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REPERTORY OF APPELLATE BODY REPORTS

Status of Panel and Appellate Body Reports


ON THIS PAGE:

Japan — Alcoholic Beverages II, pp. 14-15, DSR 1996:I, p. 97 at 107-108
US — Shrimp (Article 21.5 — Malaysia), paras. 107-109
US — Softwood Lumber V, para. 112
US — Oil Country Tubular Goods Sunset Reviews, para. 188
US — Stainless Steel (Mexico), paras. 158, 159-162 and footnote 309


S.8.1 Japan — Alcoholic Beverages II, pp. 14-15, DSR 1996:I, p. 97 at 107-108
(WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R)

Article XVI:1 of the WTO Agreement and paragraph 1(b)(iv) of the language of Annex 1A incorporating the GATT 1994 into the WTO Agreement bring the legal history and experience under the GATT 1947 into the new realm of the WTO in a way that ensures continuity and consistency in a smooth transition from the GATT 1947 system. This affirms the importance to the Members of the WTO of the experience acquired by the CONTRACTING PARTIES to the GATT 1947 — and acknowledges the continuing relevance of that experience to the new trading system served by the WTO. Adopted panel reports are an important part of the GATT acquis. They are often considered by subsequent panels. They create legitimate expectations among WTO Members, and, therefore, should be taken into account where they are relevant to any dispute. However, they are not binding, except with respect to resolving the particular dispute between the parties to that dispute. In short, their character and their legal status have not been changed by the coming into force of the WTO Agreement.

 

For these reasons, we do not agree with the Panel’s conclusion in paragraph 6.10 of the Panel Report that “panel reports adopted by the GATT CONTRACTING PARTIES and the WTO Dispute Settlement Body constitute subsequent practice in a specific case” as the phrase “subsequent practice” is used in Article 31 of the Vienna Convention. Further, we do not agree with the Panel’s conclusion in the same paragraph of the Panel Report that adopted panel reports in themselves constitute “other decisions of the CONTRACTING PARTIES to GATT 1947” for the purposes of paragraph 1(b)(iv) of the language of Annex 1A incorporating the GATT 1994 into the WTO Agreement.

 

However, we agree with the Panel’s conclusion in that same paragraph of the Panel Report that unadopted panel reports “have no legal status in the GATT or WTO system since they have not been endorsed through decisions by the CONTRACTING PARTIES to GATT or WTO Members”. Likewise, we agree that “a panel could nevertheless find useful guidance in the reasoning of an unadopted panel report that it considered to be relevant”.

 
S.8.2 US — Shrimp (Article 21.5 — Malaysia), paras. 107-109
(WT/DS58/AB/RW)

Malaysia also objects to the frequent references made by the Panel to our reasoning in our Report in United States — Shrimp. The reasoning in our Report in United States — Shrimp on which the Panel relied was not dicta; it was essential to our ruling. The Panel was right to use it, and right to rely on it. Nor are we surprised that the Panel made frequent references to our Report in United States — Shrimp. Indeed, we would have expected the Panel to do so. The Panel had, necessarily, to consider our views on this subject, as we had overruled certain aspects of the findings of the original panel on this issue and, more important, had provided interpretative guidance for future panels, such as the Panel in this case.

 

… we note that in our Report in Japan Taxes on Alcoholic Beverages, we stated that:

 

Adopted panel reports are an important part of the GATT acquis. They are often considered by subsequent panels. They create legitimate expectations among WTO Members, and, therefore, should be taken into account where they are relevant to any dispute.

 

This reasoning applies to adopted Appellate Body Reports as well. Thus, in taking into account the reasoning in an adopted Appellate Body Report — a Report, moreover, that was directly relevant to the Panel’s disposition of the issues before it — the Panel did not err. The Panel was correct in using our findings as a tool for its own reasoning. Further, we see no indication that, in doing so, the Panel limited itself merely to examining the new measure from the perspective of the recommendations and rulings of the DSB.

 
S.8.3 US — Softwood Lumber V, para. 112
(WT/DS264/AB/R)

Bearing [the findings in Japan — Alcoholic Beverages II and US — Shrimp (Article 21.5 — Malaysia)] in mind, and noting Article 3.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), which states that “the dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system”, we have given full consideration to the particular facts of this case and to the arguments raised by the United States on appeal, as well as to those raised by Canada and the third participants. In doing so, we have taken into account the reasoning and findings contained in the Appellate Body Report in EC — Bed Linen, as appropriate.

 
S.8.4 US — Oil Country Tubular Goods Sunset Reviews, para. 188
(WT/DS268/AB/R)

… The Panel had before it exactly the same instrument that had been examined by the Appellate Body in US — Corrosion-Resistant Steel Sunset Review; thus, it was appropriate for the Panel, in determining whether the SPB is a measure, to rely on the Appellate Body’s conclusion in that case. Indeed, following the Appellate Body’s conclusions in earlier disputes is not only appropriate, but is what would be expected from panels, especially where the issues are the same. …

 
S.8.5 US — Stainless Steel (Mexico), paras. 158, 159-162 and footnote 309
(WT/DS344/AB/R)

It is well settled that Appellate Body reports are not binding, except with respect to resolving the particular dispute between the parties. This, however, does not mean that subsequent panels are free to disregard the legal interpretations and the ratio decidendi contained in previous Appellate Body reports that have been adopted by the DSB.309

 

In US — Shrimp (Article 21.5 — Malaysia), the Appellate Body clarified that this reasoning applies to adopted Appellate Body reports as well. In US — Oil Country Tubular Goods Sunset Reviews, the Appellate Body held that “following the Appellate Body’s conclusions in earlier disputes is not only appropriate, but is what would be expected from panels, especially where the issues are the same”.

 

Dispute settlement practice demonstrates that WTO Members attach significance to reasoning provided in previous panel and Appellate Body reports. Adopted panel and Appellate Body reports are often cited by parties in support of legal arguments in dispute settlement proceedings, and are relied upon by panels and the Appellate Body in subsequent disputes. In addition, when enacting or modifying laws and national regulations pertaining to international trade matters, WTO Members take into account the legal interpretation of the covered agreements developed in adopted panel and Appellate Body reports. Thus, the legal interpretation embodied in adopted panel and Appellate Body reports becomes part and parcel of the acquis of the WTO dispute settlement system. Ensuring “security and predictability” in the dispute settlement system, as contemplated in Article 3.2 of the DSU, implies that, absent cogent reasons, an adjudicatory body will resolve the same legal question in the same way in a subsequent case.

 

In the hierarchical structure contemplated in the DSU, panels and the Appellate Body have distinct roles to play. In order to strengthen dispute settlement in the multilateral trading system, the Uruguay Round established the Appellate Body as a standing body. Pursuant to Article 17.6 of the DSU, the Appellate Body is vested with the authority to review “issues of law covered in the panel report and legal interpretations developed by the panel”. Accordingly, Article 17.13 provides that the Appellate Body may “uphold, modify or reverse” the legal findings and conclusions of panels. The creation of the Appellate Body by WTO Members to review legal interpretations developed by panels shows that Members recognized the importance of consistency and stability in the interpretation of their rights and obligations under the covered agreements. This is essential to promote “security and predictability” in the dispute settlement system, and to ensure the “prompt settlement” of disputes. The Panel’s failure to follow previously adopted Appellate Body reports addressing the same issues undermines the development of a coherent and predictable body of jurisprudence clarifying Members’ rights and obligations under the covered agreements as contemplated under the DSU. Clarification, as envisaged in Article 3.2 of the DSU, elucidates the scope and meaning of the provisions of the covered agreements in accordance with customary rules of interpretation of public international law. While the application of a provision may be regarded as confined to the context in which it takes place, the relevance of clarification contained in adopted Appellate Body reports is not limited to the application of a particular provision in a specific case.

 

We are deeply concerned about the Panel’s decision to depart from well established Appellate Body jurisprudence clarifying the interpretation of the same legal issues. The Panel’s approach has serious implications for the proper functioning of the WTO dispute settlement system, as explained above. Nevertheless, we consider that the Panel’s failure flowed, in essence, from its misguided understanding of the legal provisions at issue. Since we have corrected the Panel’s erroneous legal interpretation and have reversed all of the Panel’s findings and conclusions that have been appealed, we do not, in this case, make an additional finding that the Panel also failed to discharge its duties under Article 11 of the DSU.

 

309. We note that the mandate of an Article 21.5 panel includes the task of assessing whether the measures taken to comply with the rulings and recommendations adopted by the DSB in the original proceedings achieve compliance with those rulings. Therefore, panels established under that provision are bound to follow the legal interpretation contained in the original panel and Appellate Body reports that were adopted by the DSB.     back to text


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