DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6
The process — Stages in a typical WTO dispute settlement case
According to Article 16.4 of the DSU, the appeal process begins when “a party to the dispute formally notifies the DSB of its decision to appeal” within the time-frame discussed above (i.e. before the DSB adopts the panel report). Rule 20(1) of the Working Procedures requires a simultaneous filing of a notice of appeal with the Appellate Body Secretariat. Rule 20(2)(d)1 of the Working Procedures requires that a notice of appeal include a brief statement of the nature of the appeal, including the allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel. The notice of appeal also becomes an official WT/DS document.
In accordance with the possible object of appellate review, these allegations of errors must relate to what the appellant wishes the Appellate Body to overturn. This can be a panel’s conclusion, including the supporting reasoning that there is or there is not a violation of the covered agreement in question. It can also be an isolated legal finding which forms part of the panel’s reasoning supporting a conclusion.
For example, the appellant can challenge a panel’s conclusion and assert that the panel erred by finding that the respondent acted inconsistently with Articles X, Y or Z. The appellant can also challenge an isolated legal finding in the panel report and assert that the panel “erred in its interpretation of Article III:2 ... in finding that ‘likeness’ can be determined purely on the basis of physical characteristics, consumer uses and tariff classification without considering also the context and purpose of Article III ... and without considering ... whether regulatory distinctions are made ... ‘so as to afford protection to domestic production’.” 2
Another matter that has come up in several appeals is whether the notice of appeal was sufficiently precise to meet the requirements set out in Rule 20(2)(d) of the Working Procedures. The Appellate Body has so far rejected all requests by appellees to dismiss appeals for being vague, ruling that it is sufficient for the notice of appeal merely to identify those panel findings or legal interpretations that the appellant believes were erroneous. The notice of appeal is not designed to be a summary or outline of the arguments of the appellant, which are to be set forth in the appellant’s submission rather than in its notice of appeal.3
However, as a matter of due process, the notice of appeal serves to give the appellee notice of the findings appealed so that it can prepare its defence.4 It is thus not necessary (nor sufficient) for the notice of appeal to cite the numbered paragraphs of the panel report containing the findings appealed, but it must be clear from the notice which panel findings or interpretations the Appellate Body is asked to review.5 Conversely, the Appellate Body would generally exclude from the scope of appellate review a finding that is not “covered” in the notice of appeal6 or a claim of error (e.g. “the panel violated Article 11 DSU”) that is not included7 in the allegations of error set out in the notice of appeal.
After the filing of the notice of appeal, the (WTO) Secretariat transmits the complete panel record to the Appellate Body Secretariat pursuant to Rule 25 of the Working Procedures. The panel record includes the written submissions of the parties to the panel, their oral statements, their written responses to questions, exhibits introduced as evidence, the interim report, the interim review comments and the tapes of the substantive meetings.
Composition of Appellate Body divisions back to top
Article 17.1 of the DSU provides that three of the seven Appellate Body members are to serve on each appeal and that the seven Members are to serve in rotation as further specified in the Working Procedures. Rule 6 of the Working Procedures calls this body of three Appellate Body members a “division”. It provides for a selection of the three Members constituting a division on the basis of rotation, taking into account the principles of random selection but regardless of national origin. This is different from panels, where persons holding the citizenship of a party or third party cannot serve, except with the agreement of the parties. Thus, Appellate Body members who are citizens of Members involved in many disputes as either parties or third parties, like the United States or the European Union, are not excluded from serving on Appellate Body divisions hearing cases involving their countries of citizenship.
The three Appellate Body members who have been selected to serve on a particular appeal elect one of them to be presiding member of that division. The presiding member coordinates the overall conduct of the appellate proceeding, chairs the oral hearing and meetings related to that appeal and coordinates the drafting of the Appellate Body report (Rule 7(2) of the Working Procedures).
Appellate review procedure back to top
No later than ten days after the date when the notice of appeal was filed, the appellant must file its written submission, setting out in detail its legal arguments as to why the panel committed a legal error and, as appropriate, the ruling the appellant requests the Appellate Body to make with regard to the contested panel findings (Rule 21(2) of the Working Procedures). Ten days may seem a short time, but an appellant is able to begin preparing its submission well before filing the notice of appeal, indeed as soon as the interim panel report is issued or in any event when the final panel report is circulated.8
Like all documents that are filed in an appeal, the appellant must serve its submission on all the other parties or third parties (Rule 18(2) of the Working Procedures).
Within 15 days from the notice of appeal, a party to the dispute other than the original appellant may join in that appeal or appeal on the basis of other alleged errors in the panel report (“other appeal” or (informally) “cross appeal”, Rule 23(1) of the Working Procedures). Within 25 days from the notice of appeal, the appellee(s) have to file their submissions in which they respond to the allegations of error made by the appellant(s). The appellees’submissions must set out in detail whether or not and for what legal reasons the appellee(s) opposes(s) the appellant’s challenge; and, in doing so, it will have to argue to what extent it agrees or disagrees with the Panel’s conclusions (Rule 22(2) of the Working Procedures).
Also with 25 days from the notice of appeal, the third participant(s) must file their written submission(s), setting forth their position and legal arguments.
Approximately 30 to 45 days after the notice of appeal, the Appellate Body division assigned to the case holds an oral hearing (Rule 27(1) of the Working Procedures), which is not open to the public (Article 17.10 of the DSU). At this oral hearing, the participants and the third participants make a brief opening statement, after which the Appellate Body division poses questions to the participants and third participants. The oral hearing is thus similar to the substantive meetings at the panel stage. The main differences between an oral hearing and a substantive meeting of the panel are: (i) there is only one oral hearing on appeal;, (ii) oral statements are kept short; (iii) an oral hearing rarely lasts longer than one full day; and (iv) the participants in an oral hearing may not ask questions directly of each other.
Deliberation of the Appellate Body and preparation of the Appellate Body report back to top
After the oral hearing, the division exchanges views on the issues raised in the appeal with the four other Appellate Body members not on the division. This exchange of views is intended to give effect to the principle of collegiality in the Appellate Body and serves to ensure consistency and coherence in the jurisprudence of the Appellate Body (Rule 4(1) of the Working Procedures). Divergent or inconsistent lines of jurisprudence that might otherwise arise would detract from the security and predictability of the multilateral trading system, which is one of the main objectives of the dispute settlement system (Article 3.2 of the DSU). Nevertheless, as prescribed by Article 17.1 of the DSU, only the assigned division may ultimately decide on the appeal (Rules 4(4) and 3(1) of the Working Procedures).
The Working Procedures also envisage that members of the Appellate Body and its divisions must make every effort to take their decisions by consensus. Where this is not possible, a majority vote takes place (Rule 3(2) of the Working Procedures). If an individual Appellate Body member includes a separate opinion in the Appellate Body report, it must be done so anonymously (Article 17.11 of the DSU).
Following the exchange of views with the other Appellate Body members, the division concludes its deliberations and drafts the Appellate Body report. After the report is finalized and signed by the Appellate Body members of the division, it is translated into the two other official languages of the WTO. All deliberations of the Appellate Body are confidential, and the drafting of the report takes place without the presence of the participants and third participants (Article 17.10 of the DSU).
In contrast to the panel procedure, there is no interim review at the Appellate Body stage.
1. Rules 20(2)(a) to (c) of the Working Procedures require several formalities, such as specifying the name and address of the party as well as identifying the panel report appealed. back to text
2. Appellate Body Report, Japan — Alcoholic Beverages II DSR 1996:I, 97 at p99-100 back to text