The process — Stages in a typical WTO dispute settlement case

6.5 Appellate review

Rules on the appellate review

The DSU does not devote many articles to the appellate review process. Except for Article 16.4 of the DSU, which refers to the notification of a party’s decision to file an appeal, Article 17 is the only article dealing specifically with the structure, function and procedures of the Appellate Body. However, several general rules in the DSU are applicable both to the panel and the appellate processes, for instance, Articles 1, 3, 18 and 19 of the DSU. In addition, the Appellate Body has adopted its own Working Procedures for Appellate Review on the basis of the mandate and pursuant to the procedure stipulated in Article 17.9 of the DSU (in this section on appellate review referred to as “Working Procedures” ¹). The Appellate Body drew up its Working Procedures for the first time in 1996, and they have been amended several times since, the last time with effect from 1 May 2003.² These Working Procedures contain the detailed procedural rules for appeals and they range from the duties and responsibilities of Appellate Body members to the specific deadlines by which submissions must be filed in an appeal. The “gap-filling” Rule 16(1) of the Working Procedures permits an Appellate Body division under certain circumstances to adopt additional procedures for a particular appeal in which the need to do so arises.

Deadline for filing an appeal  back to top

If the panel report is appealed, the dispute is referred to the Appellate Body and, for the time being, the panel report cannot be adopted by the DSB. Article 16.4 of the DSU implies that the panel report must be appealed before it is adopted by the DSB. The article does not specify a clear deadline for the filing of an appeal. Rather the appellant must notify the DSB of its decision to appeal before the adoption of the panel report. This adoption may take place, at the earliest, on the 20^th day after the circulation of the panel report and it must (in the absence of an appeal and of a negative consensus against adoption) occur within 60 days after the circulation. For any day between those limits, the adoption of the panel report can, according to Article 16.4 of the DSU, be placed on the agenda of the DSB (with ten days’ notice required for requesting items to be put on the agenda). Since the appeal must be filed before adoption actually occurs³, the effective deadline for filing an appeal is variable and could be as short as 20 days, but it can also be longer, e.g. 60 days. Thus, if the party which emerged from the panel proceeding as the “winner” wants to shorten the deadline for the other party to file an appeal, it can do so by placing the panel report on the agenda for a DSB meeting to occur on the 20^th day after the panel report has been circulated.

Right to appeal  back to top

Article 16.4 of the DSU makes clear that only the parties to the dispute, not the third parties, can appeal the panel report.  Both the “winning” and the “losing” party (i.e. more than one party) can appeal a panel report. The reason is that either party in the dispute may disagree with the panel’s conclusions: the respondent, whose challenged measure has been found to be inconsistent with the WTO Agreement or to nullify or impair a benefit, or the complainant, whose claims of violation or nullification or impairment have been rejected. In addition, a complainant, even though it may have “won” at the panel stage, may nevertheless not have been successful with all its claims, for example, if the panel only upheld two out of six claims of violation.

In addition, parties have in the past also appealed isolated panel findings they disagreed with (i.e. a legal interpretation developed by the panel), even though these findings were part of a reasoning which ultimately upheld that party’s position. For example, in the second appeal under the (WTO), in Japan — Alcoholic Beverages II, the United States appealed the panel report, even though it had been successful with its claim of a Japanese violation of Article III:2 of GATT 1994, because it disagreed with the panel’s interpretation of Article III. The United States was not aggrieved as such by the panel’s conclusion on the claim, but it had a systemic interest, reaching beyond the individual dispute, as to how Article III should be interpreted. In such a case, there could be more than one appeal on the same issue, one coming from the party having lost at the panel stage, and one from the winning party which disagrees with the reasoning.

The Working Procedures refer to two options of how multiple appeals can be filed. One option is that of one party initiating the appeal pursuant to Article 16.4 of the DSU, and, once that appellant has filed its notice of appeal and its appellant’s submission, another party, knowing the extent of, and the reasons for the challenge, joins in with its own appeal. Such an appeal would expand the overall scope of the appellate review to cover other alleged errors in the panel report (Rule 23(1) of the Working Procedures). In the Working Procedures and in Appellate Body reports, this form of appeal is called “other appeal” and informally sometimes “cross-appeal”.

The second option is that of more than one party using its right of appeal under Article 16.4 of the DSU. In that case, the Appellate Body deals with the various appeals jointly (Rules 23(4) and (5) of the Working Procedures).

If both of the two parties to a dispute challenge the panel report on appeal, each of them is, at the same time, appellant and appellee, but usually with regard to different portions of the panel report, i.e. they address different issues of law or legal interpretations covered in the panel report. The generic term for parties participating in the appeal as appellant or appellee is “participants”.

Notes:

1. These procedures should not be confused with the panel Working Procedures in Appendix 3 to the DSU.  back to text

2. Working Procedures for Appellate Review, WT/AB/WP/7, consolidated and revised version.  back to text

3. It is quite common for appeals to be notified on the very morning of a DSB meeting scheduled to adopt a panel report. If the panel report was the only item on the agenda, the DSB meeting is then cancelled.  back to text