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REPERTORY OF APPELLATE BODY REPORTS

Jurisdiction


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General. See also Anti-Dumping Agreement, Article 17.4 — “matter referred to the DSB” (A.3.56); Balance-of-Payments Restrictions (B.1); Legislation as such vs. Specific Application (L.1); Mandatory and Discretionary Legislation (M.1); Terms of Reference of Panels (T.6)
 


J.2.1 General. See also Anti-Dumping Agreement, Article 17.4 — “matter referred to the DSB” (A.3.56); Balance-of-Payments Restrictions (B.1); Legislation as such vs. Specific Application (L.1); Mandatory and Discretionary Legislation (M.1); Terms of Reference of Panels (T.6)     back to top

J.2.1.1 Brazil — Desiccated Coconut, p. 22, DSR 1997:I, p. 167 at 186
(WT/DS22/AB/R)

 

A panel’s terms of reference are important for two reasons. First, terms of reference fulfil an important due process objective — they give the parties and third parties sufficient information concerning the claims at issue in the dispute in order to allow them an opportunity to respond to the complainant’s case. Second, they establish the jurisdiction of the panel by defining the precise claims at issue in the dispute.

 

J.2.1.2 Brazil — Desiccated Coconut, p. 22, DSR 1997:I, p. 167 at 186
(WT/DS22/AB/R)

 

… the “matter” referred to a panel for consideration consists of the specific claims stated by the parties to the dispute in the relevant documents specified in the terms of reference. We agree with the approach taken in previous adopted panel reports that a matter, which includes the claims composing that matter, does not fall within a panel’s terms of reference unless the claims are identified in the documents referred to or contained in the terms of reference.

 

J.2.1.3 India — Patents (US), paras. 92-93
(WT/DS50/AB/R)

 

… 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. The jurisdiction of a panel is established by that panel’s terms of reference, which are governed by Article 7 of the DSU. A panel may consider only those claims that it has the authority to consider under its terms of reference. A panel cannot assume jurisdiction that it does not have. …

 

… A panel is bound by its terms of reference.

 

J.2.1.4 India — Quantitative Restrictions, paras. 84-86
(WT/DS90/AB/R)

 

This dispute was brought pursuant to, inter alia, Article XXIII of the GATT 1994. According to Article XXIII, any Member which considers that a benefit accruing to it directly or indirectly under the GATT 1994 is being nullified or impaired as a result of the failure of another Member to carry out its obligations, may resort to the dispute settlement procedures of Article XXIII. The United States considers that a benefit accruing to it under the GATT 1994 was nullified or impaired as a result of India’s alleged failure to carry out its obligations regarding balance-of-payments restrictions under Article XVIII: B of the GATT 1994. Therefore, the United States was entitled to have recourse to the dispute settlement procedures of Article XXIII with regard to this dispute.

 

Article XXIII is elaborated and applied by the DSU. The first sentence of Article 1.1 of the DSU provides:

 

The rules and procedures of this Understanding shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 to this Understanding (referred to in this Understanding as the “covered agreements”).

 

We note that Appendix 1 to the DSU lists “Multilateral Agreements on Trade in Goods”, to which the GATT 1994 belongs, among the agreements covered by the DSU. A dispute concerning Article XVIII:B is, therefore, covered by the DSU.

 

Article 1.2 of the DSU provides in relevant part:

 

The rules and procedures of this Understanding shall apply subject to such special or additional rules and procedures on dispute settlement contained in the covered agreements as are identified in Appendix 2 to this Understanding.

 

Appendix 2 does not identify any special or additional dispute settlement rules or procedures relating to balance-of-payments restrictions. It does not mention Article XVIII:B of the GATT 1994, or any of its paragraphs. The DSU is, therefore, fully applicable to the current dispute.

 

J.2.1.5 India — Quantitative Restrictions, paras. 87-88
(WT/DS90/AB/R)

 

Any doubts that may have existed in the past as to whether the dispute settlement procedures under Article XXIII were available for disputes relating to balance-of-payments restrictions have been removed by the second sentence of footnote 1 to the BOP Understanding

 

In our opinion, this provision makes it clear that the dispute settlement procedures under Article XXIII, as elaborated and applied by the DSU, are available for disputes relating to any matters concerning balance-of-payments restrictions.

 

J.2.1.6 India — Quantitative Restrictions, paras. 102-103
(WT/DS90/AB/R)

 

… Recourse to the dispute settlement procedures does not call into question either the availability or the utility of the procedures under Article XVIII:12 and the BOP Understanding. On the contrary, if panels refrained from reviewing the justification of balance-of-payments restrictions, they would diminish the explicit procedural rights of Members under Article XXIII and footnote 1 to the BOP Understanding, as well as their substantive rights under Article XVIII:11.

 

We are cognisant of the competence of the BOP Committee and the General Council with respect to balance-of-payments restrictions under Article XVIII:12 of the GATT 1994 and the BOP Understanding. However, we see no conflict between that competence and the competence of panels. Moreover, we are convinced that, in considering the justification of balance-of-payments restrictions, panels should take into account the deliberations and conclusions of the BOP Committee, as did the panel in Korea — Beef.

 

J.2.1.7 India — Quantitative Restrictions, para. 109
(WT/DS90/AB/R)

 

… we conclude that panels have the competence to review the justification of balance-of-payments restrictions. More generally, we conclude that the dispute settlement provisions of the GATT 1994, as elaborated and applied by the DSU, can be invoked with respect to any matters relating to balance-of-payments restrictions. …

 

J.2.1.8 US — 1916 Act, para. 54
(WT/DS136/AB/R, WT/DS162/AB/R)

 

We agree with the Panel that the interim review was not an appropriate stage in the Panel’s proceedings to raise objections to the Panel’s jurisdiction for the first time. An objection to jurisdiction should be raised as early as possible and panels must ensure that the requirements of due process are met. However, we also agree with the Panel’s consideration that “some issues of jurisdiction may be of such a nature that they have to be addressed by the Panel at any time”. We do not share the European Communities’ view that objections to the jurisdiction of a panel are appropriately regarded as simply “procedural objections”. The vesting of jurisdiction in a panel is a fundamental prerequisite for lawful panel proceedings. We, therefore, see no reason to accept the European Communities’ argument that we must reject the United States’ appeal because the United States did not raise its jurisdictional objection before the Panel in a timely manner.

 

J.2.1.9 US — 1916 Act, paras. 60-61
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Prior to the entry into force of the WTO Agreement, it was firmly established that Article XXIII:1(a) of the GATT 1947 allowed a Contracting Party to challenge legislation as such, independently from the application of that legislation in specific instances. While the text of Article XXIII does not expressly address the matter, panels consistently considered that, under Article XXIII, they had the jurisdiction to deal with claims against legislation as such. In examining such claims, panels developed the concept that mandatory and discretionary legislation should be distinguished from each other, reasoning that only legislation that mandates a violation of GATT obligations can be found as such to be inconsistent with those obligations. We consider the application of this distinction to the present cases in section IV(B) below.

 

Thus, that a Contracting Party could challenge legislation as such before a panel was well settled under the GATT 1947. We consider that the case law articulating and applying this practice forms part of the GATT acquis which, under Article XVI:1 of the WTO Agreement, provides guidance to the WTO and, therefore, to panels and the Appellate Body. Furthermore, in Article 3.1 of the DSU, Members affirm “their adherence to the principles for the management of disputes heretofore applied under Articles XXII and XXIII of GATT 1947”. We note that, since the entry into force of the WTO Agreement, a number of panels have dealt with dispute settlement claims brought against a Member on the basis of its legislation as such, independently from the application of that legislation in specific instances.

 

J.2.1.10 US — 1916 Act, paras. 62, 68
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Turning to the issue of the legal basis for claims brought under the Anti-Dumping Agreement, we note that Article 17 of the Anti-Dumping Agreement addresses dispute settlement under that Agreement. Just as Articles XXII and XXIII of the GATT 1994 create a legal basis for claims in disputes relating to provisions of the GATT 1994, so also Article 17 establishes the basis for dispute settlement claims relating to provisions of the Anti-Dumping Agreement. In the same way that Article XXIII of the GATT 1994 allows a WTO Member to challenge legislation as such, Article 17 of the Anti-Dumping Agreement is properly to be regarded as allowing a challenge to legislation as such, unless this possibility is excluded. No such express exclusion is found in Article 17 or elsewhere in the Anti-Dumping Agreement.

 

 

Article 17.3 does not explicitly address challenges to legislation as such. As we have seen above, Articles XXII and XXIII allow challenges to be brought under the GATT 1994 against legislation as such. Since Article 17.3 is the “equivalent provision” to Articles XXII and XXIII of the GATT 1994, Article 17.3 provides further support for our view that challenges may be brought under the Anti-Dumping Agreement against legislation as such, unless such challenges are otherwise excluded.

 

J.2.1.11 US — 1916 Act, para. 72
(WT/DS136/AB/R, WT/DS162/AB/R)

 

Nothing in our Report in Guatemala — Cement [Appellate Body Report, paras. 79-80] suggests that Article 17.4 precludes review of anti-dumping legislation as such. Rather, in that case, we simply found that, for Mexico to challenge Guatemala’s initiation and conduct of the anti-dumping investigation, Mexico was required to identify one of the three anti-dumping measures listed in Article 17.4 in its request for establishment of a panel. Since it did not do so, the panel in that case did not have jurisdiction.

 

J.2.1.12 Mexico — Corn Syrup (Article 21.5 — US), para. 36
(WT/DS132/AB/RW)

 

…We believe that a panel comes under a duty to address issues in at least two instances. First, as a matter of due process, and the proper exercise of the judicial function, panels are required to address issues that are put before them by the parties to a dispute. Second, panels have to address and dispose of certain issues of a fundamental nature, even if the parties to the dispute remain silent on those issues. In this regard, we have previously observed that “[t]he vesting of jurisdiction in a panel is a fundamental prerequisite for lawful panel proceedings.” For this reason, panels cannot simply ignore issues which go to the root of their jurisdiction — that is, to their authority to deal with and dispose of matters. Rather, panels must deal with such issues — if necessary, on their own motion — in order to satisfy themselves that they have authority to proceed.

 

J.2.1.13 Mexico — Corn Syrup (Article 21.5 — US), para. 53
(WT/DS132/AB/RW)

 

… our task is simply to determine whether the “objections” that Mexico now raises before us are of such a nature that they could have deprived the Panel of its authority to deal with and dispose of the matter. If so, then the Panel was bound to address them on its own motion. …

 

J.2.1.14 US — Carbon Steel, para. 123
(WT/DS213/AB/R, WT/DS213/AB/R/Corr.1)

 

… we have consistently held that, in the interests of due process, parties should bring alleged procedural deficiencies to the attention of a panel at the earliest possible opportunity. In this case, we see no reason to disagree with the Panel’s view that the United States’ objection was not raised in a timely manner. At the same time, however, as we have observed previously, certain issues going to the jurisdiction of a panel are so fundamental that they may be considered at any stage in a proceeding. In our view, the Panel was correct, therefore, in turning to consider its terms of reference and in satisfying itself as to its jurisdiction with respect to this matter.

 

J.2.1.15 US — Offset Act (Byrd Amendment), para. 208
(WT/DS217/AB/R, WT/DS234/AB/R)

 

… “[a]n objection to jurisdiction should be raised as early as possible” and it would be preferable, in the interests of due process, for the appellant to raise such issues in the Notice of Appeal, so that appellees will be aware that this claim will be advanced on appeal. However, in our view, the issue of a panel’s jurisdiction is so fundamental that it is appropriate to consider claims that a panel has exceeded its jurisdiction even if such claims were not raised in the Notice of Appeal.

 

J.2.1.16 Mexico — Taxes on Soft Drinks, paras. 44-46
(WT/DS308/AB/R)

 

… the issue before us in this appeal is not whether the Panel was legally precluded from ruling on the United States’ claims that were before it, but, rather, whether the Panel could decline, and should have declined, to exercise jurisdiction with respect to the United States’ claims under Article III of the GATT 1994 that were before it.

 

… We agree with Mexico that WTO panels have certain powers that are inherent in their adjudicative function. Notably, panels have the right to determine whether they have jurisdiction in a given case, as well as to determine the scope of their jurisdiction. …

 

In our view, it does not necessarily follow, however, from the existence of these inherent adjudicative powers that, once jurisdiction has been validly established, WTO panels would have the authority to decline to rule on the entirety of the claims that are before them in a dispute. To the contrary, we note that, while recognizing WTO panels’ inherent powers, the Appellate Body has previously emphasized that:

 

Although panels enjoy some discretion in establishing their own working procedures, this discretion does not extend to modifying the substantive provisions of the DSU. … Nothing in the DSU gives a panel the authority either to disregard or to modify … explicit provisions of the DSU. (emphasis added) [Appellate Body Report, India — Patents (US), para. 92]

 

J.2.1.17 Mexico — Taxes on Soft Drinks, para. 52
(WT/DS308/AB/R)

 

… The fact that a Member may initiate a WTO dispute whenever it considers that “any benefits accruing to [that Member] are being impaired by measures taken by another Member” implies that that Member is entitled to a ruling by a WTO panel.

 

J.2.1.18 Mexico — Taxes on Soft Drinks, para. 53
(WT/DS308/AB/R)

 

A decision by a panel to decline to exercise validly established jurisdiction would seem to “diminish” the right of a complaining Member to “seek the redress of a violation of obligations” within the meaning of Article 23 of the DSU, and to bring a dispute pursuant to Article 3.3 of the DSU. This would not be consistent with a panel’s obligations under Articles 3.2 and 19.2 of the DSU. We see no reason, therefore, to disagree with the Panel’s statement that a WTO panel “would seem … not to be in a position to choose freely whether or not to exercise its jurisdiction”.

 

J.2.1.19 Mexico — Taxes on Soft Drinks, para. 54
(WT/DS308/AB/R)

 

Mindful of the precise scope of Mexico’s appeal, we express no view as to whether there may be other circumstances in which legal impediments could exist that would preclude a panel from ruling on the merits of the claims that are before it. In the present case, Mexico argues that the United States’ claims under Article III of the GATT 1994 are inextricably linked to a broader dispute, and that only a NAFTA panel could resolve the dispute as a whole. Nevertheless, Mexico does not take issue with the Panel’s finding that “neither the subject matter nor the respective positions of the parties are identical in the dispute under the NAFTA… and the dispute before us”. Mexico also stated that it could not identify a legal basis that would allow it to raise, in a WTO dispute settlement proceeding, the market access claims it is pursuing under the NAFTA. It is furthermore undisputed that no NAFTA panel as yet has decided the “broader dispute” to which Mexico has alluded. Finally, we note that Mexico has expressly stated that the so-called “exclusion clause” of Article 2005.6 of the NAFTA had not been “exercised”. We do not express any view on whether a legal impediment to the exercise of a panel’s jurisdiction would exist in the event that features such as those mentioned above were present. In any event, we see no legal impediments applicable in this case.

 

J.2.1.20 Mexico — Taxes on Soft Drinks, para. 56
(WT/DS308/AB/R)

 

…We see no basis in the DSU for panels and the Appellate Body to adjudicate non-WTO disputes. Article 3.2 of the DSU states that the WTO dispute settlement system “serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements” (emphasis added). Accepting Mexico’s interpretation would imply that the WTO dispute settlement system could be used to determine rights and obligations outside the covered agreements. …

 

J.2.1.21 Mexico — Taxes on Soft Drinks, para. 57
(WT/DS308/AB/R)

 

For all these reasons, we uphold the Panel’s conclusion, in paragraphs 7.1, 7.18, and 9.1 of the Panel Report, that “under the DSU, it ha[d] no discretion to decline to exercise its jurisdiction in the case that ha[d] been brought before it”. Having upheld this conclusion, we find it unnecessary to rule in the circumstances of this appeal on the propriety of exercising such discretion.

 

J.2.1.22 Mexico — Taxes on Soft Drinks, para. 78
(WT/DS308/AB/R)

 

…Mexico’s interpretation would imply that, in order to resolve the case, WTO panels and the Appellate Body would have to assume that there is a violation of the relevant international agreement (such as the NAFTA) by the complaining party, or they would have to assess whether the relevant international agreement has been violated. WTO panels and the Appellate Body would thus become adjudicators of non-WTO disputes. As we noted earlier, this is not the function of panels and the Appellate Body as intended by the DSU.

 

J.2.1.23 EC — Selected Customs Matters, para. 166
(WT/DS315/AB/R)

 

We agree with the Panel that “there is nothing in the DSU nor in the other WTO agreements that would prevent a complaining Member from challenging a responding Member’s system as a whole or overall”. We also agree with the Panel that a challenge that a system “as a whole or overall” is WTO-inconsistent must be presented in a manner that meets the two distinct requirements in Article 6.2 of the DSU. …

 


The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.