03a0117p.06

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
0 & &25325$7,21D
0LFKLJDQ&RUSRUDWLRQGED
&RQQHOO\&RPSDQ\
3ODLQWLII$SSHOOHH
Y
(5:,1 %(+5 *0%+
&203$1< .*D)RUHLJQ
&RUSRUDWLRQ
'HIHQGDQW$SSHOODQW
+(,1= (7=(/HWDO
'HIHQGDQWV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
1R²3DXO9*DGROD'LVWULFW-XGJH
$UJXHG-XQH
'HFLGHGDQG)LOHG$SULO
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
7KH +RQRUDEOH $OJHQRQ / 0DUEOH\ 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
%HIRUH.(,7+DQG'$8*+75(<&LUFXLW-XGJHV
0$5%/(<'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' /DUU\ - 6D\ORU 0,//(5 &$1),(/'
3$''2&. 6721( 'HWURLW 0LFKLJDQ IRU $SSHOODQW
5XVV(%ROW]5866(%2/7=3&5RFKHVWHU0LFKLJDQ
IRU $SSHOOHH 21 %5,() /DUU\ - 6D\ORU 0,//(5
&$1),(/'3$''2&. 6721('HWURLW0LFKLJDQIRU
$SSHOODQW5XVV(%ROW]5866(%2/7=3&5RFKHVWHU
0LFKLJDQ -RKQ & /RXLVHOO 7,00,6 ,10$1 'HWURLW
0LFKLJDQIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
3(5&85,$07KLVFDVHLVEHIRUHXVRQDSSHDOIRUWKH
WKLUGWLPHVLQFHDQLQWHUQDWLRQDODUELWUDWRUUHQGHUHGDQDZDUG
LQIDYRURIWKHSODLQWLII0 &&RUSRUDWLRQ7KDWDZDUGZDV
FRQILUPHGE\WKHGLVWULFWFRXUWDQGMXGJPHQWZDVHQWHUHG
7KH LQVWDQW DSSHDO DULVHV IURP D GLVSXWH UHJDUGLQJ
HQIRUFHPHQW RI D VSHFLILF SRUWLRQ RI WKH DZDUG 7KH
GHIHQGDQW (UZLQ %HKU *PE+ &R .* LQWHUSUHWV WKH
DZDUGRQHZD\DQGWKHSODLQWLIILQWHUSUHWVLWDQRWKHU7KH
GLVWULFWFRXUWLQLWLDOO\KDGIRXQGWKHDZDUGWREHXQDPELJXRXV
EXWDIWHUDWWHPSWLQJWRGHWHUPLQHWKHSUHFLVHDPRXQWRZHG
XQGHUWKHDZDUGKHOGWKDWWKHDZDUGZDV³XQFOHDUDVWRLWV
DSSOLFDWLRQ´DQGHQWHUHGDQRUGHURIUHPDQGWRWKHRULJLQDO
DUELWUDWRUWRFOHDUXSWKHSUREOHP%HKUDSSHDOVIURPWKLV
RUGHU DUJXLQJ WKDW UHPDQG LV LQDSSURSULDWH DQG WKDW LW KDV
VDWLVILHGWKHDZDUG,QUHVSRQVH0 &FRQWHQGVWKDWWKH

-- 1 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

GLVWULFWFRXUW¶VRUGHURIUHPDQGLVQRWD³ILQDORUGHU´DQGWKDW
WKLVFRXUWWKHUHIRUHKDVQRMXULVGLFWLRQRYHU%HKU¶VDSSHDO,Q
DGGLWLRQ0 &DUJXHVWKDWUHPDQGLVDSSURSULDWH
)RUWKHUHDVRQVVHWRXWEHORZZHFRQFOXGHWKDWZHKDYH
MXULVGLFWLRQ RYHU %HKU¶V DSSHDO EXW WKDW ZH DUH XQDEOH WR
UHYLHZWKHRUGHURIUHPDQGRQLWVPHULWVEHFDXVHWKHGLVWULFW
FRXUWIDLOHGWRLGHQWLI\LQZKDWUHVSHFW V WKHDUELWUDWLRQDZDUG
ZDV DPELJXRXV DQG LQ QHHG RI FODULILFDWLRQ :LWKRXW WKLV
JXLGDQFHZHFDQQRWGHWHUPLQHZKHWKHUUHPDQGLVSURSHUDQG
PRUHRYHUWKHDUELWUDWRUZRXOGEHOHIWWRVSHFXODWHDERXWKRZ
WRLQWHUSUHWWKHDZDUG+HQFHZHILQGLWQHFHVVDU\WRUHPDQG
WKLVFDVHWRWKHGLVWULFWFRXUWIRUIXUWKHUFODULILFDWLRQ
)$&78$/$1'352&('85$/%$&.*5281'
7KHSURFHGXUDOKLVWRU\RIWKHFDVHWKURXJKLWVODVWWULSWR
WKLVFRXUWLVGHWDLOHGLQ0 &&RUSY(UZLQ%HKU*PE+
&R.*)G WK&LU %HKU,,
0 & &RUSRUDWLRQ D 0LFKLJDQ &RUSRUDWLRQ GRLQJ
EXVLQHVV DV WKH &RQQHOO\ &RPSDQ\ HQWHUHG LQWR D
FRQWUDFWRQ0DUFKZLWK%HKUD*HUPDQOLPLWHG
OLDELOLW\ FRUSRUDWLRQ $FFRUGLQJ WR WKH WHUPV RI WKH
SDUWLHV¶DJUHHPHQW0 &ZDVWRVHUYHDVWKHH[FOXVLYH
VDOHVDJHQWIRU%HKULQWKH8QLWHG6WDWHVDQG&DQDGDIRU
DSHULRGRIDWOHDVWILYH\HDUVIRUWKHVDOHRIZRRGLQWHULRU
SDQHOVIRUOX[XU\DXWRPRELOHV7KHFRQWUDFWVSHFLILHG
WKDW WKH ³DJUHHPHQW VKDOO EH LQWHUSUHWHG ZLWK DQG
JRYHUQHGE\WKHODZVRIWKH6WDWHRI0LFKLJDQ´DQGWKDW
³>D@OO GLVSXWHV DULVLQJ LQ FRQQHFWLRQ ZLWK WKH SUHVHQW
FRQWUDFWVKDOOEHILQDOO\VHWWOHGXQGHUWKH5XOHVRIWKH
&RXUW RI $UELWUDWLRQ RI WKH ,QWHUQDWLRQDO &KDPEHU RI
&RPPHUFH E\ RQH RU PRUH DUELWUDWRUV DSSRLQWHG LQ
DFFRUGDQFHZLWKWKHVDLG5XOHV´
,Q%HKULQDFFRUGDQFHZLWKWKHSURYLVLRQVRIWKH
FRQWUDFWWHUPLQDWHGWKHSDUWLHV¶DJUHHPHQW+RZHYHU
ZKHQSXUVXDQWWRFRQWUDFW%HKUIDLOHGWRIRUZDUGWR0
&WKHFRPPLVVLRQVHDUQHGIRUVRPHRIWKHVDOHVDQG
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
FOLHQW GHYHORSPHQW ZRUN LW KDG SHUIRUPHG 0 &
EURXJKWVXLWLQWKHIHGHUDOGLVWULFWFRXUW3XUVXDQWWRWKH
SDUWLHV¶DJUHHPHQWWKHGLVWULFWFRXUWVWD\HGDQ\MXGLFLDO
SURFHHGLQJVDQGRUGHUHGWKHSDUWLHVWRVXEPLWWKHGLVSXWH
WRDUELWUDWLRQ
)ROORZLQJWKHLVVXDQFHRIWKH$UELWUDWLRQ$ZDUG0 &
VRXJKWFRQILUPDWLRQRIWKHDZDUGLQWKHIHGHUDOGLVWULFW
FRXUWSXUVXDQWWR86&†DQGLQDFFRUGDQFHZLWK
WKHSURYLVLRQVRIWKH&RQYHQWLRQRQWKH5HFRJQLWLRQDQG
(QIRUFHPHQW RI )RUHLJQ $UELWUDO $ZDUGV RWKHUZLVH
NQRZQ DV WKH 1HZ <RUN &RQYHQWLRQ 6HH 86&
†2Q$XJXVWWKHGLVWULFWFRXUWDGRSWHGWKH
UHFRPPHQGDWLRQRIWKHPDJLVWUDWHMXGJHDQGFRQILUPHG
DQGHQWHUHGMXGJPHQWRQDZDUGVRQHWKURXJKDQGHLJKW
WKURXJKWHQ2Q0DUFKWKHGLVWULFWFRXUWRQFH
DJDLQ DGRSWHG WKH PDJLVWUDWH MXGJH¶V UHFRPPHQGDWLRQ
DQGFRQILUPHGDQGHQWHUHGMXGJPHQWRQDZDUGVVHYHQ
DQGHOHYHQ
,Q%HKU,ZHDIILUPHGWKHMXGJPHQWRIWKHGLVWULFWFRXUW
LQFRQILUPLQJWKHDUELWUDODZDUG+RZHYHUZKLOH%HKU,
ZDV SHQGLQJ EHIRUH WKLV &RXUW 0 & PRYHG LQ WKH
GLVWULFWFRXUWWRHQIRUFHYDULRXVDUELWUDODZDUGVLQFOXGLQJ
DZDUG HLJKW ZKLFK LV WKH VXEMHFW RI GLVSXWH LQ WKLV
DSSHDO7KHGLVWULFWFRXUWIRXQGWKDW%HKUKDGIDLOHGWR
VSHFLILFDOO\SHUIRUPWKHREOLJDWLRQVLPSRVHGXQGHUDZDUG
HLJKW DQG WKDW DV D UHVXOW %HKU¶V DFWLRQV ³GLUHFWO\
YLRODWH>G@WKHWHUPVRIWKHDUELWUDODZDUGDQGWKLVFRXUW¶V
>GLVWULFW FRXUW@ $XJXVW RUGHU FRQILUPLQJ WKDW
DZDUG´%HKUZDVWKHUHDIWHUKHOGLQFRQWHPSW
6XEVHTXHQWWRWKLVFRXUW¶VMXGJPHQWWRDIILUPLQ%HKU,
%HKU SDLG 0 & LQ VDWLVIDFWLRQ RI
DZDUGVIRXUILYHVHYHQWHQDQGHOHYHQ+RZHYHU%HKU
FRQWLQXHVWRFRQWHVWWKHDPRXQWGXHXQGHUDZDUGHLJKW
$ZDUGHLJKWGRHVQRWUHTXLUHWKHSD\PHQWRIDVSHFLILF
PRQHWDU\ DPRXQW UDWKHU WKH DZDUG UHTXLUHV %HKU WR
SURYLGH0 &ZLWKGRFXPHQWDWLRQIRUVDOHVRIFHUWDLQ

-- 2 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

SURGXFWVDQGWRSD\FRPPLVVLRQVRQWKHIXWXUHVDOHVRI
WKHVHSURGXFWV7KHFRQWUDFWUHIHUHQFHGLQDZDUGHLJKW
UHTXLUHV %HKU WR SD\ FRPPLVVLRQV RQ ³DOO QHZ RUGHUV
ZKLFK DUH QRW UHQHZDO RU H[WHQVLRQV RUGHUV UHFHLYHG
IURPFXVWRPHUVZLWKLQWKUHH\HDUVIROORZLQJWKHGDWHRI
WHUPLQDWLRQ´
%HKUVRXJKWVWD\RIHQIRUFHPHQWSURFHHGLQJV³EHFDXVH
WKHDPRXQWVRZLQJRQWKDWGLVSXWHGDZDUGKDYHQRWEHHQ
UHGXFHG WR MXGJPHQW´ %HKU FRQWHQGV WKDW WKH SDUWLHV
GLVDJUHHRYHUWKHLQWHUSUHWDWLRQRIWKHZRUG³RUGHU´DQG
WKDWEHFDXVHWKHLVVXHZDVQRWDGGUHVVHGE\WKHDUELWUDWRU
DVWD\LVDSSURSULDWH
7KHGLVWULFWFRXUWLQLWVLQLWLDOGHWHUPLQDWLRQUXOHGWKDWD
VWD\ RI HQIRUFHPHQW SHQGLQJ DUELWUDWLRQ ZDV QRW
ZDUUDQWHG EHFDXVH %HKU KDG QRW UDLVHG D JRRG IDLWK
GLVSXWH WKDW KDG QRW EHHQ SUHYLRXVO\ GHFLGHG LQ
DUELWUDWLRQ +RZHYHU XSRQ %HKU¶V PRWLRQ IRU
UHFRQVLGHUDWLRQWKHGLVWULFWFRXUWGHWHUPLQHGWKDW%HKU
KDG UDLVHG D JRRG IDLWK LVVXH RI ZKDW FRQVWLWXWHV DQ
³RUGHU´XQGHUWKHFRPPLVVLRQFRQWUDFWDQGWKDWWKHSULRU
DUELWUDWLRQDZDUGKDGQRWDGGUHVVHGWKDWLVVXH0 &
DSSHDOVDQGWKLV&RXUWQRZUHYHUVHVWKHGLVWULFWFRXUW¶V
RUGHU
%HKU,,)GDW
%HIRUH UHYHUVLQJ WKH GLVWULFW FRXUW¶V VWD\ RUGHU SHQGLQJ
DUELWUDWLRQ RI WKH PHDQLQJ RI ³RUGHU´ LQ %HKU ,, ZH
FRQVLGHUHGWKHTXHVWLRQRIRXUMXULVGLFWLRQWRKHDUWKHDSSHDO
%HKUWKHDSSHOOHHDUJXHGWKDWWKHFRXUWODFNHGMXULVGLFWLRQWR
UHYLHZ DQ RUGHU VWD\LQJ HQIRUFHPHQW SURFHHGLQJV DQG
FRPSHOOLQJDUELWUDWLRQ:HGLVDJUHHGDQGZHKHOGWKDW³>D@V
D PDWWHU RI IRUP WKH μVWD\ RI SURFHHGLQJV¶ DSSHDUV
LQWHUORFXWRU\EXWLQHVVHQFHLWLVDILQDORUGHUVWD\LQJWKH
HQIRUFHPHQWRIDMXGJPHQWWKDWKDVDOUHDG\EHHQDUELWUDWHG
FRQILUPHGMXGJPHQWHQWHUHGDQGDIILUPHGE\WKLVFRXUW´,G
DW HPSKDVLVLQRULJLQDO
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
$IWHU FRQFOXGLQJ WKDW ZH KDG MXULVGLFWLRQ ZH WKHQ
FRQVLGHUHG0 &¶VFKDOOHQJHWRWKHGLVWULFWFRXUW¶VVWD\RUGHU
UHJDUGLQJZKDWFRQVWLWXWHGDQ³RUGHU´ZLWKLQWKHPHDQLQJRI
WKH GXO\ UHQGHUHG ± DQG DOUHDG\ FRQILUPHG ± DUELWUDWLRQ
DZDUG$OWKRXJKDFNQRZOHGJLQJWKDW³>D@QDPELJXRXVDZDUG
PD\ QRW EH HQIRUFHG EXW VKRXOG EH UHPDQGHG WR WKH
DUELWUDWRU´LGDWDPDMRULW\RIWKHSDQHOFRQFOXGHGWKDW
³WKHDZDUGLVQRWDPELJXRXVDQGWKHGLVWULFWFRXUW¶VUHPDQG
WRDUELWUDWLRQZDVQRWSURSHU´LGDW6SHFLILFDOO\WKH
PDMRULW\KHOG
7KHDUELWUDWRU¶VRSLQLRQFOHDUO\GHWHUPLQHGWKDWSXUVXDQW
WRWKHSDUWLHV¶DJUHHPHQWWKHSD\PHQWRIFRPPLVVLRQVLV
WLHGWRWKHUHFHLSWRI³DOOQHZRUGHUVUHFHLYHGIURP
FXVWRPHUV ZLWKLQ WKUHH \HDUV IROORZLQJ WKH GDWH RI
WHUPLQDWLRQEXWZKLFKZHUHDFWLYHO\VROLFLWHGE\>0
&@ IURP WKH &XVWRPHUV SULRU WR WKH GDWH RI VDLG
WHUPLQDWLRQ´ (PSKDVLVDGGHG $VUHDGWKHUHLVDWZR
IROGUHTXLUHPHQWLQWKHDUELWUDWRU¶VDZDUG WKH³RUGHU´
PXVW EH UHFHLYHG SULRU WR WKH WKUHH \HDUV IROORZLQJ
WHUPLQDWLRQRIWKHFRQWUDFWDQG VXFKDQRUGHUPXVW
KDYH PDWHULDOL]HG DV D UHVXOW RI WKH ³DFWLYH > @
VROLFLW>DWLRQ@´E\0 &SULRUWRWKHWHUPLQDWLRQRIWKH
FRQWUDFW
7KHRQO\μμRUGHU´WKHDUELWUDWRUFRXOGKDYHUHIHUUHGWR
ZDV WKH IRUP HQWLWOHG ³3XUFKDVH 2UGHU´ QRW D IRUP
HQWLWOHG³0DWHULDO5HOHDVH´
,GDW,QUHVSRQVHWR%HKU¶VDUJXPHQWWKDWLWZDVWKH
FXVWRPHU¶VSD\PHQWRIPRQH\WKDWWULJJHUHG0 &¶VULJKWWR
FRPPLVVLRQDQGQRWWKHFXVWRPHU¶VRUGHUWKHFRXUWQRWHG
WKDW³WKHDUELWUDWRU¶VDZDUGFOHDUO\LQGLFDWHVWKDWWKHSD\PHQW
RIFRPPLVVLRQVLVQRWVXEMHFWWRWKHWKUHH\HDUOLPLWDWLRQ´
,GDW,QDGGLWLRQ±LQODQJXDJHWKDWZRXOGHPHUJHDV
SDUWRIWKHGLVSXWHWKDWKDVEHFRPH%HKU,,,±WKHFRXUWVWDWHG
>(@YHQLIZHDVVXPH%HKU¶VSURSRVLWLRQWREHWUXHLWZDV
VWLOOWKHDFWLYHVROLFLWDWLRQRI0 &SULRUWRFRQWUDFW

-- 3 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

WHUPLQDWLRQ ZKLFK UHVXOWHG LQ WKH UHFHLSW RI 3XUFKDVH
2UGHUVGXULQJWKHWKUHH\HDUWLPHIUDPHDQGLWZDVWKH
UHOHDVHRIWKRVH³QHZ>SXUFKDVH@RUGHUV´ZKLFKWULJJHUHG
WKH UHFHLSW RI PRQH\ IURP WKH FXVWRPHU DQG WKH
³FRPPLVVLRQSD\PHQW>V@GXULQJμOLIHRIWKHSDUW¶´
,G2QWKLVEDVLVDPDMRULW\RIWKHSDQHOUHYHUVHGWKHGLVWULFW
FRXUW
$ WKLUG PHPEHU RI WKH %HKU , SDQHO GLVVHQWHG IURP WKH
ODWWHU KROGLQJ FRQFOXGLQJ WKDW WKH PHDQLQJ RI WKH WHUP
³RUGHU´VKRXOGEHUHVROYHGE\WKHDUELWUDWRUDQGQRWWKHFRXUW
,FDQQRWDJUHHZLWKWKHPDMRULW\WKDWWKHDUELWUDWLRQDZDUG
LV ³FOHDU´ , FRQFOXGH WKDW %HKU KDV UDLVHG DQ DUELWUDO
LVVXHWKDWZDVQRWDGGUHVVHGLQWKHSULRUDUELWUDWLRQDQG
WKHUHIRUH,ZRXOGDIILUPWKHGLVWULFWFRXUW¶VVWD\SHQGLQJ
DUELWUDWLRQRIWKHQHZLVVXH

%HFDXVHWKHDZDUGGLGQRWFRQVLGHUZKDWFRQVWLWXWHVDQ
³RUGHU´ XQGHU WKH FRQWUDFW LQ RUGHU WR GHWHUPLQH WKH
DPRXQWRIFRPPLVVLRQVGXHWKHFRXUWPXVWJRRXWVLGH
WKHDZDUGWRLQWHUSUHWLWZKLFKLWFDQQRWGR&OHYHODQG
3DSHU+DQGOHUVY(:6FULSSV&R)G
WK&LU ,QHQIRUFHPHQWDFWLRQV³FRXUWVPD\
QRW>JR@EH\RQGDQDZDUGWRGHFLGHTXHVWLRQVWKDWWKH
DUELWUDWRUGLGQRWGHFLGH´ 7KDWLVLQRUGHUWRUHVROYH
WKLVQHZGLVSXWHWKHFRXUWZRXOGKDYHWRFRQVWUXHWKH
FRQWUDFWZKLFKLVSUHFLVHO\ZKDWWKLVFRXUWPXVWQRWGR
EHFDXVHWKHSDUWLHVDJUHHGWKDWDQ\GLVSXWHDULVLQJXQGHU
WKHFRQWUDFWLVVXEMHFWWRDUELWUDWLRQ7KHUHIRUH,EHOLHYH
WKDW WKH (LJKWK $ZDUG LV XQHQIRUFHDEOH DQG WKDW WKH
GLVSXWHRYHUWKHPHDQLQJRI³RUGHUV´LVDQHZGLVSXWH
VXEMHFWWRDUELWUDWLRQ
, DP OHG WR WKLV FRQFOXVLRQ E\ WKH 6XSUHPH &RXUW¶V
SURQRXQFHPHQWWKDW³DQ\GRXEWVFRQFHUQLQJWKHVFRSHRI
DUELWUDEOH LVVXHV VKRXOG EH UHVROYHG LQ IDYRU RI
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
DUELWUDWLRQ´0RVHV+&RQH0HPRULDO+RVSY0HUFXU\
&RQVWU&R866&W
/(GG 7KLV ³KHDOWK\ UHJDUG IRU WKH
IHGHUDOSROLF\IDYRULQJDUELWUDWLRQ´FRPELQHGZLWKWKH
FRXUW¶V ODFN RI MXULVGLFWLRQ XQGHU WKH 1HZ <RUN
&RQYHQWLRQWRPRGLI\DQLQWHUQDWLRQDODUELWUDODZDUG
86&†UHTXLUHVWKDWWKHPHDQLQJRI³RUGHUV´DV
XVHG LQ WKH (LJKWK $ZDUG EH DUELWUDWHG LQVWHDG RI
MXGLFLDOO\GHWHUPLQHG,GDW6&WDW
%HKU ,, )G DW 'DXJKWUH\ - GLVVHQWLQJ
HPSKDVLVLQRULJLQDO
7KH3URFHGXUDO3DWKWR%HKU,,,
8QIRUWXQDWHO\WKHPDMRULW\¶VUXOLQJLQ%HKU,,GLGQRWEULQJ
WRWHUPLQDWLRQWKHVHHPLQJO\HQGOHVVOLWLJDWLRQLQWKLVFDVH
7KH SURFHGXUDO SRVWXUH DQG LVVXHV FXUUHQWO\ EHIRUH XV
FRQWLQXHWRUHIOHFWWKHSDUWLHV¶GLVSXWHRYHUWKHDPRXQWGXH
LIDQ\IURP%HKUWR0 &XQGHUWKHWHUPVRIWKH(LJKWK
$ZDUGXQGHUWKHRULJLQDODUELWUDWLRQDZDUG
)ROORZLQJWKHGHFLVLRQLQ%HKU,,GHIHQGDQW%HKUPRYHG
IRUSDUWLDOVDWLVIDFWLRQRIWKHMXGJPHQWIRUDOODPRXQWVGXH
XQGHUWKH(LJKWK$ZDUGRQWKH.6SHFLDOSDUWV,QWKH
PRWLRQ%HKUUHSUHVHQWHGWKDWLWSDLG0 &LQ
FRPPLVVLRQV DQG SRVWMXGJPHQW LQWHUHVW ³RQ DOO SXUFKDVH
RUGHUVIRUμ.6SHFLDO¶SDUWVIRUWKHPRGHO\HDU´ZKLFK
LWDUJXHG³IXOO\VDWLVILHVDOOVXPVGXHIRUμ.6SHFLDO¶
SDUWV XQGHU WKH (LJKWK $ZDUG DV LQWHUSUHWHG E\ WKH 6L[WK
&LUFXLW´7KHGLVWULFWFRXUWGHQLHGWKHPRWLRQ6HH0 &
&RUSY(UZLQ%HKU*PE+ &R)6XSSG
('0LFK $IWHU0 &PRYHGIRUFODULILFDWLRQRI
ZKDW %HKU RZHG RQ WKH (LJKWK $ZDUG WKH GLVWULFW FRXUW
DPHQGHGLWVSULRURSLQLRQWRLQFOXGHWKHIROORZLQJODQJXDJH
$FFRUGLQJO\WKH6L[WK&LUFXLW¶VKROGLQJWKDW0 &LV
HQWLWOHGWRFRPPLVVLRQVIRUWKH³OLIHRIWKHSDUW´PHDQV
WKDW0 &LVHQWLWOHGWRFRPPLVVLRQVRQDQ\PDWHULDO
UHOHDVHIRUHDFK³.6SHFLDO´SDUWRUGHUSXUVXDQWWR

-- 4 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

DQ\3XUFKDVH2UGHUZKLFKZDVLVVXHGE\*HQHUDO0RWRUV
&RUSRUDWLRQWR%HKUSULRUWR0DUFK
2UGHU*UDQWLQJ3ODLQWLII¶V0RWLRQIRU5HFRQVLGHUDWLRQ1R
)HE
7KH GLVWULFW FRXUW¶V FODULILFDWLRQ RI WKH 6L[WK &LUFXLW¶V
LQWHUSUHWDWLRQRI%HKU¶VREOLJDWLRQXQGHUWKH(LJKWK$ZDUG
GLG QRW HQG WKH PDWWHU KRZHYHU EHFDXVH %HKU ILOHG \HW
DQRWKHU PRWLRQ IRU SDUWLDO VDWLVIDFWLRQ RI MXGJPHQW
FRQWHQGLQJ WKDW LW KDG DFWXDOO\ RYHUSDLG 0 & E\ RYHU
$FFRUGLQJWR%HKULWGLGQRWRZHFRPPLVVLRQVWR
0 &RQFHUWDLQOLQHVRISDUWV VSHFLILFDOO\WKH(.
SDUWVDQG.SDUWV EHFDXVHWKH\ZHUHRUGHUHGE\*HQHUDO
0RWRUV PRUH WKDQ WKUHH \HDUV DIWHU WKH WHUPLQDWLRQ RI WKH
FRQWUDFWEHWZHHQ0 &DQG%HKUDQGZHUHQRWWKHUHIRUH
³DFWLYHO\VROLFLWHG´E\0 &,QUHVSRQVH0 &FLWHGD
UHIHUHQFHLQ%HKU,,WR%HKU¶VREOLJDWLRQWRSD\FRPPLVVLRQV
GXULQJWKH³OLIHRIWKHSDUW´DQGDUJXHGWKDW³FRPPLVVLRQV
ZHUHSD\DEOHIRUWKHOLIHRIWKHSDUWSURJUDPZKHQHYHUWKRVH
RUGHUVZHUHUHQHZHGRUH[WHQGHG´0 &DUJXHGWKDWWKH
(.SDUWVDQG.SDUWVZHUHHVVHQWLDOO\WKHVDPHDV
WKRVHSDUWVIRUZKLFK0 &DFWLYHO\VROLFLWHGRUGHUVDQGWKDW
DVLPSOHQDPHFKDQJHGLGQRWMXVWLI\GHSULYLQJ0 &RID
FRPPLVVLRQ
5HJDUGOHVVRIZKHWKHU%HKUDQG*0FKRVHWRLGHQWLI\
SDUWVZLWKD\HDUO\ODEHOHJ³.6SHFLDO´RU³
(.´DOOVXFKSDUWVZHUHHLWKHUUHQHZDOVRUH[WHQVLRQVRI
ROGRUGHUVQHZRUGHUVRUUHQHZDOVRUH[WHQVLRQVRIQHZ
RUGHUV$GGLQJD³\HDU´WDJWRDSDUWSURJUDPQDPH
DGGLQJ ³ WR ³. 6SHFLDO´ GRHV QRW PDNH WKH
SURJUDPDQ\GLIIHUHQW,WGRHVQRWPDWWHUZKDW%HKUDQG
*HQHUDO0RWRUVIRUWKHLURZQUHDVRQVFKRRVHWRFDOOWKH
SDUWVVROG
7KHGLVWULFWFRXUWUHIHUUHG%HKU¶VPRWLRQWRDPDJLVWUDWH
MXGJHZKRUHMHFWHG0 &¶VDUJXPHQWDQGUXOHGLQIDYRURI
%HKU
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
>0 &¶V@ OLIHRIWKHSDUW WKHRU\ EOXUV WKH GLVWLQFWLRQ
EHWZHHQSDUDJUDSKRIWKH$JUHHPHQWZKLFKUHIHUVWR
H[WHQVLRQDQGUHQHZDORUGHUV³IRUWKHVDPHLQGLYLGXDO
LWHPV´ZLWKQRWLPHOLPLWDWLRQDQG3DUDJUDSKZKLFK
UHIHUVWR³QHZRUGHUVUHFHLYHGZLWKLQWKUHH \HDUV´
RIWHUPLQDWLRQ,WZRXOGDOVRUHQGHUWKH\HDUODQJXDJH
PHDQLQJOHVV
7KXV UHJDUGOHVV RI ZKHWKHU WKH (. RU .
6SHFLDOSDUWVZHUH³DFWLYHO\VROLFLWHG¶E\3ODLQWLIIEHIRUH
WHUPLQDWLRQLI'HIHQGDQWKDVSDLGFRPPLVVLRQVRQDOO
SDUWVZKLFKZHUHRUGHUHGEHIRUH0DUFKLWKDV
IXOILOOHGLWVREOLJDWLRQXQGHUWKH(LJKWK$ZDUG
0DJLVWUDWH -XGJH¶V 5HSRUW DQG 5HFRPPHQGDWLRQ 1R
)HE)ROORZLQJ0 &¶VREMHFWLRQVWRWKH
PDJLVWUDWHMXGJH¶VUHSRUWDQGUHFRPPHQGDWLRQWKHGLVWULFW
FRXUWDGRSWHGLWLQSDUW1RWLQJWKDWLWKDGEHHQ³LQVWUXFWHG´
E\WKH6L[WK&LUFXLWLQ%HKU,,WR³HQIRUFHWKHDZDUGUDWKHU
WKDQUHPDQGLWWRWKHDUELWUDWRULIWKHRSLQLRQDQGDZDUGUHDG
WRJHWKHU DUH QRW DPELJXRXV´ WKH GLVWULFW FRXUW H[SUHVVO\
DJUHHGZLWKWKHPDJLVWUDWHMXGJHWKDWWKHRSLQLRQDQGDZDUG
ZHUHQRWDPELJXRXVVWDWLQJ
7KLV &RXUW DJUHHV ZLWK DQG DFFHSWV WKH 0DJLVWUDWH
-XGJH¶VUHFRPPHQGDWLRQWKDW³WKHRQO\FRPPLVVLRQWR
ZKLFK 0 & LV HQWLWOHG DUH WKRVH RQ SDUWV RUGHUHG
WKURXJK EODQNHW 3XUFKDVH 2UGHUV ZLWKLQ WKUHH \HDUV
DIWHU WKH WHUPLQDWLRQ´ 7KH DUELWUDWRU¶V DZDUG
FOHDUO\ DSSOLHV WR RQO\ WKRVH SDUWV VSHFLILFDOO\ OLVWHG
XQGHU ³ 0RGHO <HDU %XVLQHVV´ ³ &DGLOODF
%XVLQHVV´ DQG ³ &DGLOODF μ.¶ &DU 6HULHV´ LQ WKH
DUELWUDWRU¶VDZDUG7KHODQJXDJHWKDW³LWLVLPPDWHULDO
WKDWWKHUHVKRXOGKDYHEHHQGHVLJQFKDQJHVLQWKHSDUWV
FRQFHUQHGDIWHUWKHDSSOLFDWLRQRIWKH>VDOHV@HIIRUWV>RI
WKH $JHQW@´ GRHV QRW H[SDQG WKH VFRSH RI ³WKH SDUWV
FRQFHUQHG´

-- 5 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

6LPLODUO\ WKH ³OLIH RI WKH SDUW´ ODQJXDJH GRHV QRW
EURDGHQ WKH VFRSH RI WKH SDUWV FRQFHUQHG DV 3ODLQWLII
FRQWHQGV
2UGHU$FFHSWLQJLQ3DUW0DJLVWUDWH-XGJH&DUOVRQ¶V5HSRUW
DQG 5HFRPPHQGDWLRQ 1R 0DUFK
FLWDWLRQVRPLWWHG
$OWKRXJK WKH GLVWULFW FRXUW ³DFFHSW>HG@ WKH 0DJLVWUDWH
-XGJH¶V FRQVWUXFWLRQ RI WKH DZDUG´ EHFDXVH 0 &
³YLJRURXVO\GLVSXWH>G@´WKHVXPVUHSUHVHQWHGE\%HKUWRKDYH
EHHQ SDLG WR GDWH WKH FRXUW ³UHPDLQ>HG@ XQFHUWDLQ RI WKH
DPRXQWRZHG´$FFRUGLQJO\WKHGLVWULFWMXGJHRUGHUHGWKH
SDUWLHV DQG WKH UHFHLYHU ³WR VXEPLW EULHIV DQG H[KLELWV
FDOFXODWLQJDQGH[SODLQLQJWKHDPRXQWVDOOHJHGO\RZHGDQG
WKHDPRXQWVDOOHJHGO\SDLGE\'HIHQGDQWVFRQVLVWHQWZLWKWKH
5HSRUWDQG5HFRPPHQGDWLRQWKLV2UGHUDQGDOOSULRUFRXUW
RUGHUV´7KHUHVXOWLQJVXEPLVVLRQVLQFOXGHEULHIVUHVSRQVHV
DQGUHSOLHVIURPYDULRXVSDUWLHVDWWDFKLQJQXPHURXVH[KLELWV
$IWHU LWV RUGHU UHTXHVWLQJ WKRVH VXEPLVVLRQV WKH VDPH
GLVWULFW FRXUW WKDW KDG HDUOLHU KHOG WKH DZDUG WR EH
XQDPELJXRXVHQWHUHGLWVRUGHUUHPDQGLQJWKHPDWWHUWRWKH
RULJLQDO DUELWUDWRU $IWHU UHFRXQWLQJ WKH UHFHQW SURFHGXUDO
KLVWRU\ RI WKH FDVH WKH GLVWULFW MXGJH H[SUHVVHG
XQGHUVWDQGDEOHH[DVSHUDWLRQ
7KHUHVXOWLQJVXEPLVVLRQVZHUHDPRXQWDLQRISDSHUZRUN
W\SLFDO RI WKH ILOLQJV LQ WKLV FDVH 3ODLQWLII DQG WKH
5HFHLYHU DUJXH WKDW 'HIHQGDQWV RZH LQ H[FHVV RI
PLOOLRQZKLOH'HIHQGDQWVLQVLVWWKDWWKH\RZHQRWKLQJ
XQGHUWKH(LJKW>K@$ZDUG7KLV&RXUWKDVUHYLHZHGWKH
SDUWLHV¶ VXEPLVVLRQV DQG LV XQDEOH WR GHWHUPLQH WKH
SURSHUDPRXQWRZHGE\'HIHQGDQWVLIDQ\7KLV&RXUW
FRQFOXGHV WKDW WKH (LJKWK $ZDUG LV XQFOHDU DV WR LWV
DSSOLFDWLRQDQGWKHLVVXHRIWKHDPRXQWRZHGXQGHUWKH
(LJKWK $UELWUDWLRQ $ZDUG VKRXOG EH UHPDQGHG WR
$UELWUDWRU$QGUHZ:$%HUNHOH\IRUDGHWHUPLQDWLRQRI
WKHSUHFLVHDPRXQWRZHGXQGHUWKDWDZDUG
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R

7KLV&RXUWILQGVWKDWWKH(LJKWK$UELWUDWLRQ$ZDUGGRHV
QRWIXOO\DGMXGLFDWHDQLVVXHWKDWKDGEHHQVXEPLWWHGVR
WKH$UELWUDWRUKDVQRWH[KDXVWHGKLVIXQFWLRQDVWRWKDW
LVVXH 7KHUHIRUH WKLV &RXUW ZLOO UHPDQG WKH (LJKWK
$UELWUDWLRQ$ZDUGIRUFODULILFDWLRQRQWKHDPRXQWVRZHG
XQGHU WKDW DZDUG 5HPDQGLQJ WR WKH DUELWUDWRU XQGHU
WKHVHFLUFXPVWDQFHVVLPSO\ZLOOUHTXLUHKLPWRFRPSOHWH
KLVGXWLHVE\DSSO\LQJKLVUHDVRQLQJWRWKHIDFWVDQGGRHV
QRWUHRSHQWKHPHULWVRIWKHFDVH
2UGHU RI 5HPDQG WR $UELWUDWRU 1R 0DUFK
FLWDWLRQVRPLWWHGHPSKDVLVDGGHG 8QIRUWXQDWHO\
WKHGLVWULFWFRXUWGLGQRWVSHFLI\LQZKDWUHVSHFWWKHDZDUG
ZDV³XQFOHDUDVWRLWVDSSOLFDWLRQ´QRUGLGWKHFRXUWLGHQWLI\
ZKLFK³LVVXH´ RULVVXHV KDGQRWEHHQ³IXOO\DGMXGLFDWH>G@´
',6&866,21
'RHV7KLV&RXUW+DYH$SSHOODWH-XULVGLFWLRQ"
7KH)HGHUDO$UELWUDWLRQ$FWSURYLGHVWKDW³>D@QDSSHDOPD\
EH WDNHQ IURP D ILQDO GHFLVLRQ ZLWK UHVSHFW WR DQ
DUELWUDWLRQWKDWLVVXEMHFWWRWKLVWLWOH´86&† D
,QWKLVFLUFXLWZHKDYHPDGHFOHDUWKDWDQRUGHUGHIHUULQJWR
DUELWUDWLRQ PD\ EH DSSHDODEOH VR ORQJ DV LW LV ILQDO 6HH
$UQROGY$UQROG&RUS3ULQWHG&RPPXQLFDWLRQVIRU%XV
)G WK&LU KROGLQJWKDWDQRUGHU
JUDQWLQJDPRWLRQWRFRPSHODUELWUDWLRQGHQ\LQJDPRWLRQWR
VWD\DQGGLVPLVVLQJWKHSODLQWLII¶VFRPSODLQWZDVILQDODQG
DSSHDODEOH 7KH6XSUHPH&RXUWKDVH[SODLQHGWKHILQDOLW\
WHVWDVIROORZV
6HFWLRQ D SUHVHUYHVLPPHGLDWHDSSHDORIDQ\
³ILQDOGHFLVLRQZLWKUHVSHFWWRDQDUELWUDWLRQ´UHJDUGOHVV
RI ZKHWKHU WKH GHFLVLRQ LV IDYRUDEOH RU KRVWLOH WR
DUELWUDWLRQ$QGWKHWHUP³ILQDOGHFLVLRQ´KDVDZHOO
GHYHORSHGDQGORQJVWDQGLQJPHDQLQJ,WLVDGHFLVLRQ

-- 6 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

WKDW³HQGVWKHOLWLJDWLRQRQWKHPHULWVDQGOHDYHVQRWKLQJ
PRUHIRUWKHFRXUWWRGREXWH[HFXWHWKHMXGJPHQW´
*UHHQ7UHH)LQ&RUS$ODEDPDY5DQGROSK86
FLWDWLRQVRPLWWHG
+HUH ZH DUH SUHVHQWHG ZLWK D SRVWDUELWUDWLRQ SRVW
FRQILUPDWLRQ RUGHU DULVLQJ LQ WKH HQIRUFHPHQW FRQWH[W
UHPDQGLQJDQDUELWUDWLRQDZDUGWRWKHRULJLQDODUELWUDWRUIRU
FODULILFDWLRQ0 &KDVILOHGDPRWLRQWRGLVPLVV%HKU¶V
DSSHDOIURPWKLVRUGHUIRUODFNRIMXULVGLFWLRQ+RZHYHUWKLV
TXHVWLRQVHHPVWRKDYHEHHQVHWWOHGLQ%HKU,,LQZKLFK0
&ILOHGDVLPLODUPRWLRQLQUHVSRQVHWRZKLFKZHKHOGWKDWWKH
GLVWULFWFRXUWKDGHQWHUHGDQDSSHDODEOH³ILQDORUGHUVWD\LQJ
WKH HQIRUFHPHQW RI D MXGJPHQW WKDW KDV DOUHDG\ EHHQ
DUELWUDWHGFRQILUPHGMXGJPHQWHQWHUHGDQGDIILUPHGE\WKLV
FRXUW´ )G DW ,Q FRQFOXGLQJ WKDW WKH GLVWULFW
FRXUW¶VRUGHUZDVILQDOWKHFRXUWGLVWLQJXLVKHGLWIURPVWD\
RUGHUV GHIHUULQJ WR DUELWUDWLRQ WKDW DUH QRW QRUPDOO\
DSSHDODEOH
7KHGLVWLQJXLVKLQJIDFWRULQWKLVFDVHLVWKDWWKHGLVWULFW
FRXUWJUDQWHGDVWD\RIHQIRUFHPHQWSHQGLQJDUELWUDWLRQ
8QOLNH $UQROG ZKHUH WKH PRWLRQ IRU VWD\ SHQGLQJ
DUELWUDWLRQZDVJUDQWHGDWWKHYHU\RQVHWRIWKHILOLQJRI
WKH FRPSODLQW KHUH 0 & ILOHG LWV FRPSODLQW %HKU
VRXJKWDUELWUDWLRQWKHGLVWULFWFRXUWJUDQWHGDPRWLRQIRU
VWD\ SHQGLQJ DUELWUDWLRQ DUELWUDWLRQ ZDV KHOG DZDUGV
ZHUH JUDQWHG LQ IDYRU RI 0 & WKH GLVWULFW >FRXUW@
FRQILUPHGDQGHQWHUHGMXGJPHQWRQWKRVHDZDUGVDQGDOO
WKDW ZDV OHIW WR EH GRQH ZDV IRU WKH GLVWULFW FRXUW WR
³H[HFXWHWKHMXGJPHQW´
7KLVLVQRWDQLQVWDQFHZKHUH³WKHWULDORIWKHDFWLRQ´ZDV
EHLQJVWD\HGXQWLODUELWUDWLRQZDVKHOGUDWKHUDUELWUDWLRQ
ZDVFRPSOHWHGFRQILUPDWLRQZDVJUDQWHGDQGMXGJPHQW
ZDVHQWHUHG6HH86&†,WLVQRWDV%HKUFRQWHQGV
WKDW WKH SDUWLHV ZLOO DUELWUDWH ZKDW FRQVWLWXWHV DQ
>³@RUGHU>´@ DQG XSRQ VXFK D GHWHUPLQDWLRQ E\ WKH
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
DUELWUDWRU WKH SDUWLHV ZLOO VHHN WR ³OLIW WKH VWD\ VHHN
FRQILUPDWLRQRIWKHGHFLVLRQDQGHQIRUFHWKHDZDUG
RQFHLWLVFRQILUPHG´7KHGLVWULFWFRXUWLQLWVRUGHU
WRVWD\HQIRUFHPHQWGLGQRWYDFDWHVHWDVLGHRUPRGLI\LWV
HDUOLHUUXOLQJRIFRQILUPDWLRQDQGMXGJPHQW,QGHHGLW
RQO\VRXJKWWRFODULI\WKHDZDUGIRUWKHOLPLWHGSXUSRVH
RIDVVXULQJDQDFFXUDWHH[HFXWLRQRIWKHMXGJPHQW
,GDW HPSKDVLVLQRULJLQDO 7KXV%HKU,,KROGVWKDW
DSRVWMXGJPHQWRUGHUVWD\LQJHQIRUFHPHQWSHQGLQJUHPDQG
WR WKH DUELWUDWRU IRU FODULILFDWLRQ RI DQ DZDUG LV ILQDO DQG
DSSHDODEOHXQGHU86&† D
,QDGGLWLRQZHKDYHUHFHQWO\DGGUHVVHGWKH%HKU,,KROGLQJ
LQ DQRWKHU DUELWUDWLRQ GHFLVLRQ $7$& &RUS Y $UWKXU
7UHDFKHU¶V,QF)G WK&LU 7KHUHWKH
SODLQWLIIDSSHDOHGIURPWKHGLVWULFWFRXUW¶VRUGHU³μSHUSHWXDOO\
VWD\LQJIXUWKHUSURFHHGLQJVDQGFORVLQJWKHFDVHVXEMHFWWR
UHRSHQLQJ IRU JRRG FDXVH VKRZQ XSRQ ZULWWHQ PRWLRQ E\
HLWKHUSDUW\DIWHUFRPSOHWLRQRIWKHDUELWUDWLRQSURFHVV¶´,G
DW7KHGHIHQGDQWPRYHGWRGLVPLVVWKHDSSHDOIRUODFN
RIMXULVGLFWLRQDUJXLQJWKDWWKHGLVWULFWFRXUW¶VRUGHUVWD\LQJ
WKHSURFHHGLQJVZDVQRWDILQDORUGHU7KHFRXUWLGHQWLILHGWKH
³FHQWUDO´ LVVXH WR EH ³ZKHWKHU WKH RUGHU EHORZ ZDV D
† D μILQDOGHFLVLRQZLWKUHVSHFWWRDQDUELWUDWLRQ¶RUD
† E μLQWHUORFXWRU\ RUGHU JUDQWLQJ D VWD\¶ RI WKH
SURFHHGLQJV LQ GHIHUHQFH WR DUELWUDWLRQ´ ,G DW
$SSO\LQJ$UQROGDQG*UHHQ7UHHWKHFRXUWIRXQGWKDW³WKH
VWD\RUGHULVVXHGZDVLQWHUORFXWRU\UDWKHUWKDQILQDOLQ
QDWXUHDQGWKHUHIRUHWKDWLWLVQRWDSSHDODEOH´,GDW
,Q VR KROGLQJ WKH FRXUW GLVWLQJXLVKHG DQG UHDIILUPHG WKH
KROGLQJ LQ %HKU ,, HPSKDVL]LQJ WKH SRVWDUELWUDWLRQ SRVW
MXGJPHQWHQIRUFHPHQWSRVWXUHRIWKHSULRUFDVH
$7$&DUJXHVWKDWWKLVFLUFXLWKDVDWOHDVWRQFHIRXQGDQ
RUGHU JUDQWLQJ D VWD\ SHQGLQJ DUELWUDWLRQ WR EH D ILQDO
GHFLVLRQ+RZHYHUWKHFLUFXPVWDQFHVZHUHIDUGLIIHUHQW
LQWKDWFDVHDQGLWLVWUXO\WKHH[FHSWLRQWKDWSURYHVWKH
UXOH6HH0 &&RUSY(UZLQ%HKU*PE+ &R

-- 7 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

)G WK&LU 7KHRUGHUJUDQWLQJWKHVWD\LQ
WKDWFDVHZDVDSRVWMXGJPHQWRUGHUDIWHUDUELWUDWLRQZDV
FRPSOHWHGDQGFRQILUPHGDQGDIWHUWKHMXGJPHQWZDV
HQWHUHGDQGDIILUPHGRQDSSHDO2QO\ZKHQDGLVSXWH
DURVHRYHUKRZWRFDOFXODWHRQHSRUWLRQRIWKHMXGJPHQW
GLGWKHGLVWULFWFRXUWHQWHUDVWD\RIHQIRUFHPHQWRIWKH
MXGJPHQW SHQGLQJ IXUWKHU DUELWUDWLRQ RI WKH GLVSXWHG
LVVXH2QDSSHDORIWKDWRUGHUWKLVFRXUWKHOGWKDW³WKH
μVWD\ RI SURFHHGLQJV¶ DSSHDUV LQWHUORFXWRU\ EXW LQ
HVVHQFHLWLV>D@ILQDORUGHUVWD\LQJWKHHQIRUFHPHQWRID
MXGJPHQW´,GDW$UELWUDWLRQKDV\HWWRWDNH
SODFH LQ WKH LQVWDQW FDVH 7KH VWD\ DW LVVXH KHUH LV
DFWXDOO\ LQWHUORFXWRU\ DQG QRW MXVW DSSDUHQWO\ VR 7KH
H[FHSWLRQFDUYHGRXWLQ(UZLQ%HKUIRUDSRVWMXGJPHQW
VWD\FDQQRWEHFRQVWUXHGWRFRYHUWKHVWD\LQWKHLQVWDQW
FDVHDQGWKHODQJXDJHRIWKDWRSLQLRQLWVHOIXQGHUVFRUHV
WKH IDFW WKDW μD VWD\ RI SURFHHGLQJV LV JHQHUDOO\
FRQVLGHUHGLQWHUORFXWRU\¶,GDW
$7$&&RUS)GDW HPSKDVLVLQRULJLQDO
+HQFH WKHUH FDQ EH QR GRXEW WKDW %HKU ,, FRQWUROV WKH
RXWFRPHKHUH7KHRUGHUUHPDQGLQJWKHFDVHWRWKHDUELWUDWRU
PXVW EH FRQVLGHUHG ILQDO DQG 0 &¶V FKDOOHQJH WR WKLV
FRXUW¶V DSSHOODWH MXULVGLFWLRQ PXVW IDLO :H UHDFK WKLV
FRQFOXVLRQ HYHQ DIWHU FRQVLGHULQJ 0 &¶V DWWHPSW WR
GLVWLQJXLVKWKHVLWXDWLRQQRZEHIRUHXVIURPWKDWLQ%HKU,,
RQWKUHHJURXQGV
$FFRUGLQJWR0 &WKHGLVWULFWFRXUWLQ%HKU,,H[SUHVVO\
LVVXHGDVWD\RISURFHHGLQJVZKLOHLQWKHLQVWDQWVFHQDULRWKH
GLVWULFW FRXUW¶V RUGHU RI UHPDQG GLG QRW LQFOXGH ODQJXDJH
UHVSHFWLQJDVWD\5DWKHULWVLPSO\VWDWHVWKDW³WKHLVVXHRI
WKH DPRXQW RZHG XQGHU WKH (LJKWK $UELWUDWLRQ $ZDUG LV
5(0$1'('´WRWKHDUELWUDWRU*LYHQWKHSRVWMXGJPHQW
SRVWXUH RI WKLV FDVH ZH FRQFOXGH WKDW WKLV LV D GLVWLQFWLRQ
ZLWKRXW D GLIIHUHQFH RQH WKDW VLPSO\ GRHV QRW DIIHFW WKH
RXWFRPH7KHSURFHHGLQJVUHPDLQLQJEHIRUHWKHGLVWULFWFRXUW
UHJDUG RQO\ HQIRUFHPHQW RI WKH FRQILUPHG DZDUGV ,Q LWV
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
RUGHU WKH GLVWULFW FRXUW HIIHFWLYHO\ GHWHUPLQHG WKDW
HQIRUFHPHQW RI WKH (LJKWK $ZDUG ZDV QRW SRVVLEOH DEVHQW
FODULILFDWLRQIURPWKHDUELWUDWRU$VVXPLQJWKHDUELWUDWRULV
XOWLPDWHO\SHUPLWWHGWRFODULI\KLVDZDUGWKHRQO\WKLQJOHIWWR
EH GRQH E\ WKH GLVWULFW FRXUW ZLOO EH WR HQIRUFH LWV SULRU
MXGJPHQWFRQILUPLQJWKHDZDUG,WZRXOGDSSHDUWKDWGLVWULFW
FRXUWSURFHHGLQJVDUHHIIHFWLYHO\LIQRWH[SUHVVO\VWD\HG
ZKLFKPDNHVWKLVFDVHQRGLIIHUHQWIURP%HKU,,
6HFRQG0 &FRQWHQGVWKDWWKHUHPDQGLQ%HKU,,FDOOHG
IRU ³D ZKROO\ QHZ DUELWUDWLRQ SURFHHGLQJ´ DQG D ³QHZ
DUELWUDWRU´ ZKHUHDV WKH LQVWDQW UHPDQG UHTXLUHV ³D
FODULILFDWLRQRQO\´E\³WKHVDPHDUELWUDWRU´$VVXPLQJ0
&¶V UHSUHVHQWDWLRQ DERXW WKH UHPDQG LQ %HKU ,, LV FRUUHFW
WKHUHLVDEVROXWHO\QRWKLQJLQ %HKU,, WRVXJJHVWWKDWWKHVH
IDFWRUVGLFWDWHGWKHUHVXOW,Q%HKU,,ZHGLGQRWUHVWDQ\SDUW
RI RXU MXULVGLFWLRQDO KROGLQJ RQ WKH DVVXPSWLRQ WKDW WKH
FRQWHPSODWHGUHPDQGZRXOGVXSSRVHGO\LQYROYHDGLIIHUHQW
DUELWUDWRU0RUHLPSRUWDQWO\WKHWUHDWPHQWRIWKHVFRSHRIWKH
UHPDQGLQ%HKU,,LVUHPDUNDEO\VLPLODUWRWKDWRIWKHUHPDQG
DW LVVXH QRZ EHIRUH XV ZKLFK ³UHPDQG>HG@ WKH (LJKWK
$UELWUDWLRQ $ZDUG IRU FODULILFDWLRQ RQ WKH DPRXQWV RZHG
XQGHU WKDW DZDUG´ ,Q %HKU ,, ZH FKDUDFWHUL]HG WKH RUGHU
EHIRUHXVDVIROORZV
,WLVQRWDV%HKUFRQWHQGVWKDWWKHSDUWLHVZLOODUELWUDWH
ZKDW FRQVWLWXWHV DQ >³@RUGHU>´@ DQG XSRQ VXFK D
GHWHUPLQDWLRQE\WKHDUELWUDWRUWKHSDUWLHVZLOOVHHNWR
³OLIWWKHVWD\VHHNFRQILUPDWLRQRIWKHGHFLVLRQDQG
HQIRUFH WKH DZDUG RQFH LW LV FRQILUPHG´ 7KH GLVWULFW
FRXUWRQO\VRXJKWWRFODULI\WKHDZDUGIRUWKHOLPLWHG
SXUSRVH RI DVVXULQJ DQ DFFXUDWH H[HFXWLRQ RI WKH
MXGJPHQW
)GDW HPSKDVLVDGGHG $FFRUGLQJO\0 &¶V
DWWHPSWWRGLVWLQJXLVK%HKU,,EDVHGXSRQWKHVFRSHRIWKH
UHPDQGDWLVVXHWKHUHLVXQSHUVXDVLYH

-- 8 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

)LQDOO\0 &VXJJHVWVWKDWWKHGLVWULFWFRXUW¶VPRVWUHFHQW
UHPDQGRUGHULVQRWDSSHDODEOHEHFDXVHWKHUHLVPXFK³OHIWWR
EH GRQH´ DW WKH GLVWULFW FRXUW OHYHO EH\RQG WKH UHPDQG
$FFRUGLQJWR0 &UHPDQGWRWKHDUELWUDWRU³ZRXOGOHDG
LQH[RUDEO\WRLVVXDQFHRIDVXSSOHPHQWDODZDUGZKLFKWKHQ
FRXOGOHDGWRIXUWKHUFRQILUPDWLRQRUYDFDWLRQLQWKHGLVWULFW
FRXUWDQGLIQHFHVVDU\DQDSSHDOWRWKLV&RXUWWKDWWR>VLF@
ILQDOO\UHVROYHDOOFKDOOHQJHVWRGLVWULFWFRXUWRUGHUV´%XW
WKLVDUJXPHQWORJLFDOO\DSSOLHGZLWKDWOHDVWWKHVDPHIRUFHWR
WKH UHPDQG LQ %HKU ,, DQG UHO\LQJ RQ WKH SRVWMXGJPHQW
SRVWXUHRIWKHPDWWHUZHQHYHUWKHOHVVKHOGWKHUHPDQGRUGHU
WREHILQDO,QGHHGWKLVDUJXPHQWPXVWKDYHDSSOLHGZLWK
PRUH IRUFH LQ %HKU ,, EHFDXVH DV 0 & KDV DUJXHG
HOVHZKHUHWKDWUHPDQGHYLGHQWO\FRQWHPSODWHG³DZKROO\QHZ
DUELWUDWLRQSURFHHGLQJ´DQGD³QHZDUELWUDWRU´$WERWWRP0
&¶VDUJXPHQWWKDWWKHLQVWDQWUHPDQGZLOOLQHYLWDEO\OHDGWR
DQHZDZDUGUHTXLULQJIXUWKHUFRQILUPDWLRQLVXQVXSSRUWHG
DQG LQFRQVLVWHQW ZLWK WKH ODQJXDJH RI WKH GLVWULFW FRXUW¶V
UHPDQGRUGHU
'LG7KH'LVWULFW&RXUW(UU%\(QWHULQJ,WV2UGHU2I
5HPDQG"
7KHEXONRI%HKU¶VEULHILVVSHQWPDNLQJDFRPSOH[IDFW
LQWHQVLYHDUJXPHQWWKDWLWKDVSDLG0 &DOOFRPPLVVLRQV
GXHXQGHUWKH(LJKWK$ZDUG$FFRUGLQJWR%HKUWKHGLVWULFW
FRXUW¶VSULQFLSDOHUURUZDVLQIDLOLQJWRJUDQW%HKU¶VPRWLRQ
IRU SDUWLDO VDWLVIDFWLRQ RI WKH MXGJPHQW 7KLV DUJXPHQW LV
SUHPDWXUHDQGLQRXUMXGJPHQWPLVVHVWKHSRLQW7KHGLVWULFW
FRXUW GLG QRW H[SUHVVO\ GHQ\ %HKU¶V PRWLRQ IRU SDUWLDO
VDWLVIDFWLRQRIWKHMXGJPHQW,QVWHDGLWLVDSSDUHQWWKDWWKH
FRXUWZDVLQ WKHSURFHVVRIGHWHUPLQLQJZKHWKHU%HKUKDG
VDWLVILHGWKHMXGJPHQWZKHQLWHQFRXQWHUHGDQDPELJXLW\LQ
WKH DZDUG QHFHVVLWDWLQJ D UHPDQG WR WKH DUELWUDWRU 7KDW
EULQJVXVWRWKHPRVWSUHVVLQJTXHVWLRQUDLVHGE\WKLVDSSHDO
ZKHWKHUWKDWUHPDQGZDVSURSHU%HKUDUJXHVWKDWUHPDQGLV
LQDSSURSULDWHZKLOH0 &GLVDJUHHV
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
³$UHPDQGLVSURSHUERWKDWFRPPRQODZDQGXQGHUWKH
IHGHUDOODZRIDUELWUDWLRQFRQWUDFWVWRFODULI\DQDPELJXRXV
DZDUG RU WR UHTXLUH WKH DUELWUDWRU WR DGGUHVV DQ LVVXH
VXEPLWWHGWRKLPEXWQRWUHVROYHGE\WKHDZDUG´*UHHQY
$PHULWHFK&RUS)G WK&LU 7KH
DXWKRULW\ WR RUGHU D UHPDQG GHULYHV IURP D UHFRJQL]HG
H[FHSWLRQWRWKHIXQFWXVRIILFLRGRFWULQHZKLFKKROGVWKDWDQ
DUELWUDWRU¶V GXWLHV DUH JHQHUDOO\ GLVFKDUJHG XSRQ WKH
UHQGHULQJ RI D ILQDO DZDUG ZKHQ WKH DUELWUDO DXWKRULW\ LV
WHUPLQDWHG6HHLGDW+RZHYHU³μ>Z@KHUHWKHDZDUG
DOWKRXJK VHHPLQJO\ FRPSOHWH OHDYHV GRXEW ZKHWKHU WKH
VXEPLVVLRQ KDV EHHQ IXOO\ H[HFXWHG DQ DPELJXLW\ DULVHV
ZKLFKWKHDUELWUDWRULVHQWLWOHGWRFODULI\¶´,GDW TXRWLQJ
/D9DOH3OD]D,QFY561RRQDQ,QF)G
UG&LU 6HHDOVR+\OHY'RFWRU¶V$VVRF)G
G&LU ³>$@GLVWULFWFRXUWFDQUHPDQGDQ
DZDUG WR WKH DUELWUDWRU IRU FODULILFDWLRQ ZKHUH DQ DZDUG LV
DPELJXRXV´
7KH SURSULHW\ RI UHPDQGLQJ DQ DPELJXRXV DZDUG WR WKH
DUELWUDWRULVUHHQIRUFHGE\WKHVWURQJIHGHUDOSROLF\IDYRULQJ
DUELWUDWLRQ 6HH %HKU ,, )G DW 'DXJKWUH\ -
GLVVHQWLQJ ³, DP OHG WR WK>H@ FRQFOXVLRQ >WKDW UHPDQG RI
DPELJXRXV DZDUG ZDV SURSHU@ E\ WKH 6XSUHPH &RXUW¶V
SURQRXQFHPHQW WKDW μDQ\ GRXEWV FRQFHUQLQJ WKH VFRSH RI
DUELWUDEOHLVVXHVVKRXOGEHUHVROYHGLQIDYRURIDUELWUDWLRQ¶´
TXRWLQJ0RVHV+&RQH0HPRULDO+RVSY0HUFXU\&RQVWU
&R 86 0XWXDO )LUH 0DULQH
,QODQG,QV&RY1RUDG5HLQVXUDQFH&R)G
G&LU ³$GLVWULFWFRXUWLWVHOIVKRXOGQRWFODULI\DQ
DPELJXRXV DUELWUDWLRQ DZDUG EXW VKRXOG UHPDQG LW WR WKH
DUELWUDWLRQSDQHOIRUFODULILFDWLRQ´ 2IFRXUVHLWLVWUXHWKDW
³>Z@KHQ SRVVLEOH D FRXUW VKRXOG DYRLG UHPDQGLQJ D
GHFLVLRQWRWKHDUELWUDWRUEHFDXVHRIWKHLQWHUHVWLQSURPSWDQG
ILQDO DUELWUDWLRQ´ 3XEOLFLV &RPPXQLFDWLRQ Y 7UXH 1RUWK
&RPPXQLFDWLRQV,QF)G WK&LU $W
WKHVDPHWLPHKRZHYHUDFRXUWVLPSO\VKRXOGQRW³HQJDJ>H@
LQLPSHUPLVVLEOHLQWHUSUHWDWLRQ´RIDQDPELJXRXVDZDUG7UL
6WDWH%XV0DFK,QFY/DQLHU:RUOGZLGH,QF)G

-- 9 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

WK&LU UHYHUVLQJDQGUHPDQGLQJRUGHU
H[HFXWLQJSRVWDUELWUDWLRQMXGJPHQWZKHUHGLVWULFWFRXUWHUUHG
LQQRWUHPDQGLQJWKHDPELJXRXVDZDUGWRDUELWUDWLRQSDQHOIRU
FODULILFDWLRQ 6HHDOVR$PHULFDV,QVXUDQFH&RY6HDJXOO
&RPSDQLD1DYLHUD6$)G G&LU ³$Q
DPELJXRXVDZDUGVKRXOGEHUHPDQGHGWRWKHDUELWUDWRUVVR
WKDW WKH FRXUW ZLOO NQRZ H[DFWO\ ZKDW LW LV EHLQJ DVNHG WR
HQIRUFH´ *DQH\ Y 5DIIRQH 1R :/
DW WK &LU -XO\ ³7KHUH DUH OLPLWHG
FLUFXPVWDQFHVXQGHUZKLFKDGLVWULFWFRXUWFDQUHPDQGDFDVH
WRWKHDUELWUDWRUVIRUFODULILFDWLRQ:KLOHDUHPDQGLVWREH
XVHGVSDULQJO\LWPD\EHHPSOR\HGWRDYRLGMXGLFLDOJXHVVLQJ
RIWKHPHDQLQJRIDUELWUDODZDUGV´ FLWDWLRQVDQGTXRWDWLRQV
RPLWWHG ,QVKRUWIRUDFRXUWWRHQJDJHLQJXHVVZRUNDVWRWKH
PHDQLQJDQGDSSOLFDWLRQRIDQDPELJXRXVDUELWUDWLRQDZDUG
LVLQFRQVLVWHQWQRWRQO\ZLWKIHGHUDOSROLF\EXWDOVRZLWKWKH
SDUWLHV¶RZQDJUHHPHQWWRVXEPLWWKHLUGLVSXWHWRDUELWUDWLRQ
,Q %HKU ,, WKH PDMRULW\ GHFLGHG WKDW UHPDQG ZDV
LQDSSURSULDWHEHFDXVHLWGHWHUPLQHGWKDWWKHDZDUGZDVQRW
DPELJXRXV 7KHUH WKH SRUWLRQ RI WKH DUELWUDWRU¶V DZDUG
VXEMHFWWRGLVSXWHZDVHDVLO\LGHQWLILHG7KHGLVWULFWFRXUW
GHWHUPLQHGWKDW³%HKUKDGUDLVHGDJRRGIDLWKLVVXHRIZKDW
FRQVWLWXWHVDQμRUGHU¶XQGHUWKHFRPPLVVLRQFRQWUDFWDQGWKDW
WKH SULRU DUELWUDWLRQ DZDUG KDG QRW DGGUHVVHG WKDW LVVXH´
%HKU ,, )G DW +HUH RQ WKH RWKHU KDQG WKH
GLVWULFWFRXUW¶VRUGHUODFNVDQ\LQGLFDWLRQRISUHFLVHO\KRZWKH
(LJKWK $ZDUG LV ³XQFOHDU DV WR LWV DSSOLFDWLRQ´ RU ZKLFK
LVVXHVXEPLWWHGWRWKHDUELWUDWRUZDV³QRWIXOO\DGMXGLFDWH>G@´
1RUZLWKDQ\FRQILGHQFHFDQZHGLYLQHWKHDQVZHUVIURPWKH
FLUFXPVWDQFHVSULRUWRLWVUHPDQGRUGHUWKHGLVWULFWFRXUWKDG
H[SUHVVO\KHOGWKDWWKHDUELWUDWRU¶VRSLQLRQDQGDZDUGZHUH
QRW DPELJXRXV ZLWK UHVSHFW WR %HKU¶V REOLJDWLRQ WR SD\
FRPPLVVLRQVRQWKH(.SDUWVDQG.SDUWV,IWKH
GLVWULFWFRXUWKDVFKDQJHGLWVPLQGDERXWWKLVLVVXHLWQHHGVWR
VD\VRDQGH[SODLQLW,IWKHUHLVDQRWKHUDPELJXLW\LQWKH
DZDUGWKDWPDNHVHQIRUFHPHQWLPSRVVLEOHWKHGLVWULFWFRXUW
QHHGVWRLGHQWLI\LW8QWLOLWGRHVVRZHFDQQRWXQGHUWDNHD
PHDQLQJIXO UHYLHZ RI ZKHWKHU WKH DZDUG LV DPELJXRXV RU
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
ZKHWKHUWKHFLUFXPVWDQFHVDUHDSSURSULDWHIRUDUHPDQGWRWKH
DUELWUDWRU0RUHRYHUWKHGLVWULFWFRXUW¶VYDJXHRUGHUFUHDWHV
D VXEVWDQWLDO ULVN WKDW WKH DUELWUDWRU ZLOO KDYH LQVXIILFLHQW
JXLGDQFHDVWRKRZWRFODULI\LWVDZDUGFUHDWLQJWKHSRWHQWLDO
IRU\HWDQRWKHUMRXUQH\WRWKHGLVWULFWFRXUWWRWKLVFRXUWRQ
DSSHDODQGEDFN\HWDJDLQWRWKHDUELWUDWRU$FFRUGLQJO\ZH
ILQGLWQHFHVVDU\WRUHPDQGWKLVFDVHWRWKHGLVWULFWFRXUWIRU
FODULILFDWLRQRIWKHSUHFLVHLVVXHRULVVXHVWKDWUHPDLQIRUWKH
DUELWUDWRURQUHPDQG
%HFDXVHWKHFDVHZLOOEHUHPDQGHGWRWKHGLVWULFWFRXUWWZR
RWKHULVVXHVUDLVHGE\%HKUPHULWGLVFXVVLRQLQWKHLQWHUHVWRI
MXGLFLDOHFRQRP\
6KRXOG5HPDQG%H7R7KH6DPH$UELWUDWRU"
%HKUDUJXHVWKDWDVVXPLQJUHPDQGZDVDSSURSULDWHLWZDV
HUURUIRUWKHGLVWULFWFRXUWWRUHPDQGWKHDZDUGWRWKHRULJLQDO
DUELWUDWRUUDWKHUWKDQGLUHFWLQJWKHSDUWLHVWRVWDUWWKHZKROH
SURFHVVRYHUDJDLQEHIRUHDEUDQGQHZDUELWUDWRU,QPDNLQJ
WKLVDUJXPHQW%HKUIDLOVWRDFFRXQWIRURXUREVHUYDWLRQLQ
*UHHQWKDW³>F@RXUWVXVXDOO\UHPDQGWRWKHRULJLQDODUELWUDWRU
IRUFODULILFDWLRQRIDQDPELJXRXVDZDUGZKHQWKHDZDUGIDLOV
WRDGGUHVVDFRQWLQJHQF\WKDWODWHUDULVHVRUZKHQWKHDZDUGLV
VXVFHSWLEOHWRPRUHWKDQRQHLQWHUSUHWDWLRQ´*UHHQ)G
DW HPSKDVLVDGGHG 7KHGLVWULFWFRXUWFKDUDFWHUL]HGLWV
UHPDQG RUGHU DV ³VLPSO\ UHTXLU>LQJ WKH DUELWUDWRU@ WR
FRPSOHWHKLVGXWLHVE\DSSO\LQJKLVUHDVRQLQJWRWKHIDFWVDQG
QRWUHRSHQ>LQJ@WKHPHULWVRIWKHFDVH´$VVXPLQJWKDW
WKHGLVWULFWFRXUW¶VUHYLVHGRUGHURQUHPDQGLVFRQVLVWHQWZLWK
WKLVFKDUDFWHUL]DWLRQUHPDQGWRWKHRULJLQDODUELWUDWRULVWKH
ULJKWUHVXOW
&DQ7KLV,QWHUQDWLRQDO$UELWUDWLRQ%H5HPDQGHG"
+RSLQJ WR DYRLG UHPDQG %HKU PDNHV D WZRSURQJHG
DUJXPHQW WKDW UHPDQG LV LPSURSHU HYHQ LI WKH DZDUG LV
DPELJXRXV )LUVW %HKU FRQWHQGV WKDW WKH ,QWHUQDWLRQDO
&KDPEHURI&RPPHUFH ,&& 5XOHVWKDWJRYHUQWKLVGLVSXWH
SXUVXDQWWRWKHSDUWLHV¶DUELWUDWLRQDJUHHPHQWGRQRWH[SUHVVO\

-- 10 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

SHUPLWUHPDQG%HKUSRLQWVRXWWKDWWKHYHUVLRQRIWKH
,&& 5XOHV ³PDGH QR SURYLVLRQ IRU UHFRQVLGHUDWLRQ
UHLQWHUSUHWDWLRQRUUHPDQG´$FFRUGLQJWR%HKUUHPDQGLV
WKHUHIRUHGLVDOORZHG
+RZHYHUDV0 &SRLQWVRXW$UWLFOHRIWKHVDPHUXOHV
GHPRQVWUDWHVWKDWDJXLGLQJSULQFLSDOEHKLQGWKHUXOHVLVWR
HQVXUH WKDW WKH DZDUG LV XOWLPDWHO\ VXVFHSWLEOH RI
HQIRUFHPHQWSURYLGLQJDVLWGRHVWKDW³>L@QDOOPDWWHUVQRW
H[SUHVVO\ SURYLGHG IRU LQ WKHVH UXOHV WKH FRXUW DQG WKH
$UELWUDO 7ULEXQDO VKDOO DFW LQ WKH VSLULW RI WKHVH 5XOHV DQG
VKDOO PDNH HYHU\ HIIRUW WR PDNH VXUH WKDW WKH $ZDUG LV
HQIRUFHDEOHDWODZ´:HUHDGWKLVSURYLVLRQWRSHUPLWUHPDQG
LQWKLVFDVHJLYHQWKDWFODULILFDWLRQE\WKHRULJLQDODUELWUDWRU
LVFULWLFDOLQRUGHUWRPDNHWKH(LJKWK$ZDUGHQIRUFHDEOHDW
ODZ
0RUHRYHU DV 0 & LQGLFDWHV WKH SDUWLHV¶ WHUPV RI
UHIHUHQFHIRUWKHDUELWUDWLRQSURYLGHWKDW³>Z@KHUHWKH5XOHV
DUHVLOHQWWKHQVXFKUXOHVVKDOODSSO\DVPD\EHPDGHIURP
WLPHWRWLPHE\WKH$UELWUDWRUFRQVLVWHQWZLWKDQ\PDQGDWRU\
UHTXLUHPHQWRIWKHODZRIWKHSODFHRIDUELWUDWLRQ´7KH
³SODFHRIDUELWUDWLRQ´LQWKLVFDVHZDV/RQGRQ(QJODQGDQG
(QJOLVK ODZ DSSHDUV WR UHTXLUH UHPDQG XQGHU WKH
FLUFXPVWDQFHVSUHVHQWHGE\WKLVFDVH,QWKLVUHJDUG0 &
SRLQWV WR WKH (QJOLVK $UELWUDWLRQ $FW RI LQ ZKLFK
3DUOLDPHQW SURYLGHG WKDW ZKHUH WKHUH LV ³XQFHUWDLQW\ RU
DPELJXLW\DVWRWKHHIIHFWRIWKHDZDUG´LWPD\EH³UHPLW>WHG@
WRWKHWULEXQDOLQZKROHRULQSDUW´(QJOLVK$UELWUDWLRQ$FW
RI &KDSWHU † I DQG D ,Q WKH
DEVHQFHRIDFOHDULQGLFDWLRQWKDWUHPDQGLVGLVDOORZHGE\WKH
DSSOLFDEOHUXOHVZHILQGQRPHULWWRWKLVDUJXPHQWE\%HKU
%HKU¶VILQDODUJXPHQWLVEDVHGRQWKH&RQYHQWLRQRQWKH
5HFRJQLWLRQ DQG (QIRUFHPHQW RI )RUHLJQ $UELWUDO $ZDUGV
³1HZ <RUN &RQYHQWLRQ´ 6HH 86& † %HKU
REVHUYHV WKDW ³>W@KH &RQYHQWLRQ PDNHV QR SURYLVLRQ IRU D
UHPDQGDIWHUDQDUELWUDWLRQDZDUGLVUHQGHUHG´0DNLQJWKLV
VDPH REVHUYDWLRQ WKH GLVWULFW FRXUW EHORZ FRQFOXGHG LQ D
0 &&RUSY(UZLQ
%HKU*PE+ &R
1R
VHSDUDWH RUGHU HQWHUHG DOPRVW VL[ \HDUV DJR WKDW LW KDG QR
DXWKRULW\ WR RUGHU D UHPDQG VD\LQJ WKDW ³>E@HFDXVH WKH
DUELWUDWLRQDZDUGLVJRYHUQHGE\WKH>1HZ<RUN&RQYHQWLRQ@
DQGEHFDXVHWKDWFRQYHQWLRQPDNHVQRSURYLVLRQIRUDUHPDQG
DIWHUDQDUELWUDWLRQDZDUGLVUHQGHUHGWKHUHLVQREDVLVLQODZ
IRUWKLVFRXUWWRUHPDQG´,QDGGLWLRQ%HKUFLWHVRXUKROGLQJ
LQ%HKU,WKDWWKH1HZ<RUN&RQYHQWLRQDSSOLHGWRSUHYHQWD
SDUW\IURPPRYLQJLQWKH8QLWHG6WDWHVFRXUWVWRYDFDWHDQ
DUELWUDWLRQDZDUGPDGHLQDIRUHLJQQDWLRQ)GDW
&RQWUDU\WRZKDW%HKUDUJXHVKRZHYHUQHLWKHUWKH1HZ
<RUN&RQYHQWLRQLWVHOIQRURXUKROGLQJLQ%HKU,FRPSHOVD
KROGLQJWKDWWKHGLVWULFWFRXUWODFNVDXWKRULW\WRUHPDQGDQ
DPELJXRXV DZDUG )LUVW ZH QRWH WKDW WKH 1HZ <RUN
&RQYHQWLRQLVXWWHUO\VLOHQWRQWKHLVVXHDVLWLVRQPDQ\RWKHU
LVVXHV GHDOLQJ ZLWK WKH QXWV DQG EROWV RI LQWHUQDWLRQDO
DUELWUDWLRQSURFHGXUH$WERWWRPDUHPDQGRIDQDPELJXRXV
DZDUG XQGHU WKH FLUFXPVWDQFHV SUHVHQWHG KHUH LV QRW
LQFRQVLVWHQWZLWKDQ\SURYLVLRQRIWKH1HZ<RUN&RQYHQWLRQ
DQGZHKDYHEHHQXQDEOHWRORFDWHDQ\DXWKRULW\VXJJHVWLQJ
WKDW LW LV 0RUHRYHU RXU KROGLQJ LQ %HKU , LV LQDSSRVLWH
7KHUH ZH ZHUH IDFHG ZLWK D PRWLRQ WR YDFDWH D IRUHLJQ
DUELWUDWLRQ DZDUG DQG KHOG WKDW WKH GLVWULFW FRXUW ODFNHG
MXULVGLFWLRQWRHQWHUVXFKDQRUGHUEHFDXVH³>S@XUVXDQWWRWKH
&RQYHQWLRQDQDSSOLFDWLRQIRUVHWWLQJDVLGHRUVXVSHQGLQJDQ
DUELWUDODZDUGPD\EHPDGHRQO\WRDμFRPSHWHQWDXWKRULW\RI
WKHFRXQWU\LQZKLFKRUXQGHUWKHODZRIZKLFKWKDWDZDUG
ZDV PDGH¶´ %HKU , )G DW TXRWLQJ 1HZ <RUN
&RQYHQWLRQ$UW9, +HUHE\FRQWUDVWWKHSDUWLHVGRQRW
VHHNWRYDFDWHWKHFRQILUPHGDUELWUDWLRQDZDUGQRUGLGWKH
GLVWULFWFRXUWHQWHUVXFKDQRUGHU5DWKHUWKHGLVWULFWFRXUW
RUGHUHGDUHPDQGVRWKDWDQDZDUGWKDWLWGHWHUPLQHGWREH
DPELJXRXVFRXOGEHUHQGHUHGHQIRUFHDEOH
&21&/86,21
7KHGLVWULFWFRXUW¶VRUGHUUHPDQGLQJWKLVFDVHWRWKHRULJLQDO
DUELWUDWRUIRUFODULILFDWLRQRIDQDSSDUHQWDPELJXLW\IDLOVWR
LGHQWLI\ WKH LVVXH RU LVVXHV WKDW VXSSRVHGO\ QHHG WKH

-- 11 of 12 --

1R 0 &&RUSY(UZLQ
%HKU*PE+ &R

DUELWUDWRU¶V DWWHQWLRQ :H FDQQRW FRQGXFW D PHDQLQJIXO
UHYLHZRIWKHSURSULHW\RIWKHGLVWULFWFRXUW¶VRUGHURIUHPDQG
ZLWKRXWDVWDWHPHQWE\WKHGLVWULFWFRXUWRIZKDWLWSHUFHLYHV
WREHWKHDPELJXLW\LQWKHDZDUG,QDGGLWLRQWKHDUELWUDWRU¶V
MRERQUHPDQGZLOOEHQHHGOHVVO\FRPSOLFDWHGLQWKHDEVHQFH
RIFOHDUGLUHFWLRQIURPWKHGLVWULFWFRXUW$FFRUGLQJO\ZH
5(0$1'WKLVFDVHWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWR
HQWHUDQRUGHUVSHFLI\LQJLQZKDWUHVSHFWVWKH(LJKWK$ZDUG
LVXQFOHDUDVWRLWVDSSOLFDWLRQ

-- 12 of 12 --