.Spa launch muddied by court order – Domain Name Wire

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3 Comments April 22, 2021
Ownership fight and a battle over premium domains have thrown doubt into .spa’s launch this week.
A ruling by a Hong Kong court has muddied the planned launch of the .spa top level domain in sunrise this week.
The court responded to a lawsuit and request for injunction stemming from an ownership dispute.
Joel Disini of DotPH has been involved in a long-running dispute over his ownership in .spa and other domain names applied for by an entity called Namesphere. DotPH invested in Namesphere, which was created to invest in new top level domains. Despite initiating its investment in 2012, Disini says his company didn’t receive its shares until February of this year.
In the case of .spa, Disini says that he and Edmon Chung of dotAsia, who created Namesphere, agreed that $60,000 of DotPH’s initial $300,000 investment in Namesphere was earmarked for a 30% stake in .spa. In a court filing, Chung disputes that DotPH has direct ownership in .spa.
Namesphere later struck a deal with Asia Spa and Wellness Promotion Council Limited to run the domain.
Disini says DotPH’s direct ownership in .spa isn’t being recognized. He filed for an injunction ahead of the planned .spa launch because he’s concerned that premium .spa domains might be sold below their value. He argued:
For example, an unscrupulous registry operator can effectively dissipate the value of the TLD by (1) selling premium sub-domains to connected persons at an undervalue via private sales, (2) not classifying valuable sub-domains as premium and selling them at undervalue to connected persons (by e.g. special auction during the landrush phase) or (3) engaging in collusion with an auctioneer responsible for auctioning off sub-domains to engineer sales to desired persons instead of the general public. It can be very difficult for an outsider to investigate or verify allegations of such misconduct. On top of that, even putting aside such misconduct, selling premium sub-domains at undervalue (e.g. due to failure to set appropriate minimum or reserve price; oversight in supervising auctions, etc) must also be a matter of real concern.
DotPH’s request for an injunction didn’t necessarily request the launch to be delayed. It wanted protections to prevent the sale of domains below value and requested that half of the revenue be put into escrow.
The defendants disagree (pdf) with many of Disini’s allegations.
The High Court of the Hong Kong Special Administrative Region Court of First Instance officially stamped an order today that is dated April 1, prohibiting the registry from selling, leasing or otherwise disposing of any .spa domains.
Lawyers for DotPH sent a letter to registrars urging them to refrain from selling the domains. They also sent letters to ICANN and Afilias (Donuts), the back end provider for the domain.
But Disini tells Domain Name Wire that Asia Spa and Wellness Promotion Council Limited sent a fax (pdf) to DotPH’s lawyers on April 14, saying it would proceed with the launch because on April 20 and that the registrants’ contracts are with the registrars and not the registry.
It also sent an email to registrars, stating that if it entered into is Registry-Registrar Accreditation agreement prior to April 1, it believes the agreement is still valid for offering domains.
It seems that the registry might be using language in the order that excepts fulfillment of the registry’s existing contractual obligations and who the agreements are between. Disini disagrees with the registry’s assertions and argues the registry can delay the launch at any time.
Disini provided an unsigned draft amended order that focuses on making sure there’s no self-dealing of premium domains between the registry and parties to the lawsuit.
Of course, the issue of delaying the launch or protecting premium domains is predicated on there being significant value in .spa premium domain names.
Court action continues in the case.
I reached out to Edmon Chung this morning and will update this story if he responds.
Categories: Policy & Law
Andrew Allemann has been registering domains for over 25 years and publishing Domain Name Wire since 2005. He has been quoted about his expertise in domain names by The Wall Street Journal, New York Times, and NPR. Connect with Andrew: LinkedInTwitter/XFacebook
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John Berryhill says
April 22, 2021 at 10:37 am
Hopefully, the parties will find a happy ending to this dispute.
Steve says
April 22, 2021 at 8:52 pm
“concerned that premium .spa domains might be sold below their value”
Hilarious. It’s impossible for any .spa domains to be labeled “premium.”
Joel Disini says
April 25, 2021 at 1:26 pm
In the fall of 2018, the DotAsia board was stunned to discover that the company was being sued by Jason Chapnik (one of the founders of .TV) over .BOX, a joint venture between Mr. Chapnik and Namesphere, a company controlled by DotAsia. Despite repeated questioning, DotAsia CEO Edmon CHUNG would not reveal the reasons for the lawsuit, other than to say Mr. Chapnik was extremely litigious and was the sort of person who would “sue his own neighbor”.
A phone call to Mr. Chapnik would soon reveal that Mr. Chung had taken Mr. Chapnik’s $1.5M to acquire .BOX from Amazon, but more than a year after, Mr. Chung had yet to issue Mr. Chapnik’s shares in .BOX. Mr. Chapnik was alarmed out by this, and hence the lawsuit. This led to an audit of Mr. Chung’s other dealings, and it was soon discovered that Namesphere itself had likewise not issued shares to my company, DotPH, (even though money had changed hands in 2012). Furthermore, around $1.2M in cash was missing from Namesphere, and payments had been made to Mr. Chung, his wife, and his sister, despite the fact that none of them had been appointed as employees or consultants to Namesphere. No bank account had been created for Namesphere, and Mr. Chung refuses (and continues to refuse) to answer questions about the finances of Namesphere!
And so I began to demand that these issued be addressed, and that the same fate not befall .SPA, a company where DotPH and Namesphere owned 50% equity in. To my surprise, in a clandestine meeting was held on Sept 18, 2019, and Mr. CHUNG convinced the board of dotAsia to abandon our 50% equity in .SPA! https://www.dot.asia/dotasia-files/board/meeting-minutes/board/DotAsia-BoardMinutes-20190918_FINAL.pdf. This was a complete shock and I could not understand why he was doing this. I surmised that some secret deal had been struck between ASWCP (the Registry that now controlled 100% of .SPA) and Mr. Chung, but I could not tell what it was.
I then discovered that in 2008, during the launch of .ASIA, there were accusations that certain premium domains did not make it to auction (or were auctioned off at nominal prices) and ended up in offshore companies whose ownership was traced back to the auctioneer, pool.com. These domains included 50 or so premium names such as porn.asia, dating.asia, stocks.asia, auction.asia, wine.asia, beer.asia, girls.asia, etc, totaling several millions dollars or so in retail value. See http://www.dotasia-complot.org/cat28.html for the story. While Mr. Chung saw it fit to move the auctions to another provider, yet he did nothing to invalidate the auctions that ended up in the hands of the auctioneer, and even issued a statement defending this practice. DotAsia must have lost $3M or so because of this.
It is my belief that Mr. Chung colluded with Pool.com and profited from this transaction, and that he is now colluding with ASWPC to corral premium .SPA domains, as compensation for his abandonment of our shares in .SPA.
IN fact, after the filing of the injunction (stopping ASWPC from launching .SPA) Mr. Chung has done nothing to restore DotAsia and DotPH’s equity in .SPA, and has even actively interfered in the issuing of said injunction. It is my hope that the board of DotAsia investigate his activities thoroughly.
Domain Name Wire is a trade publication for the domain name industry covering topics relevant to domain investors, brand owners, policy makers, domain registrars and registries, and more. Founded in 2005, Domain Name Wire has been cited by Wall Street Journal, New York Times, NPR, and Washington PostRead More About DNW
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