DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6
The process — Stages in a typical WTO dispute settlement case
If the consultations have failed to settle the dispute, the complaining party may request the establishment of a panel to adjudicate the dispute. As mentioned earlier, the complainant may do so any time 60 days after the date of receipt by the respondent of the request for consultations, but also earlier if the respondent either did not respect the deadlines for responding to the request for consultations or if the consulting parties jointly consider that consultations have failed to settle the dispute (Article 4.7 of the DSU). Where consultations do not yield a satisfactory result for the complainant, the procedure starting with the panel stage offers the complainant the possibility to uphold its rights or protect its benefits under the WTO Agreement. This procedure is equally important for the respondent as an opportunity to defend itself because it may disagree with the complainant on either the facts or the correct interpretation of obligations or benefits under the WTO Agreement. The adjudicative stage of dispute settlement is intended to resolve a legal dispute, and both parties must accept any rulings as binding (although they are always able to try to settle the dispute amicably at any time).
Establishment of a panel back to top
The request for establishment of a panel initiates the phase of adjudication. A request for the establishment of a panel must be made in writing and is addressed to the Chairman of the DSB. This request becomes an official document in the dispute in question and is circulated to the entire (WTO) membership.1 In order to be included in the agenda of a DSB meeting, the request for establishment of a panel must be filed at least 11 days in advance (Rule 3 of the Rules of Procedure). It must indicate whether consultations were held, identify the specific measures at issue, and provide a brief, but sufficiently clear, summary of the legal basis of the complaint (Article 6.2 of the DSU).
The content of the request for establishment of the panel is crucial. Under Article 7.1 of the DSU, such request determines the standard terms of reference for the panel’s examination of the matter. In other words, the request for the establishment of a panel defines and limits the scope of the dispute and thereby the extent of the panel’s jurisdiction. Only the measure or measures identified in the request become the object of the panel’s review and the panel will review the dispute only in the light of the provisions cited in the complainant’s request. In addition to determining the panel’s terms of reference, the request for establishment of the panel also has the function of informing the respondent and third parties of the basis for the complaint.2
It is thus important to draft the request for the establishment of a panel with sufficient precision so as to avoid having the respondent raise preliminary objections against individual claims or having the panel decline to rule on certain aspects of the complaint. Providing “a brief summary of the legal basis of the complaint sufficient to present the problem clearly” means that the legal claims, but not the arguments, must all be specified sufficiently in the request for the establishment of a panel. If the initial request does not specify a certain claim, the request cannot subsequently be “cured” by a complaining party’s argumentation in the written submissions or in oral statements to the panel.3 The mere listing of the articles of the agreements allegedly breached may, in the particular circumstances of the case, be sufficient to satisfy the minimum requirements of Article 6.2 of the DSU4, but this must be examined on a case-by-case basis.5 In several cases of (preliminary) objections by the respondent, panels and the Appellate Body have asked whether the respondent’s ability to defend itself was prejudiced by the alleged lack of clarity in the panel request.6
Panels have standard terms of reference, unless the parties to the dispute agree otherwise within 20 days from the establishment of the panel (Article 7.1 of the DSU). If other than standard terms of reference are agreed upon, any Member may raise any point in that respect in the DSB (Article 7.3 of the DSU).
Establishing panels is one of the functions of the DSB and is one of the three situations in which the decision of the DSB does not require a consensus. In the first DSB meeting in which such a request is made, the responding Member can still block the panel’s establishment, as was the case in the dispute settlement system under GATT 1947. At the second DSB meeting where the request is made, however, the panel will be established, unless the DSB decides by consensus not to establish the panel (i.e. the “negative” consensus rule applies (Article 6.1 of the DSU)). This second meeting usually takes place around one month later, but the complainant can also request a special meeting of the DSB within 15 days of the request, provided that at least ten days’ advance notice of the meeting is given (footnote 5 to Article 6.1 of the DSU).
The rule of negative (or reverse) consensus means that the complainant ultimately has a guarantee that the requested panel will be established if it so wishes. The only possibility to prevent the establishment is a consensus in the DSB against establishment, but this will not happen as long as the complainant is unwilling to join in that consensus. In other words, as long as the complainant, even alone and against the opposition of all other WTO Members, insists on the establishment of the panel, it is impossible for the DSB to reach a consensus against establishment. Therefore7, one speaks of a virtually automatic DSB decision to establish a panel.
Third parties before the panel back to top
The complaining and the responding Members are the parties to the disputes. Other Members have an opportunity to be heard by panels and to make written submissions as third parties, even if they have not participated in the consultations. In order to participate in the panel procedure, these Members must have a substantial interest in the matter before the panel and they must notify their interest to the DSB (Article 10.2 of the DSU).
In practice, the DSB applies a ten-day deadline from the establishment of the panel for Members to reserve their rights as third parties. At the meeting at which the panel is established, it is sufficient to do so orally. During the following ten days, the substantial interest and the desire of Members to participate as third parties must be notified to the DSB in writing through the WTO Secretariat.
There is a difference between “substantial trade interest” which is required for third parties in consultations and “substantial interest” before the panel. Most significant is the fact that it is possible to join consultations only with the respondent’s acceptance (and in the case of non-acceptance, there is no recourse to enforce participation). On the other hand, any Member who invokes a systemic interest, in practice, is admitted to a panel procedure as a third party without any scrutiny whether the interest truly is “substantial”.
Third parties receive the parties’ first written submissions to the panel and present their views orally to the panel during the first substantive meeting (Article 10.3 of the DSU). Third parties have no rights beyond these although a panel can, and often does, extend the rights of participation of third parties in individual cases.
1. The request for the establishment of a panel is also a public document, but there is no standard number for the request for establishment of a panel because the number of documents emerging from a dispute after the request for consultations (WT/DS###/1) and before the request for the establishment of a panel varies (third parties requesting to be joined to consultations, acceptance of third parties by the respondent). back to text
7. It would be contradictory, unusual circumstances aside, to request a panel and simultaneously to refrain from objecting to an attempted consensus in the DSB not to establish the panel. back to text