DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER
8
Dispute Settlement without recourse to Panels and the Appellate Body
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8.2
Arbitration pursuant to Article 25 of the DSU
As an alternative to adjudication by panels and the Appellate Body, the parties to a dispute can resort to arbitration (Article 25.1 of the DSU). The parties must agree on the arbitration as well as the procedures to be followed (Article 25.2 of the DSU). The parties to the dispute are thus free to depart from the standard procedures of the DSU and to agree on the rules and procedures they deem appropriate for the arbitration, including the selection of the arbitrators. The parties must also clearly define the issues in dispute.
Before the beginning of the arbitration, the parties
must notify their agreement to resort to arbitration to all (WTO) Members.
Other Members may become party to an arbitration only with the agreement of
the parties engaged in the arbitration. The parties to the arbitration must
agree to abide by the arbitration award, which, once issued, must be notified
to the DSB and
the relevant Councils and Committees overseeing the agreement(s) in question
(Articles 25.2 and 25.3 of
the DSU).
The provisions of Articles 21 and 22 of
the DSU on remedies and on the surveillance of implementation of a decision
apply to the arbitration award (Article
25.4 of the DSU).
To date, in only one dispute, have the parties resorted
to arbitration under Article
25 of the DSU. The procedure was not used as an alternative to the panel
and Appellate Body procedure, but at the stage of implementation, when the
panel report had already been adopted. The parties asked the arbitrators to
determine the level of nullification or impairment of benefits caused by the
violation established in the panel report. Under the standard procedures of
the DSU, parties can obtain a binding determination of the level of nullification
or impairment by recourse to arbitration under Article 22.6 of
the DSU. A prerequisite for such
arbitration is that the complainant
has requested the DSB’s authorization for the suspension of obligations and that
the respondent disagrees with the proposed level of retaliation. In the case
where the parties resorted to arbitration under Article
25 of the DSU, they agreed that the award of the arbitrators would be final.
Recourse to Articles 21 and 22 of
the DSU is available to implement and enforce the conclusions of these arbitration
awards.
