a number of factors including the status of the pending action.

There is no basis for suspension or termination where, for example, the “filing of the Complaint was done in accordance with a court order, that the matter be referred to arbitration under the Policy despite the pendency of that action,” BD Real Hoteles, SA de C.V. v. Media Insights aka Media Insight, D2009-0958 (WIPO September 15, 2009). The reverse is true where a court of law is in a position to fully resolve the claims. Deference flows in one direction only. “[C]omity alone militates in favour of paying deference to the decision of the court where the very issue that is fundamental to this administrative proceeding is to be determined,” Aussie Car Loans Pty Ltd v. Wilson Accountants Pty Ltd, (formerly Wilson and Wilson Accountants), D2008-1477 (WIPO Dec. 9, 2008).

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