Dispute Settlement Body Special Session (02-5382)
Original: English
Proposals on DSU by Cuba, Honduras, India, Malaysia, Pakistan, Sri Lanka, Tanzania and Zimbabwe
The following communication, dated 20 September 2002, has been received from the Permanent Mission of India on behalf of Cuba, Honduras, India, Malaysia, Pakistan, Sri Lanka, Tanzania and Zimbabwe.
During the DSU review in 1998-99, some developing-country Members contributed discussion papers and submitted proposals on sequencing, S&D provisions and other issues for improving the effectiveness of the operation of the DSU. While the views contained in the discussion papers were reflected in the document circulated by the WTO Secretariat as Job No. 4566 of 29 July 1999, the proposals were circulated separately as job documents.
Following the Doha Ministerial Declaration, the EC has made comprehensive proposals (TN/DS/W/1) on sequencing, S&D and many other issues. Australia, Costa Rica, Ecuador, Japan, Korea, Thailand and the US have also put forward proposals. We would be offering our comments on these proposals when they are taken up for detailed consideration.
We are hereby putting forth some proposals on systemic issues; we believe that these proposals will contribute to strengthening the dispute settlement system, which is “a central element in providing security and predictability to the multilateral trading system”.
Article 3.6 of the DSU requires Members to notify the DSB and other relevant WTO bodies of any mutually agreed solutions in respect of matters formally raised under the WTO dispute settlement procedures. It does not, however, prescribe any time-period by which such solutions should be notified or the details that the notification should contain.
Since the establishment of the WTO in 1995 and till 1 August 2002 Members have raised 262 disputes. Of these 78 disputes reached the panel stage (the panel/appeal process has either been completed or is in progress). Panel requests were either withdrawn or the contested measure terminated, in respect of 23 disputes. Mutually agreed solutions on 35 disputes have been notified to the DSB. In respect of the remaining over 120 disputes either the complainants must have chosen not to pursue the dispute further after consultations or the parties may have reached some understanding between them.
Though the parties are required to notify the mutually agreed solutions, the DSU does not specify as to what would happen if the parties chose not to do so. Further, there is no time-limit within which such solutions should be notified. The details such notifications should contain has also not been indicated. If the parties do not notify the mutually agreed solutions promptly and in sufficient detail, the other Members would not get the opportunity to assess the impact of such solutions on their trade.
In order to avoid such situations, the following amendment is proposed to Article 3.6 of DSU:
“6. Terms of settlement of mutually agreed solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements shall be notified within 60 days from the date of such agreement and in sufficient detail to the DSB and the relevant Councils and Committees, where any Member may raise any point relating thereto.”
The EC has submitted a comprehensive set of proposals for amendment of the DSU on 4 March 2002. One of the proposals seeks to insert a new article, viz., Article 13bis into the DSU providing for admission and acceptance of amicus curiae briefs. The proposed article reproduces, with certain modifications, the Appellate Body (AB)’s communication of 8 November 2000 (WT/DS135/9) issued for admission and submission of amicus curiae briefs in the dispute, EC – Asbestos (DS135). The EC, in support of its proposal, has stated that the DSU as interpreted by the AB “now allows the submission of amicus curiae briefs on a case-by-case basis”. Therefore, it considers that it is “necessary to define better the framework and the conditions” for allowing such briefs “in potentially all cases”.
The US in its proposals of 9 August 2002 (TN/DS/W13) has observed that “In light of the experience to date … Members may wish to consider whether it would be helpful to propose guideline procedures for handling amicus curiae submissions to address those procedural concerns that have been raised by Members, panels and the Appellate Body.”
In our view there is no need for making any provision for accepting amicus curiae briefs. It would, however, be necessary and useful to address this issue during this review. This could be done by clarifying the meaning of the word “seek” in Article 13 of the DSU, so as to clear the uncertainty and controversy surrounding this issue.
To put the issue of amicus curiae briefs in proper perspective, it may be useful to recall the background.
During the Uruguay Round negotiations, the question of providing for the possibility of amicus curiae submission in the dispute settlement system of the WTO was considered in the Informal Group on Institutional Issues. In November 1993 one delegation put forth an informal negotiating proposal to the effect that the panels may invite interested persons (other than parties or third parties to the dispute) to present their views in writing. As there was overwhelming opposition to the proposal, the proposal was not incorporated in the DSU.
After establishment of the WTO, the issue of amicus curiae briefs came up in US – Import Prohibition of Certain Shrimp and Shrimp Products dispute (DS58). The Appellate Body (AB) dealt with it for the first time as the US appealed the panel’s ruling rejecting consideration of amicus curiae briefs.
The mandate of panels and the AB is to clarify the provisions of the WTO covered agreements “in accordance with customary rules of interpretation of public international law” (Article 3.2 of the DSU). According to the AB in US – Gasoline dispute (DS2), and reiterated in subsequent disputes, Articles 31 and 32 of the Vienna Convention on the Law of Treaties (VCLT) contain these customary rules of interpretation. While Article 32 contains supplementary rules of interpretation, Article 31 of the VCLT states that provisions of an international treaty/agreement should be interpreted “in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose”.
Though there was no hierarchy between “ordinary meaning” i.e., “text” and “context”, “object and purpose”, the practice of the AB and the panels to date has been to begin their clarifications with textual interpretation by referring to the dictionary meaning of the provisions of the covered agreements. In the US – Shrimps case, however, the AB did not refer to any textual or dictionary meaning to clarify the word “seek”. Rather it referred to the “thrust” and “context” of Articles 11, 12 and 13 of the DSU to state that the word “seek” in Article 13 of the DSU could mean acceptance of unsolicited amicus curiae briefs by the panels. It held the Shrimps panel’s textual interpretation as “too literal” and “unnecessarily formal and technical”.
The AB announced in its interim ruling that it had accepted amicus curiae brief that was directly sent to it and promised to elaborate its reasoning in the final ruling. The AB, however, did not give any convincing reason for acceptance of amicus curiae briefs that were appended, but were endorsed only to the extent they concurred with, the US’ appellant submission. This approach had attracted negative comments by a large number of Members, who spoke at the DSB, meeting held on 6 November 1998 (WT/DSB/M50).
US – Bismuth Steel (DS138) is another dispute, where the AB had dealt with amicus curiae briefs. In this appeal, the AB had received amicus curiae briefs directly from the interested US steel industry associations. Though the AB did not consider those briefs as relevant to the case at hand and thus did not take them into account, it, however, asserted that it had legal authority to receive and consider such submissions as long as there was nothing in the DSU or in the Working Procedures for Appellate Review (working procedures) “explicitly prohibiting” it. It pointed out that Article 17.9 of the DSU gave it “broad authority” to draw up procedural rules. Therefore, according to the AB, it had “legal authority whether or not to accept and consider any information that we believe is pertinent and useful in an appeal.” This view of the AB was criticized by large number of Members at the DSB meeting held on 7 June 2000 (WT/DSB/M/83).
The AB did not take into consideration Members views on this substantive issue as was evident in the EC – Asbestos case. In this case, the AB took a further step of soliciting amicus curiae briefs in the name of adopting procedures to deal with the appeal. Perhaps having realised the flawed premise of its “legal authority” to accept amicus curiae briefs, the AB invoked Rule 16(1) of its working procedures to circulate to the NGOs and others a notice setting out procedures for admission and submission of amicus curiae briefs by non-parties to the dispute. Rule 16(1) is of residual nature that provides for adoption of procedures to fill the gaps in the working procedures to meet unforeseen situations that might arise in an appeal. This could not form an appropriate legal base for issuance of procedures on such a substantive and controversial issue.
This led the entire WTO Membership, excepting a few, to express dismay and disapproval of the Appellate Body developing its own working methods on an issue beyond its area of competence. This was evident at the meeting of the General Council on 22 November 2000 specially convened for the purpose, when it was widely felt that the Appellate Body needed to exercise extreme caution in future cases.
From the above it is clear that the UR negotiators had clearly rejected the idea of acceptance of unsolicited amicus curiae briefs; that neither Article 13 of the DSU, nor absence of “explicit prohibition” in the DSU or working procedures, nor Rule 16(1) could provide proper legal basis for admission and acceptance of amicus curiae briefs in the dispute settlement process.
The dispute settlement system of the WTO is of intergovernmental character. Allowing non-Members to participate and submit amicus curiae briefs would undermine this character. The Member governments raise disputes (or defend themselves) at the WTO after consulting all the domestic stakeholders and taking overall interests of the state/territory they represent. Non-governmental entities would seek to represent and advance their own sectoral interests. If such non-governmental entities were allowed to influence the process and outcome of disputes, it would severely erode the Member governments’ authority and ability to participate effectively in the dispute settlement process. Further if the Member governments are required to respond to the submissions of the amicus curiae briefs, it would add to their obligations, beyond what was negotiated. Given the requirement of responding to such submissions within a prescribed time frame it would be burdensome to developing-country Members in particular. In addition, constraints of financial resources would prevent non-governmental entities in developing countries from effectively participating in the dispute settlement process even if amicus curiae briefs are permitted. It would also be a burdensome proposition to the WTO panels, the AB, arbitrators and the Secretariat, which are required to meet strict time schedules.
It is, therefore, important to put an end to this controversy, by clarifying the meaning of the word “seek” in Article 13 of the DSU.
The New Shorter Oxford English Dictionary gives the meaning of “seek” as “ask for, demand, request” a thing or a person. Accordingly, the following two footnotes are proposed to Article 13:
“‘Seek’ shall mean any information that is sought or asked for, or demanded or requested by the panels. Unsolicited information shall not be taken into consideration by the panels.”
“Footnote 1 shall also apply to the Appellate Body and arbitrator under this Understanding.”
Article 17 of the DSU provides for the appointment of a Standing Appellate Body comprising seven persons. It is further provided in paragraph 2 of the said Article that the DSB shall appoint persons to serve on the Appellate Body for a four-year term and that each person may be reappointed once.
The present system provides for the possibility of reappointment of Appellate Body members, who express their willingness and interest in being reappointed, for a second four-year term on the basis of a decision to that effect by the Members of the WTO. The DSB can accept or reject a request for a second term by an Appellate Body member. This situation in which the Appellate Body members are dependent on the WTO Membership for getting a second four-year term is not in keeping with the dignity of the high office the Appellate Body members hold. It is also not conducive for the independence that the Appellate Body members are required to exercise in the discharge of their duties. In this connection the views of former Appellate Body member, Mr. Claus-Dieter Ehlermann are relevant. He said: “I am convinced that, on balance, the second option (non-renewable term) is the better one, if the personal independence of the term-holder is a matter of major concern. I would therefore plead for an extension of the actual four-year, once renewable term to a non-renewable term of eight years.” This view was supported by another former Appellate Body member, Mr. Florentino Feliciano while participating in the UNCTAD Workshop on Improvements and Clarifications of the DSU of the WTO on 4-5 July 2002. In order therefore to enable Appellate Body members to discharge their duties independently, WTO Members have a responsibility to ensure that the Appellate Body members, after having been appointed to their high office, are not dependent on the support of the WTO Members for securing a second term.
In order to maintain and enhance the dignity of the high office that the Appellate Body members hold, and in order to ensure that the Appellate Body members do not have to depend upon WTO Membership for securing a second term, it is proposed that all future appointments of Appellate Body members (i.e. any appointment which would be effected on or after 1 January 2004) should be for a non-renewable fixed term. It is felt that this non-renewable fixed term should be six years. This approach would promote an atmosphere conducive for impartial and independent functioning of the Appellate Body.
This proposal will not in any manner affect the terms of office of the Appellate Body members who are currently holding office. It covers only future appointments. The decision to make all future appointments for a fixed term of six years will not in anyway result in a situation where all Appellate Body members would leave at the same time. This proposal would involve an amendment to paragraph 2 of Article 17 of the DSU. In the implementation of this proposal, it shall be ensured that the Appellate Body shall be broadly representative of Membership in the WTO, as provided in Article 17.3.
The appropriateness of the Secretariat assisting panels in the light of the requirement that the Secretariat shall be neutral, needs to be examined, since the parties to the dispute do not get to see the inputs provided by the Secretariat to the panels. In certain disputes the Secretariat seemed to have provided negotiating history, which does not have the approval of the Members, to the panels and the panels would no doubt have relied on these inputs. It would be necessary to ensure that all the documents, notes, information, etc., made available by the Secretariat to the panels are given promptly to the parties to the dispute. This would enable parties to submit their views on the documents, which may be used by the panel in resolving the dispute. Accordingly the following amendment is proposed to Paragraph 10 of Appendix 3 of the DSU:
“In the interest of full transparency, the presentations, rebuttals and statements referred to in paragraphs 5 to 9 shall be made in the presence of the parties. Moreover, each party’s written submissions, including any comments on the descriptive part of the report and responses to questions put by the panel, shall be made available to the other party or parties. Any document, notes, information, etc., submitted by the Secretariat to the panel shall be given promptly to the parties to the dispute, whose views on such documents, notes, information, etc., shall be taken into consideration by the panel.”
This would contribute to enhancing transparency in the dispute settlement process.
The DSU provides for right of appeal from the panel reports. Article 17.6 of the DSU states that this appeal should be limited to “issues of law covered in the panel report and legal interpretations developed by the panel”. Article 17.13 provides that the Appellate Body may “uphold, modify or reverse the legal findings and conclusions of the panel”. Pursuant to the authority given to it by Article 17.9, the Appellate Body had drawn up the “Working Procedures for Appellate Review” (WT/AB/WP/4) (referred hereafter as “working procedures”).
As per Rule 20(2) of the Working Procedures, the Notice of Appeal should include, inter alia,
“a brief statement of the nature of appeal, including the allegations of errors in the issues of law covered in the panel report and legal interpretations developed by the panel”.
The notices of appeal being filed with the Appellate Body, though brief, normally identify sufficiently the nature of appeal and the issues of law in appeal. In a few cases, the Notices of Appeal were too brief and the appellees and the third parties could not make out as to what legal issues were in appeal. This adversely affects their right to respond adequately and defend themselves in the appeal, which has to be done in 25 days. If the Notice of Appeal is not sufficiently clear, they have to wait for the appellant’s submission for developing their response/defence. In that process, they would lose precious 10 days time, which would be onerous especially to the developing-country Members with limited resources and expertise at their disposal. Therefore, we suggest that the Appellate Body be requested to lay down guidelines on the nature of Notice of Appeals, while revising the working procedures.
An area of concern to Members is preservation and expansion of third party rights in the dispute settlement process. This issue has been addressed in the proposals submitted by the EC and Costa Rica.
Article 10.2 of the DSU provides that the third parties, which have a substantial interest in a dispute and have notified the same to the DSB, “shall have an opportunity to be heard by the panel and to make written submissions to the panel” and these submissions “shall be reflected in the panel report”. Article 17.4 of the DSU provides that the third parties “… may make written submissions to, and be given an opportunity to be heard by, the Appellate Body”.
While emphasis is on the “opportunity to be heard” in panel proceedings, “making of written submissions” appears to have been emphasized in the appeal proceedings. Further, while the first part of the above cited Article 17.4 gives the right or option to the third party to make written submission (“may make written submission”), the second part seems to be giving discretion to the AB to hear or not hear the third parties (i.e., “may … be given opportunity to be heard”). The difference in emphasis and construction of the sentence has led to the AB making subtle distinction between “third party” and “third participant” in Rules 1, 24 and 27(3) of the working procedures drawn by it. It may be noted that the expression “third participant” is not found in the DSU. Pursuant to these Rules, the AB, in some disputes, disallowed the third parties from making any oral presentation, if they did not make any written submission.
Thus the written submission would transform “third parties” into “third participants” with greater rights than the former. The third parties are, however, being allowed to participate in the AB hearings as “passive observers” just to hear and watch, if they so request. Even this limited right to attend the AB hearings is subject to non-objection by participants and third participants.
Therefore, for the sake of greater internal transparency and to enhance the rights of Members to participate in the dispute settlement process, it is proposed that Article 17.4 be modified along the lines of Article 10.2. This would necessitate the AB to modify its working procedure.