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WTO ANALYTICAL INDEX: DISPUTE SETTLEMENT UNDERSTANDING Understanding on Rules and Procedures Governing the Settlement of Disputes |
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Article 12: Panel Procedures 1. Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute.
2. Panel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process.
3. After consulting the parties to the dispute, the panelists shall, as soon as practicable and whenever possible within one week after the composition and terms of reference of the panel have been agreed upon, fix the timetable for the panel process, taking into account the provisions of paragraph 9 of Article 4, if relevant.
4. In determining the timetable for the panel process, the panel shall provide sufficient time for the parties to the dispute to prepare their submissions.
5. Panels should set precise deadlines for written submissions by the parties and the parties should respect those deadlines.
6. Each party to the dispute shall deposit its written submissions with the Secretariat for immediate transmission to the panel and to the other party or parties to the dispute. The complaining party shall submit its first submission in advance of the responding party's first submission unless the panel decides, in fixing the timetable referred to in paragraph 3 and after consultations with the parties to the dispute, that the parties should submit their first submissions simultaneously. When there are sequential arrangements for the deposit of first submissions, the panel shall establish a firm time-period for receipt of the responding party's submission. Any subsequent written submissions shall be submitted simultaneously.
7. Where the parties to the dispute have failed to develop a mutually satisfactory solution, the panel shall submit its findings in the form of a written report to the DSB. In such cases, the report of a panel shall set out the findings of fact, the applicability of relevant provisions and the basic rationale behind any findings and recommendations that it makes. Where a settlement of the matter among the parties to the dispute has been found, the report of the panel shall be confined to a brief description of the case and to reporting that a solution has been reached.
8. In order to make the procedures more efficient, the period in which the panel shall conduct its examination, from the date that the composition and terms of reference of the panel have been agreed upon until the date the final report is issued to the parties to the dispute, shall, as a general rule, not exceed six months. In cases of urgency, including those relating to perishable goods, the panel shall aim to issue its report to the parties to the dispute within three months.
9. When the panel considers that it cannot issue its report within six months, or within three months in cases of urgency, it shall inform the DSB in writing of the reasons for the delay together with an estimate of the period within which it will issue its report. In no case should the period from the establishment of the panel to the circulation of the report to the Members exceed nine months.
10. In the context of consultations involving a measure taken by a developing country Member, the parties may agree to extend the periods established in paragraphs 7 and 8 of Article 4. If, after the relevant period has elapsed, the consulting parties cannot agree that the consultations have concluded, the Chairman of the DSB shall decide, after consultation with the parties, whether to extend the relevant period and, if so, for how long. In addition, in examining a complaint against a developing country Member, the panel shall accord sufficient time for the developing country Member to prepare and present its argumentation. The provisions of paragraph 1 of Article 20 and paragraph 4 of Article 21 are not affected by any action pursuant to this paragraph.
11. Where one or more of the parties is a developing country Member, the panel's report shall explicitly indicate the form in which account has been taken of relevant provisions on differential and more-favourable treatment for developing country Members that form part of the covered agreements which have been raised by the developing country Member in the course of the dispute settlement procedures.
12. The panel may suspend its work at any time at the request of the complaining party for a period not to exceed 12 months. In the event of such a suspension, the time-frames set out in paragraphs 8 and 9 of this Article, paragraph 1 of Article 20, and paragraph 4 of Article 21 shall be extended by the amount of time that the work was suspended. If the work of the panel has been suspended for more than 12 months, the authority for establishment of the panel shall lapse.
(a) "Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute." 318. In India - Patents (US), the Appellate Body examined the Panel's decision at the outset of the first substantive meeting - "that all legal claims would be considered if they were made prior to the end of that meeting; and this ruling was accepted by both parties". The Appellate Body, in being called upon to determine whether the Panel had exceeded its terms of reference, stated: "We do not find this statement ... consistent with the letter and the spirit of the DSU. Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. To be sure, Article 12.1 of the DSU says: 'Panels shall follow the Working Procedures in Appendix 3 unless the panel decides otherwise after consulting the parties to the dispute'. Yet that is all that it says. Nothing in the DSU gives a panel the authority either to disregard or to modify other explicit provisions of the DSU."(479) 319. In Australia - Salmon, the Appellate Body warned panels to be careful to observe due process(480) when complying with Article 12.2 requirement of flexibility in panel procedures: "We note that Article 12.2 of the DSU provides that '[p]anel procedures should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process.' However, a panel must also be careful to observe due process, which entails providing the parties adequate opportunity to respond to the evidence submitted."(481) 320. In US - Shrimp, the Appellate Body considered whether panels have the right to accept so-called amicus curiae briefs. With respect to this issue, see also paragraphs 338-339 and 637 below. In this context, the Appellate Body made a general statement on the issue of access to the dispute settlement process of the WTO. After noting that the access is limited to the Members of the WTO, the Appellate Body stated: "[U]nder the DSU, only Members who are parties to a dispute, or who have notified their interest in becoming third parties in such a dispute to the DSB, have a legal right to make submissions to, and have a legal right to have those submissions considered by, a panel. Correlatively, a panel is obliged in law to accept and give due consideration only to submissions made by the parties and the third parties in a panel proceeding. These are basic legal propositions; they do not, however, dispose of the issue here presented by the appellant's first claim of error. We believe this interpretative issue is most appropriately addressed by examining what a panel is authorized to do under the DSU."(482) (a) "basic rationale behind any findings and recommendations" 321. In Mexico - Corn Syrup (Article 21.5 - US), the Appellate Body analysed the term "basic rationale" and considered that Article 12.7 establishes a minimum standard for the reasoning that panels must provide in support of their findings and recommendations. The Appellate Body, however, indicated that it did not believe that it is either possible or desirable to determine, in the abstract, the minimum standard of reasoning that will constitute a "basic rationale" for the findings and recommendations made by a panel: "In considering the scope of the duties imposed on panels under Article 12.7, we turn first to the dictionary meaning of "basic", which includes both "fundamental; essential" and "constituting a minimum ... at the lowest acceptable level".(483) "Rationale" means both "a reasoned exposition of principles; an explanation or statement of reasons" and "the fundamental or underlying reason for or basis of a thing; a justification".(484) The "basic rationale" which a panel must provide is directly linked, by the wording of Article 12.7, to the "findings and recommendations" made by a panel. We, therefore, consider that Article 12.7 establishes a minimum standard for the reasoning that panels must provide in support of their findings and recommendations. Panels must set forth explanations and reasons sufficient to disclose the essential, or fundamental, justification for those findings and recommendations.
In our view, the duty of panels under Article 12.7 of the DSU to provide a "basic rationale" reflects and conforms with the principles of fundamental fairness and due process that underlie and inform the provisions of the DSU.(485) In particular, in cases where a Member has been found to have acted inconsistently with its obligations under the covered agreements, that Member is entitled to know the reasons for such finding as a matter of due process. In addition, the requirement to set out a "basic rationale" in the panel report assists such Member to understand the nature of its obligations and to make informed decisions about: (i) what must be done in order to implement the eventual rulings and recommendations made by the DSB; and (ii) whether and what to appeal. Article 12.7 also furthers the objectives, expressed in Article 3.2 of the DSU, of promoting security and predictability in the multilateral trading system and of clarifying the existing provisions of the covered agreements, because the requirement to provide "basic" reasons contributes to other WTO Members' understanding of the nature and scope of the rights and obligations in the covered agreements.
We do not believe that it is either possible or desirable to determine, in the abstract, the minimum standard of reasoning that will constitute a "basic rationale" for the findings and recommendations made by a panel.(486) Whether a panel has articulated adequately the "basic rationale" for its findings and recommendations must be determined on a case-by-case basis, taking into account the facts of the case, the specific legal provisions at issue, and the particular findings and recommendations made by a panel. Panels must identify the relevant facts and the applicable legal norms. In applying those legal norms to the relevant facts, the reasoning of the panel must reveal how and why the law applies to the facts. In this way, panels will, in their reports, disclose the essential or fundamental justification for their findings and recommendations.(487)
This does not, however, necessarily imply that Article 12.7 requires panels to expound at length on the reasons for their findings and recommendations. We can, for example, envisage cases in which a panel's "basic rationale" might be found in reasoning that is set out in other documents, such as in previous panel or Appellate Body reports - provided that such reasoning is quoted or, at a minimum, incorporated by reference. Indeed, a panel acting pursuant to Article 21.5 of the DSU would be expected to refer to the initial panel report, particularly in cases where the implementing measure is closely related to the original measure, and where the claims made in the proceeding under Article 21.5 closely resemble the claims made in the initial panel proceedings."(488) (i) Provisions of different WTO Agreements Test: Agreement that deals specifically and in detail with the measure at issue 322. In EC - Bananas III, the Appellate Body enunciated the test that should be applied in order to decide the order of analysis where two or more provisions from different covered Agreements appear a priori to apply to the measure in question. According to the Appellate Body, the provision from the Agreement that "deals specifically, and in detail" with the measures at issue should be analysed first.(489) GATT 1994 versus Licensing Agreement 323. In EC - Bananas III, the Appellate Body, disagreeing with the Panel's choice, considered that the Panel should have applied the Licensing Agreement first (instead of the GATT 1994), "since this agreement deals specifically, and in detail, with the administration of import licensing procedures": "Although Article X:3(a) of the GATT 1994 and Article 1.3 of the Licensing Agreement both apply, the Panel, in our view, should have applied the Licensing Agreement first, since this agreement deals specifically, and in detail, with the administration of import licensing procedures. If the Panel had done so, then there would have been no need for it to address the alleged inconsistency with Article X:3(a) of the GATT 1994."(490) GATT 1994 versus SPS Agreement 324. In EC - Hormones, the Panel, in a finding not reviewed by the Appellate Body, considered which Agreement, the Agreement on Sanitary and Phytosanitary Measures or the GATT 1994(491), should be examined first in this particular dispute. The Panel considered that the SPS Agreement was to be addressed first because it "specifically addresses the type of measure in dispute": "[I]n accordance with the ordinary meaning to be given to the terms of the SPS Agreement in their context and in the light of its object and purpose (in conformity with Article 31 of the Vienna Convention), there is no requirement, in any of the provisions of the SPS Agreement, that a prior violation of a GATT provision need be established before the SPS Agreement applies.
Having reached the conclusion that we are not per se required to address GATT claims prior to those raised under the SPS Agreement, we must then decide which of the two agreements we should examine first in this particular dispute. The SPS Agreement specifically addresses the type of measure in dispute. If we were to examine GATT first, we would in any event need to revert to the SPS Agreement: if a violation of GATT were found, we would need to consider whether Article XX(b) could be invoked and would then necessarily need to examine the SPS Agreement; if, on the other hand, no GATT violation were found, we would still need to examine the consistency of the measure with the SPS Agreement since nowhere is consistency with GATT presumed to be consistency with the SPS Agreement. For these reasons, and in order to conduct our consideration of this dispute in the most efficient manner, we shall first examine the claims raised under the SPS Agreement."(492) 325. The Panel on Australia - Salmon also dealt with the question whether to address first the provisions of the GATT 1994 or those of the SPS Agreement: "Canada recognizes that the SPS Agreement provides for obligations additional to those contained in GATT 1994, but, nevertheless, first addresses its claim under Article XI of GATT 1994. Australia invokes Article 2.4 of the SPS Agreement, which presumes GATT consistency for measures found to be in conformity with the SPS Agreement, to first address the SPS Agreement. We note, moreover, that (1) the SPS Agreement specifically addresses the type of measure in dispute, and (2) we will in any case need to examine the SPS Agreement, whether or not we find a GATT violation (since GATT consistency is nowhere presumed to constitute consistency with the SPS Agreement). In order to conduct our consideration of this dispute in the most efficient manner, we shall, therefore, first address the claims made by Canada under the SPS Agreement before addressing those put forward under GATT 1994."(493) GATT 1994 versus TBT Agreement 326. In EC - Asbestos, the Panel was faced with the difficulty of applying the above test by the Appellate Body in EC - Bananas III (see paragraphs 322-323 above), in order to decide whether to commence its analysis with the TBT Agreement with the GATT, because the parties did not agree on the legal nature of the measure itself (technical regulation covered by the TBT Agreement or general ban coming under the scope of the GATT 1994 alone). The Panel decided to start by examining the ways in which the Decree at issue violated the TBT Agreement since "if the Decree is a 'technical regulation' within the meaning of the TBT Agreement, then the latter would deal with the measure in the most specific and most detailed manner": "According to the Appellate Body in European Communities - Regime for the Importation, Sale and Distribution of Bananas(494), when the GATT 1994 and another Agreement in Annex 1A appear a priori to apply to the measure in question, the latter should be examined on the basis of the Agreement that deals "specifically, and in detail," with such measures. In this particular case, as the parties do not agree on the legal nature of the measure itself (technical regulation covered by the TBT Agreement or general ban coming under the scope of the GATT 1994 alone), it is difficult at this stage to determine which Agreement, either the GATT 1994 or the TBT Agreement, deals with the measure in question most specifically and in the most detailed manner without undertaking an in-depth examination of the measure in the light of each Agreement.
In order to decide upon the order in which our consideration should proceed, in the way suggested by the Appellate Body, the hypothesis should be that, if the Decree is a 'technical regulation' within the meaning of the TBT Agreement, then the latter would deal with the measure in the most specific and most detailed manner. Consequently, in our view it must first be determined whether the Decree is a technical regulation within the meaning of the TBT Agreement. If this is the case, we shall start considering this case by examining the ways in which the Decree violates the TBT Agreement. If we find that the Decree is not a 'technical regulation', we shall then immediately start to consider it in the context of the GATT 1994."(495) 327. In EC - Sardines, the Panel considered whether to examine the claims in the order requested by Peru. Peru had requested the Panel to examine its claim under Article 2.4 of the TBT Agreement first and then examine its claims in the order of Articles 2.2 and 2.1 of the TBT only if the EC Regulation was not considered inconsistent with Article 2.4. Peru further requested the Panel to examine its claims in respect of Article III:4 of the GATT 1994 only if the EC Regulation was not considered inconsistent with the provisions of the TBT Agreement invoked by Peru. The Panel recalled the Appellate Body's statement in EC - Bananas III that suggests that where two agreements apply simultaneously, a panel should normally consider the more specific agreement before the more general agreement. Furthermore, the Panel recalled the Appellate Body's statement in US - FSC in relation to the sequencing of claims: "These requests by Peru on sequencing of claims thereby oblige us to consider whether there is an interpretative methodology that compels panels to adopt a particular order which, if not followed, would constitute an error of law.(496) We recall the Appellate Body's statement in US - FSC in relation to the US argument that the panel erred by commencing its analysis with Article 3.1(a) rather than footnote 59 of the Subsidies and Countervailing Measures Agreement. The Appellate Body stated:
In our view, it was not a legal error for the Panel to begin its examination of whether the FSC measure involves export subsidies by examining the general definition of a "subsidy" that is applicable to export subsidies in Article 3.1(a). In any event, whether the examination begins with the general definition of a "subsidy" in Article 1.1 or with footnote 59, we believe that the outcome of the European Communities' claim under Article 3.1(a) would be the same. The appropriate meaning of both provisions can be established and can be given effect, irrespective of whether the examination of the claim of the European Communities under Article 3.1(a) begins with Article 1.1 or with footnote 59.(497)
In our view, if the EC Regulation is a technical regulation, it would not constitute an error of law to start the examination of the consistency of the EC Regulation with Article 2.4 followed by Articles 2.2 and 2.1 of the TBT Agreement as necessary since such sequential examination would not affect the interpretation of the other provisions."(498) GATT 1994 versus Agreement on Agriculture 328. In Chile - Price Band System, the Appellate Body considered whether the Panel had erred in choosing to examine Argentina's claim under Article 4.2 of the Agreement on Agriculture before examining its claim under Article II:1(b) of the GATT 1994. The Appellate Body upheld the Panel's order of analysis and found that Article 4.2 of the Agreement on Agriculture "applies specifically to agricultural products," whereas Article II:1(b) of the GATT 1994 "applies generally to trade in all goods".(499) GATT 1994 versus SCM Agreement 329. In Indonesia - Autos, the Panel, in a finding not reviewed by the Appellate Body, considered whether there is a conflict between the SCM Agreement and Article III of GATT 1994. The Panel recalled that for a conflict to exist between two agreements, they must cover the same substantive matter. The Panel found that there is no conflict since the two provisions have different purposes.(500) GATT 1994 versus TRIMs Agreement 330. In Indonesia - Autos, the Panel considered that it should first examine the claims under the TRIMs Agreement since the TRIMs Agreement is more specific than Article III:4 of the GATT 1994: "As to which claims, those under Article III:4 of GATT or Article 2 of the TRIMs Agreement, to examine first, we consider that we should first examine the claims under the TRIMs Agreement since the TRIMs Agreement is more specific than Article III:4 as far as the claims under consideration are concerned. A similar issue was presented in Bananas III, where the Appellate Body discussed the relationship between Article X of GATT and Article 1.3 of the Licensing Agreement and concluded that the Licensing Agreement being more specific it should have been applied first.(501) This is also in line with the approach of the panel and the Appellate Body in the Hormones(502) dispute, where the measure at issue was examined first under the SPS Agreement since the measure was alleged to be an SPS measure."(503) (ii) Provisions within the same Agreement SCM Agreement 331. In Brazil - Aircraft, the Appellate Body examined the order of the legal reasoning of the Panel. The Appellate Body criticized the fact that the Panel had examined whether Brazil, the defending party, had met the requirements of a particular provision (in casu Article 3.1(a) of the SCM Agreement) and had only subsequently considered whether this particular provision applied to Brazil in its capacity as a developing country, in light of another provision (in casu Article 27.4 of the SCM Agreement). The Appellate Body found that the reverse order of analysis would have been appropriate. The Appellate Body also found that the Panel should not have considered Brazil's 'affirmative defence' based on item (k) of the Illustrative List before determining whether Article 3.1(a) applied to Brazil: "Our interpretation of the relationship between Article 27 and Article 3.1(a) of the SCM Agreement(504) leads us, in this appeal, to examine, first, the issues appealed relating to whether Brazil has increased the level of its export subsidies contrary to the provisions of Article 27.4. Only if we determine that Brazil has not complied with the conditions of Article 27.4, and thereby find that the provisions of Article 3.1(a) do in fact apply to Brazil, will we need to examine Brazil's appeal of the Panel's findings relating to its alleged 'affirmative defence' under item (k) of the Illustrative List."(505) 332. In US - FSC, the Appellate Body examined the United States' argument that the Panel had erred by failing to begin its examination of the European Communities' claim under Articles 1.1 and 3.1(a) of the SCM Agreement, rather than with footnote 59 of that Agreement. The Appellate Body considered that "whether the examination begins with the general definition of a 'subsidy' in Article 1.1 or with footnote 59, we believe that the outcome of the European Communities' claim under Article 3.1(a) would be the same": "Instead, the Panel began its examination with the general definition of a 'subsidy' that is set forth in Article 1.1 of the SCM Agreement. This definition applies throughout the SCM Agreement, to all the different types of 'subsidy' covered by that Agreement. In our view, it was not a legal error for the Panel to begin its examination of whether the FSC measure involves export subsidies by examining the general definition of a 'subsidy' that is applicable to export subsidies in Article 3.1(a). In any event, whether the examination begins with the general definition of a 'subsidy' in Article 1.1 or with footnote 59, we believe that the outcome of the European Communities' claim under Article 3.1(a) would be the same. The appropriate meaning of both provisions can be established and can be given effect, irrespective of whether the examination of the claim of the European Communities under Article 3.1(a) begins with Article 1.1 or with footnote 59."(506) TRIPS Agreement 333. In Canada - Patent Term, the Appellate Body considered which should be the order of its analysis regarding Articles 33 and 70 of the TRIPS Agreement: "... As in every appeal, a threshold question is whether the measure before us falls within the scope of one of the covered agreements, in this case the TRIPS Agreement. For this reason, we begin our analysis of the legal issues raised in this appeal by considering Article 70, because this Article determines the overall applicability of the obligations of the TRIPS Agreement, including the obligation found in Article 33, to the measure in dispute. Only if we conclude from addressing Article 70 that the measure before us does fall within the scope of the TRIPS Agreement will it become necessary for us to examine the consistency of Section 45 of Canada's Patent Act with Article 33 of that Agreement."(507) 5. Access to the dispute settlement process by non-Members 334. In connection with the WTO access to the dispute settlement process, the Appellate Body in US - Shrimp emphasized that access and the legal right to have one's submission considered by a panel existed only for WTO Members:(508) "It may be well to stress at the outset that access to the dispute settlement process of the WTO is limited to Members of the WTO. This access is not available, under the WTO Agreement and the covered agreements as they currently exist, to individuals or international organizations, whether governmental or non-governmental. Only Members may become parties to a dispute of which a panel may be seized, and only Members 'having a substantial interest in a matter before a panel' may become third parties in the proceedings before that panel.(509) Thus, under the DSU, only Members who are parties to a dispute, or who have notified their interest in becoming third parties in such a dispute to the DSB, have a legal right to make submissions to, and have a legal right to have those submissions considered by, a panel. Correlatively, a panel is obliged in law to accept and give due consideration only to submissions made by the parties and the third parties in a panel proceeding. These are basic legal propositions; they do not, however, dispose of the issue here presented by the appellant's first claim of error. We believe this interpretative issue is most appropriately addressed by examining what a panel is authorized to do under the DSU."(510) 335. In Turkey - Textiles, Turkey argued that India directed its complaint against Turkey concerning a measure taken by another entity, namely the customs union existing between Turkey and the European Communities. Turkey argued that it was not responsible for actions collectively taken by the members of the customs union through the institutions created by the agreement. The Panel did not accept this argument and ultimately held that the measures at issue had been taken by Turkey. See also paragraphs 143 and 240-242 above. The Panel also emphasized that the customs union between Turkey and the European Communities did not have standing under WTO law: "[T]he WTO dispute settlement system is based on Member's rights; is accessible to Members only; and is enforced and monitored by Members only. The Turkey-EC customs union is not a WTO Member, and in that respect does not have any autonomous legal standing for the purpose of WTO law and therefore its dispute settlement procedures. Moreover, the European Communities' import restrictions appear a priori to be WTO compatible and could not be the object of any panel recommendation that the European Communities brings its measure into conformity with the WTO Agreement, as required by Article 19 of the DSU."(511)
XIII. Article 13 back to top Article 13: Right to Seek Information 1. Each panel shall have the right to seek information and technical advice from any individual or body which it deems appropriate. However, before a panel seeks such information or advice from any individual or body within the jurisdiction of a Member it shall inform the authorities of that Member. A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate. Confidential information which is provided shall not be revealed without formal authorization from the individual, body, or authorities of the Member providing the information.
2. Panels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter. With respect to a factual issue concerning a scientific or other technical matter raised by a party to a dispute, a panel may request an advisory report in writing from an expert review group. Rules for the establishment of such a group and its procedures are set forth in Appendix 4.
(a) "right to seek information and technical advice from any individual or body" 336. In EC - Hormones, the Appellate Body examined the European Communities challenge of the Panel's selection and use of experts and stated that a Panel has the discretion to decide whether to seek advice from individual scientific experts or from a group of such experts, and may, in the former case, establish ad hoc rules for such consultations: "Both Article 11.2 of the SPS Agreement and Article 13 of the DSU enable panels to seek information and advice as they deem appropriate in a particular case.... We find that in disputes involving scientific or technical issues, neither Article 11.2 of the SPS Agreement, nor Article 13 of the DSU prevents panels from consulting with individual experts. Rather, both the SPS Agreement and the DSU leave to the sound discretion of a panel the determination of whether the establishment of an expert review group is necessary or appropriate. The rules and procedures set forth in Appendix 4 of the DSU apply in situations in which expert review groups have been established. However, this is not the situation in this particular case. Consequently, once the panel has decided to request the opinion of individual scientific experts, there is no legal obstacle to the panel drawing up, in consultation with the parties to the dispute, ad hoc rules for those particular proceedings."(512) 337. In US - Shrimp, the Panel received a brief from three non-governmental organizations. The complaining parties in the dispute requested the Panel not to consider the contents of the briefs submitted by the organizations while the United States urged the Panel to take into account any relevant information in the two briefs that the Panel acknowledged receiving. The Panel found that "[a]ccepting non-requested information from non-governmental sources would be, in our opinion, incompatible with the provisions of the DSU as currently applied. We therefore informed the parties that we did not intend to take these documents into consideration."(513) The Appellate Body found that the Panel had erred in its legal interpretation of Article 13 of the DSU and held that accepting non-requested information from non-governmental sources was not incompatible with the provisions of the DSU. The Appellate Body began by emphasizing the "comprehensive nature" of a panel's authority to seek information in the context of a dispute: "The comprehensive nature of the authority of a panel to 'seek' information and technical advice from 'any individual or body' it may consider appropriate, or from 'any relevant source', should be underscored. This authority embraces more than merely the choice and evaluation of the source of the information or advice which it may seek. A panel's authority includes the authority to decide not to seek such information or advice at all. We consider that a panel also has the authority to accept or reject any information or advice which it may have sought and received, or to make some other appropriate disposition thereof. It is particularly within the province and the authority of a panel to determine the need for information and advice in a specific case, to ascertain the acceptability and relevancy of information or advice received, and to decide what weight to ascribe to that information or advice or to conclude that no weight at all should be given to what has been received.
The thrust of Articles 12 and 13, taken together, is that the DSU accords to a panel established by the DSB, and engaged in a dispute settlement proceeding, ample and extensive authority to undertake and to control the process by which it informs itself both of the relevant facts of the dispute and of the legal norms and principles applicable to such facts. That authority, and the breadth thereof, is indispensably necessary to enable a panel to discharge its duty imposed by Article 11 of the DSU to 'make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements ... .' (emphasis added)"(514) 338. The Appellate Body in US - Shrimp subsequently held that the word "seek" in the phrase "seek information" should not be given an excessively "formal and technical" reading. The Appellate Body opined that given the breadth of a panel's mandate to seek information without "unduly delaying the panel process", "for all practical and pertinent purposes, the distinction between 'requested' and 'non-requested' information vanishes": "That the Panel's reading of the word 'seek' is unnecessarily formal and technical in nature becomes clear should an 'individual or body' first ask a panel for permission to file a statement or a brief. In such an event, a panel may decline to grant the leave requested. If, in the exercise of its sound discretion in a particular case, a panel concludes inter alia that it could do so without 'unduly delaying the panel process', it could grant permission to file a statement or a brief, subject to such conditions as it deems appropriate. The exercise of the panel's discretion could, of course, and perhaps should, include consultation with the parties to the dispute. In this kind of situation, for all practical and pertinent purposes, the distinction between 'requested' and 'non-requested' information vanishes.
A panel has the discretionary authority either to accept and consider or to reject information and advice submitted to it, whether requested by a panel or not. The fact that a panel may motu proprio have initiated the request for information does not, by itself, bind the panel to accept and consider the information which is actually submitted. The amplitude of the authority vested in panels to shape the processes of fact-finding and legal interpretation makes clear that a panel will not be deluged, as it were, with non-requested material, unless that panel allows itself to be so deluged.
Moreover, acceptance and rejection of the information and advice of the kind here submitted to the Panel need not exhaust the universe of possible appropriate dispositions thereof. The Panel suggested instead, that, if any of the parties wanted 'to put forward these documents, or parts of them, as part of their own submissions to the Panel, they were free to do so.' In response, the United States then designated Section III of the document submitted by CIEL/CMC as an annex to its second submission to the Panel, and the Panel gave the appellees two weeks to respond. We believe that this practical disposition of the matter by the Panel in this dispute may be detached, as it were, from the legal interpretation adopted by the Panel of the word 'seek' in Article 13.1 of the DSU. When so viewed, we conclude that the actual disposition of these briefs by the Panel does not constitute either legal error or abuse of its discretionary authority in respect of this matter. The Panel was, accordingly, entitled to treat and take into consideration the section of the brief that the United States appended to its second submission to the Panel, just like any other part of the United States pleading. ... We find, and so hold, that the Panel erred in its legal interpretation that accepting non-requested information from non-governmental sources is incompatible with the provisions of the DSU. At the same time, we consider that the Panel acted within the scope of its authority under Articles 12 and 13 of the DSU in allowing any party to the dispute to attach the briefs by non-governmental organizations, or any portion thereof, to its own submissions."(515) 339. While in US - Shrimp the Appellate Body held that panels have the authority to accept so-called amicus curiae briefs (see paragraph 338 above), in US - Lead and Bismuth II, the Appellate Body recognized that it also had the authority to accept amicus curiae briefs, albeit on a different legal basis. See paragraphs 634-639 below). 340. The Appellate Body in Japan - Agricultural Products II agreed with the Panel's finding that "[I]in deciding whether a fact or claim can...be accepted, we consider that we are called upon to examine and weigh all the evidence validly submitted to us, including the opinions we received from the experts advising the Panel in accordance with Article 13 of the DSU." The Appellate Body recalled its statement about the "comprehensive nature" of a panel's authority to engage in fact finding; however, it emphasized that a panel could not use this authority so as to relieve a complaining party of its burden of proof and the concomitant duty to make a prima facie case. With respect to this aspect of the burden of proof issue, see paragraph 285 above: 341. In Canada - Aircraft, Canada argued before the Panel that Brazil was obliged to demonstrate the existence of a subsidy and that the subsidy was contingent upon export performance. Canada submitted that it had the option of choosing to defend on either ground or both, and that if it chose defend on only one element, the Panel was then precluded from seeking information on the other element to which Canada had not raised a defence. The Panel, in a finding not reviewed by the Appellate Body, disagreed with Canada and determined: "With regard to certain measures before the Panel, Canada chose to defend itself on the issue of export contingency. Thus, Canada does not advance detailed arguments on the question of subsidization. Despite the absence of any defence on the issue of subsidization, Canada states expressly that it does not admit that the relevant measures constituted subsidies. Canada defends itself on the issue of export contingency, because it believes that the Panel will reject Brazil's claim on export contingency. However, Canada has ignored the possibility that the Panel could find in favour of Brazil on the question of export contingency. If the Panel were to find against Canada on the question of export contingency, the Panel would then be required to make findings on the subsidy issue, particularly given Canada's express statement that it does not admit that the relevant measures constitute subsidies.(516) If the Panel were prevented from seeking information on the subsidy issue because of Canada's decision not to defend itself on that issue, the basis for the Panel's findings on subsidization would be weak at best. It is for these reasons that we reject Canada's argument that a party's decision not to put in a defence on a particular issue, when that party denies or refuses to admit elements of the claim, should prevent the Panel from seeking information on that issue."(517) 342. In India - Quantitative Restrictions, the Panel consulted with the IMF on India's balance-of-payments situation. In this context, the question arose whether in the light of Article XV:2, which speaks of consultations between the CONTRACTING PARTIES and the IMF, a panel could engage in such consultations with the IMF. The United States, the complaining party, opined that the terms of Article XV:2 of GATT 1994, read as per paragraph 2(b) of the Incorporation Clause of GATT 1994 in Annex 1A of the WTO Agreement, require the WTO to consult with the IMF in specific matters, and the WTO, by definition, includes panels. India, in contrast, argued that to interpret the terms of Article XV to refer to panels meant to ignore the division of functions between the different bodies of the WTO, and that only the General Council and the BOP Committee were covered by this provision. The Panel stated: "Article 13.1 of the DSU entitles the Panel to consult with the IMF in order to obtain any relevant information relating to India's monetary reserves and balance-of-payments situation which would assist us in assessing the claims submitted to us.
... We do not find it necessary for the purposes of this case to decide the extent to which Article XV:2 may require panels to consult with the IMF or consider as dispositive specific determinations of the IMF. As will be seen in Section V.G infra, we accept in the circumstances of this case certain assessments of the IMF. In this regard, however, we note that whether or not the provisions of Article XV:2 extend to panels, the Panel has the responsibility of making an objective assessment of the facts of the case and the conformity with GATT 1994, as incorporated into the WTO Agreement, of the Indian measures at issue, in accordance with Article 11 of the DSU."(518) (b) Right to disregard information submitted 343. In US - Section 110(5) Copyright Act (Article 25.3), the Arbitrators decided to seek additional information from United States collective management organizations. One such organization submitted some of the information requested but attached a number of conditions concerning the use of that information, in particular the obligation for the Arbitrators to submit "any proposed public document" to its counsel in order for it to confirm that the confidentiality of the information submitted had been effectively protected. The Arbitrators understood that the term "any proposed public document" could actually apply to their Award. Therefore, pursuant to their Working Procedures and to general practice under public international law, the Arbitrators considered that "such a condition was incompatible with the confidentiality of their deliberations, which extends to the content of their report until it is made public". The Arbitrators also feared that such conditions, if they were to be accepted, could make access to evidence more difficult in future cases under the DSU. As a result, they decided not to use the information submitted.(519) (c) "A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate" 344. The Appellate Body in Canada - Aircraft addressed the issue of the authority of a panel to request a party to a dispute to submit information concerning that dispute. The Appellate Body stated: "It is clear from the language of Article 13 that the discretionary authority of a panel may be exercised to request and obtain information, not just 'from any individual or body' within the jurisdiction of a Member of the WTO, but also from any Member, including a fortiori a Member who is a party to a dispute before a panel. This is made crystal clear by the third sentence of Article 13.1, which states: 'A Member should respond promptly and fully to any request by a panel for such information as the panel considers necessary and appropriate.'"(520) 345. In Canada - Aircraft, Canada argued in its appeal that it was not legally bound to comply with the Panel's request to provide information relating to the disputed financing of the subject transaction. The Appellate Body held: "[W]e are of the view that the word 'should' in the third sentence of Article 13.1 is, in the context of the whole of Article 13, used in a normative, rather a merely exhortative, sense. Members are, in other words, under a duty and an obligation to 'respond promptly and fully' to requests made by panels for information under Article 13.1 of the DSU."(521) 346. See also the discussion on adverse inference in refusing to respond promptly and fully to any request by a panel in paragraphs 313-314 above. (a) "seek information from any relevant source" 347. In Argentina - Textiles and Apparel, Argentina argued on appeal, that the Panel had failed to make "an objective assessment of the matter" because it had not acceded to the request of the parties in seeking information from, and consulting with, the IMF concerning certain aspects of the statistical tax. The Appellate Body held that "[j]ust as a panel has the discretion to determine how to seek expert advice, so also does a panel have the discretion to determine whether to seek information or expert advice at all": "The DSU gives panels different means or instruments for complying with Article 11; among these is the right to 'seek information and technical advice' provided in Article 13 of the DSU. ... Pursuant to Article 13.2 of the DSU, a panel may seek information from any relevant source and may consult experts to obtain their opinions on certain aspects of the matter at issue. This is a grant of discretionary authority: a panel is not duty-bound to seek information in each and every case or to consult particular experts under this provision. We recall our statement in EC Measures Concerning Meat and Meat Products (Hormones) that Article 13 of the DSU enables a panel to seek information and technical advice as it deems appropriate in a particular case, and that the DSU leaves 'to the sound discretion of a panel the determination of whether the establishment of an expert review group is necessary or appropriate.' Just as a panel has the discretion to determine how to seek expert advice, so also does a panel have the discretion to determine whether to seek information or expert advice at all. ... In this case, we find that the Panel acted within the bounds of its discretionary authority under Articles 11 and 13 of the DSU in deciding not to seek information from, nor to consult with, the IMF."(522) 348. In Australia - Automotive Leather II, Australia argued that the United States was limited to relying on the facts and arguments set forth in its request for consultations. Australia argued that the requirement that the request for consultations "include a statement of available evidence" pursuant to Article 4.2 of the SCM Agreement, in conjunction with the expedited nature of proceedings, require a panel to limit the complaining party to using the evidence and arguments set forth in the request for consultations. The Panel held that the expedited nature of the proceedings under Article 4 of the SCM Agreement did not limit the Panel's general right to seek information: "[W]e note that panels have, under Article 13.2 of the DSU, a general right to seek information 'from any relevant source'. Indeed, it is a common feature of panel proceedings for panelists to question parties about the facts and arguments underlying their positions. There is nothing in Article 4 of the SCM Agreement to suggest that this right is somehow limited by the expedited nature of dispute settlement proceedings conducted under that provision. If Australia's position were correct, a panel might be constrained from seeking out relevant information from the party, in this case the United States, that was limited to reliance on the facts set forth in its request for consultations. Similarly, under Australia's view, the defending party might introduce information during the panel proceedings, which the complaining party, in this case the United States, would not be able to rebut, as it would be limited to reliance on the facts set forth in its request for consultations. We do not believe Article 4.2 requires this result."(523) 349. The Appellate Body in EC - Sardines rejected the claim of the European Communities that the Panel had failed to conduct "an objective assessment of the facts of the case", as required by Article 11 of the DSU. The European Communities had alleged impropriety in relation to the Panel's decision not to seek information from the Codex Commission: "Article 13.2 of the DSU provides that "[p]anels may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter." This provision is clearly phrased in a manner that attributes discretion to panels, and we have interpreted it in this vein. Our statements in EC - Hormones, Argentina - Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items ("Argentina - Textiles and Apparel ")(524), and US - Shrimp, all support the conclusion that, under Article 13.2 of the DSU, panels enjoy discretion as to whether or not to seek information from external sources.(525) In this case, the Panel evidently concluded that it did not need to request information from the Codex Commission, and conducted itself accordingly. We believe that, in doing so, the Panel acted within the limits of Article 13.2 of the DSU. A contravention of the duty under Article 11 of the DSU to make an objective assessment of the facts of the case cannot result from the due exercise of the discretion permitted by another provision of the DSU, in this instance Article 13.2 of the DSU."(526) 3. Adverse inference from a refusal to provide information 350. In Canada - Aircraft, the Appellate Body addressed the issue as to whether panels have the authority to draw adverse inferences from a party's refusal to provide information. In this dispute, Canada refused to provide Brazil with information on the financing activities of a particular agency that Brazil had requested during consultations and which was subsequently also requested by the Panel. On appeal, Brazil submitted that the Panel erred by not drawing the inference that the information withheld by Canada was adverse to Canada and supportive of Brazil's claim that the agency's debt financing was a prohibited export subsidy under Article 3.1(a) of the SCM Agreement. The Appellate Body held that it is within the discretion of panels to draw adverse inferences, and that in this particular case the Panel, in deciding not to draw adverse inferences, had not abused this discretion inconsistently with the provisions of the DSU. See paragraphs 313-314 above.
XIV. Article 14 back to top Article 14: Confidentiality 1. Panel deliberations shall be confidential.
2. The reports of panels shall be drafted without the presence of the parties to the dispute in the light of the information provided and the statements made.
3. Opinions expressed in the panel report by individual panelists shall be anonymous.
351. In Brazil - Aircraft (Article 21.5 - Canada II), Brazil strongly objected to the alleged disclosure of its confidential statements to the representatives of private parties who were not members of Canada's delegation. Brazil submitted that the alleged disclosure by Canada was a serious breach of Canada's obligations to respect the rules of confidentiality contained in Article 14 of the DSU and paragraph 3 of the Panel's Working Procedures. According to Brazil, nothing in the Panel's Working Procedures or the DSU authorizes disclosure of confidential documents to persons who are not members of a delegation. The Panel held that it did not think that Article 14 of the DSU was relevant to this issue since it "focuses on panels and their obligations in respect of confidentiality; it does not address itself to the obligations of the parties in respect of confidentiality".(527)
XV. Article 15 back to top Article 15: Interim Review Stage 1. Following the consideration of rebuttal submissions and oral arguments, the panel shall issue the descriptive (factual and argument) sections of its draft report to the parties to the dispute. Within a period of time set by the panel, the parties shall submit their comments in writing.
2. Following the expiration of the set period of time for receipt of comments from the parties to the dispute, the panel shall issue an interim report to the parties, including both the descriptive sections and the panel's findings and conclusions. Within a period of time set by the panel, a party may submit a written request for the panel to review precise aspects of the interim report prior to circulation of the final report to the Members. At the request of a party, the panel shall hold a further meeting with the parties on the issues identified in the written comments. If no comments are received from any party within the comment period, the interim report shall be considered the final panel report and circulated promptly to the Members.
3. The findings of the final panel report shall include a discussion of the arguments made at the interim review stage. The interim review stage shall be conducted within the time-period set out in paragraph 8 of Article 12.
No jurisprudence or decision of a competent WTO body.
XVI. Article 16 back to top Article 16: Adoption of Panel Reports 1. In order to provide sufficient time for the Members to consider panel reports, the reports shall not be considered for adoption by the DSB until 20 days after the date they have been circulated to the Members.
2. Members having objections to a panel report shall give written reasons to explain their objections for circulation at least 10 days prior to the DSB meeting at which the panel report will be considered.
3. The parties to a dispute shall have the right to participate fully in the consideration of the panel report by the DSB, and their views shall be fully recorded.
4. Within 60 days after the date of circulation of a panel report to the Members, the report shall be adopted at a DSB meeting(7) unless a party to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the report. If a party has notified its decision to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion of the appeal. This adoption procedure is without prejudice to the right of Members to express their views on a panel report.
(footnote original) 7 If a meeting of the DSB is not scheduled within this period at a time that enables the requirements of paragraphs 1 and 4 of Article 16 to be met, a meeting of the DSB shall be held for this purpose.
No jurisprudence or decision of a competent WTO body.
Footnotes: 479.
Appellate Body Report on India - Patents (US), para. 92. back to text |
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