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Amity Business School
MBA 2013, 3rd Semester IEP Amanpreet Kang
Amity Business School
Dispute Settlement, Appeal and Appellate Procedures
Amity Business School
WTO - Organisation
• Ministerial Council
• • Trade Policy Review Body Dispute Settlement Body
– – – •
Goods Council Services Council IP Council
Specialized committees, working groups, working parties
Amity Business School Introduction • The WTO’s procedure for resolving trade disagreements under the Dispute Settlement Understanding (an agreement) is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. The Legal Basis – The Dispute Settlement Understanding (DSU) — the main WTO agreement on settling disputes. – Was one of the outcomes of the Uruguay Round negotiations. through the Dispute Settlement Body. The authors of these agreements are the member governments themselves — the agreements are the outcome of negotiations among members. 4 • . • A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO. Ultimate responsibility for settling disputes also lies with member governments.
Mr. • 5 . – Members of the Appellate Body have four-year terms.E. The current chairperson is H. usually represented by ambassadors or equivalent. – They have to be individuals with recognized standing in the field of law and international trade.Amity Business School Introduction • The Dispute Settlement Body – Made up of all member governments. Yonov Frederick AGAH (Nigeria). The Appellate Body – The permanent seven-member Appellate Body is set up by the Dispute Settlement Body and broadly represents the range of WTO membership. not affiliated with any government.
e. through consultations (between nations) if possible. Appeals based on points of law are possible.Amity Business School Dispute Settlement • • Dispute settlement is the central pillar of the multilateral trading system. The WTO’s procedure for dispute settlement. It helps to increase the effectiveness of the rules-based system and helps in the enforcement of rules. accepted or rejected by the WTO’s full membership. makes the trading system more secure and predictable. Majority of cases get settled ―out of court‖. Dispute settlement is based on clearly-defined rules. The priority is to settle disputes. 6 • • • • • • . with timetables for completing a case. First rulings are made by a panel are endorsed i.
• A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellowWTO members consider to be breaking the WTO agreements. • 7 . A third group of countries (apart from the 2 parties involved) can declare that they have an interest in the case and enjoy some rights. That means abiding by the agreed procedures. or to be a failure to live up to obligations. and respecting judgements. WTO members have agreed that if they believe fellowmembers are violating trade rules.Amity Business School Dispute Settlement • • Disputes in the WTO are about broken promises/ agreements. they will use the multilateral system of settling disputes instead of taking action unilaterally.
there was a procedure to settle disputes but – it had no fixed timetables.) – Greater discipline for the length of time a case should take to be settled. it should not normally take more than about 12 — 15 months if the case is appealed.Amity Business School Dispute Settlement • Under GATT.if the case is considered urgent. Uruguay Round introduced a more structured process – Clearly defined stages in the procedure (Details about the procedures and the timetable to be followed in resolving disputes. – The agreement emphasizes prompt settlement for effective functioning of the WTO – If a case runs its full course to a first ruling. and – many cases dragged on for a long time inconclusively. – rulings were easier to block. with flexible deadlines set in various stages of the procedure. – The agreed time limits are flexible . 8 • . it is accelerated as much as possible.
Earlier. 9 . The first stage is consultations between the governments concerned. rulings are automatically adopted unless there is a consensus to reject a ruling — any country wanting to block a ruling has to persuade all other WTO members. and even when the case has progressed to other stages. to share its view. meaning that a single objection could block the ruling.Amity Business School Dispute Settlement • • • • • The Uruguay Round agreement made it almost impossible for the country losing a case to block the adoption of the ruling. consultation and mediation are still always possible. under the GATT procedure. rulings could only be adopted by consensus. but the preferred solution is for the countries concerned to discuss their problems and settle the dispute by themselves. The procedure resembles a court/ tribunal. Now.
and has the power to authorize retaliation when a country does not comply with a ruling.e. which consists of all WTO members. the General Council). It monitors the implementation of the rulings and recommendations. and to accept or reject the panels’ findings or the results of an appeal. The Dispute Settlement Body has the sole authority to establish ―panels‖ of experts to consider the case. • • 10 .Amity Business School How are disputes settled? • Settling disputes is the responsibility of the Dispute Settlement Body (i.
which can only reject the report by consensus. The panel’s report is passed to the Dispute Settlement Body. They cannot receive instructions from any government. Only if the 2 sides cannot agree does the WTO director-general appoint them. Panelists for each case can be chosen from a permanent list of well-qualified candidates. They serve in their individual capacities. Panels consist of 3 (to five) experts from different countries who examine the evidence and decide who is right and who is wrong. The panelists are usually chosen in consultation with the countries in dispute. • • • 11 .Amity Business School Panel members • Panels are like tribunals.
plus 6 months for the panel to conclude). the complaining country can ask for a panel to be appointed. the appointment can no longer be blocked (unless there is a consensus against appointing the panel).Amity Business School How are disputes settled? • First stage: consultation (up to 60 days). 12 • . If that fails. they can also ask the WTO director-general to mediate or try to help in any other way. Before taking any other actions the countries in dispute have to talk to each other to see if they can settle their differences by themselves. but when the Dispute Settlement Body meets for a second time. – If consultations fail. – The country ―in the dock‖ can block the creation of a panel once. Second stage: the panel (up to 45 days for a panel to be appointed.
the deadline is shortened to 3 months. including those concerning perishable goods. its conclusions are difficult to overturn. – In cases of urgency. 13 .Amity Business School How are disputes settled? • Second stage: the panel – The panel helps the Dispute Settlement Body make rulings or recommendations. – The panel’s final report should normally be given to the parties to the dispute within 6 months. – The panel’s findings have to be based on the agreements cited. – But because the panel’s report can only be rejected by consensus in the Dispute Settlement Body.
Before the first hearing: each side presents its case in writing to the panel. . 14 2. Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panel’s second meeting.Amity Business School How do panels work? The agreement (on dispute settlement) describes in some detail how the panels are to work. make their case at the panel’s first hearing. and those that have announced they have an interest in the dispute. 3. First hearing: the case for the complaining country and defense: the complaining country (or countries). The main stages are: 1. the responding country.
giving them one week to ask for a review. Experts: if one side raises scientific or other technical matters. Review: The period of review must not exceed two weeks. the panel may hold additional meetings with the two sides. . 15 5. to the two sides. 7. including its findings and conclusions. Interim report: The panel then submits an interim report. 6. the panel may consult experts or appoint an expert review group to prepare an advisory report. First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides. This report does not include findings and conclusions.Amity Business School How do panels work? 4. During that time. giving them two weeks to comment.
The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or recommendation within 60 days unless a consensus rejects it. The panel may suggest how this could be done. Final report: A final report is submitted to the two sides and three weeks later. it is circulated to all WTO members. 16 . If the panel decides that the disputed trade measure does break a WTO agreement or an obligation. 9.Amity Business School How do panels work? 8. it recommends that the measure be made to conform with WTO rules. Both sides can appeal the report (and in some cases both sides do).
Totals are also approximate.Amity Business School These approximate periods for each stage of a dispute settlement procedure are target figures — the agreement is flexible. the countries can settle their dispute themselves at any stage. 60 days 45 days 6 months 3 weeks 60 days Total = 1 year 60-90 days 30 days Total = 1y 3m Consultations. In addition. etc Panel set up and panellists appointed Final panel report to parties Final panel report to WTO members Dispute Settlement Body adopts report (if no appeal) (without appeal) Appeals report Dispute Settlement Body adopts appeals report (with appeal) 17 . mediation.
Members of the Appellate Body have four-year terms. not affiliated with any government. • • • They have to be individuals with recognized standing in the field of law and international trade.Amity Business School Appeals • • Either side/ both parties can appeal a panel’s ruling. Appeals have to be based on points of law such as legal interpretation — they cannot reexamine existing evidence or examine new issues. Each appeal is heard by three members of a permanent sevenmember Appellate Body set up by the DSB and broadly representing the range of WTO membership. 18 .
Amity Business School Appeals • The appeal can uphold. with an absolute maximum of 90 days. Normally appeals should not last more than 60 days. but shall make use of the dispute settlement rules and procedures of the DSU. 19 • • • . modify or reverse the panel’s legal findings and conclusions. One of the central provisions of the DSU reaffirms that Members shall not themselves make determinations of violations or suspend concessions. The Dispute Settlement Body has to accept or reject the appeals report within 30 days — and rejection is only possible by consensus.
20 • • • • . it should swiftly correct its fault. The priority at this stage is for the losing ―defendant‖ to bring its policy into line with the ruling or recommendations. it should offer compensation or suffer a suitable penalty that has some bite. there is more to do before trade sanctions (the conventional form of penalty) are imposed. The dispute settlement agreement stresses that ―prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members‖. Once the case has been decided. If it continues to break an agreement.Amity Business School Corrective Action • If a country has done something wrong.
tariff reductions in areas of particular interest to the complaining side. 21 • • • . it has to enter into negotiations with the complaining country (or countries) in order to determine mutuallyacceptable compensation — for instance. If complying with the recommendation immediately proves impractical. the member will be given a ―reasonable period of time‖ to do so. it must follow the recommendations of the panel report or the appeals report. It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the report’s adoption.Amity Business School Corrective Action • If the country that is the target of the complaint loses. If it fails to act within this period.
the sanctions can be imposed in a different sector of the same agreement. 22 .Amity Business School Corrective Action • If after 20 days. • • In principle. The Dispute Settlement Body must grant this authorization within 30 days of the expiry of the ―reasonable period of time‖ unless there is a consensus against the request. no satisfactory compensation is agreed. the complaining side may ask the DSB for permission to impose limited trade sanctions (―suspend concessions or obligations‖) against the other side. the sanctions should be imposed in the same sector as the dispute. If this is not practical or if it would not be effective.
Amity Business School Corrective Action • In turn. if this is not effective or practicable and if the circumstances are serious enough. the Dispute Settlement Body monitors how adopted rulings are implemented. Any outstanding case remains on its agenda until the issue is resolved. In any case. the action can be taken under another agreement. The objective is to minimize the chances of actions spilling over into unrelated sectors while at the same time allowing the actions to be effective. • • 23 .
The most recent amendments modify the deadlines for written submissions during an appeal and provide for the filing and service of written submissions in electronic form.Amity Business School Appellate Procedures • Appeals are conducted according to the procedures established under: – Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) – Working Procedures for Appellate Review (Working Procedures). These amendments take effect for appeals initiated on/ after 15 September 2010 • • 24 . The Working Procedures are drawn up by the Appellate Body in consultation with the – Director-General of the WTO and – Chairman of the Dispute Settlement Body (DSB) They have been amended six times since 1995. – The most recent amendments were announced on 26 July 2010.
unless a party decides to appeal. 25 • • • • . Parties to a dispute may appeal a panel report at any time before the panel report is adopted by the DSB.Amity Business School Appellate Procedures • The appellate stage follows the issuance of a report by a panel established pursuant to the DSU. Panel reports must be adopted by the DSB within 60 days of their circulation to WTO Members. Appeals are limited to issues of law covered in the panel report and legal interpretations developed by the panel. Third parties are not entitled to appeal a panel report.
A party to the dispute that wishes to respond to the allegations raised by the appellant may file its own written submission within 18 days of the date on which the Notice of Appeal and the appellant's submission were filed.Amity Business School Appellate Procedures • An appeal is commenced upon written notification to the DSB and the simultaneous filing of a Notice of Appeal with the Appellate Body Secretariat. A party that files a written submission is known as an ―appellee‖. • 26 . A party that files a Notice of Appeal is known as the ―appellant‖.
A party to the dispute other than the original appellant may also appeal on the same grounds or on other alleged errors by filing a Notice of Other Appeal and a written submission within 5 days of the filing of the Notice of Appeal. 27 • • . Members that are third parties during the panel process may also file written submissions within 21 days of the date of filing of the Notice of Appeal.Amity Business School Appellate Procedures • • The Working Procedures recognize that some disputes may involve multiple appeals. Third parties that file written submissions or appear at the oral hearing (after taking written or discretionary permission from Appellate Body Secretariat and Appellate Body Division) are known as ―third participants‖. Parties wishing to respond to the allegations raised by the ―other appellant‖ may file a written submission within 18 days of the filing of the Notice of Appeal. This party is known as an ―other appellant‖.
Only WTO Members that are appellants. In a few instances. other appellants. appellants.Amity Business School Appellate Procedures • Oral Hearing: At the oral hearing. appellees or third participants are entitled to attend oral hearings. the Appellate Body Division hearing the appeal exchanges views with the other four Appellate Body Members 28 • • • • . appellees and third participants are given an opportunity to present oral arguments and to respond to questions put to them by the Appellate Body Division hearing the appeal. other appellants. After the oral hearing and before finalizing the Appellate Body Report. Proceedings before the Appellate Body are confidential. at the request of the parties. Appellate Body oral hearings have been opened to the public. The hearing generally takes place within 30 to 45 days of the filing of the Notice of Appeal.
together with the panel report will be put on the agenda of a DSB meeting for adoption. In its Report. must be unconditionally accepted by the parties to the dispute.Amity Business School Appellate Procedures • The Appellate Body Report is circulated to WTO Members in the 3 official languages of the WTO (English. French. together with the adopted Panel Report. Within 30 days of the circulation of an Appellate Body Report. and it becomes public immediately upon circulation to Members. The DSB will adopt the reports and an adopted Appellate Body Report. and Spanish) within 90 days of the date when the Notice of Appeal was filed. the Appellate Body may uphold. the Report. • • • 29 . modify or reverse the legal findings and conclusions of the panel.
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