WTO DSB - Jurisdiction

The WTO dispute settlement system has jurisdiction over any dispute between WTO Members arising under any of the covered agreements (Article 1.1 of the DSU). The basis or cause of action for a WTO dispute must, therefore, be found in the “covered agreements” listed in Appendix 1 to the DSU, namely, in the provisions on “consultation and dispute settlement” contained in those WTO Agreements. In other words, it is not the DSU, but rather the WTO Agreements that contain the substantive rights and obligations of WTO Members, which determine the possible grounds for a dispute.

The Dispute Settlement Body (DSB)

The DSB has the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendations and authorize the suspension of obligations under the covered agreements (Article 2.1 of the DSU). The general rule is for the DSB to take decisions by consensus (Article 2.4 of the DSU). Footnote 1 to Article 2.4 of the DSU defines consensus as being achieved if no WTO Member, present at the meeting when the decision is taken, formally objects to the proposed decision. 

However, when the DSB establishes panels, when it adopts panel and Appellate Body reports and when it authorizes retaliation, the DSB must approve the decision unless there is a consensus against it (Articles 6.1, 16.4, 17.14 and 22.6 of the DSU). This special decision-making procedure is commonly referred to as “negative” or “reverse” consensus.One sole Member can always prevent this reverse consensus, i.e. it can avoid the blocking of the decision (being taken).

Panels

Panels are the quasi-judicial bodies, in a way tribunals, in charge of adjudicating disputes between Members in the first instance. They are normally composed of three, and exceptionally five, experts selected on an ad hoc basis. This means that there is no permanent panel at the (WTO); rather, a different panel is composed for each dispute. Anyone who is well-qualified and independent (Articles 8.1 and 8.2 of the DSU) can serve as panelist. The WTO Secretariat maintains an indicative list of names of governmental and non-governmental persons, from which panelists may be drawn (Article 8.4 of the DSU). WTO Members regularly propose names for inclusion in that list, and, in practice, the DSB always approves their inclusion without debate. It is not necessary to be on the list in order to be proposed as a potential panel member in a specific dispute. 

The panel composed reviews the factual and legal aspects of the case and submits a report to the DSB. If the panel finds that the claims are indeed well founded and that there have been breaches by a Member of WTO obligations, it makes a recommendation for implementation by the respondent (Articles 11 and 19 of the DSU). The WTO Secretariat is responsible for the administrative aspects of the dispute settlement procedures, as well as for assisting panels on the legal and procedural aspects of the dispute at issue (Article 27.1 of the DSU).This is necessary to achieve the DSU’s objective of providing security and predictability to the multilateral trading system (Article 3.2 of the DSU).

Appellate Body

The DSB established the Appellate Body in 1995. Unlike panels, the Appellate Body is a permanent body of seven members entrusted with the task of reviewing the legal aspects of the reports issued by panels. If a party files an appeal against a panel report, the Appellate Body reviews the challenged legal issues and may uphold, reverse or modify the panel’s findings (Article 17.13 of the DSU). In doing so, the Appellate Body also provides consistency of decisions, which is in line with the central goal of the dispute settlement system to provide security and predictability to the multilateral trading system (Article 3.2 of the DSU).The Appellate Body Secretariat provides legal assistance and administrative support to the Appellate Body (Article 17.7 of the DSU). To ensure the independence of the Appellate Body, this Secretariat is only linked to the WTO Secretariat administratively, but is otherwise separate.

Arbitrators

In addition to panels and the Appellate Body, arbitrators, either as individuals or as groups, can be called to adjudicate certain questions at several stages of the dispute settlement process. Arbitration is available as an alternative to dispute resolution by panels and the Appellate Body (Article 25 of the DSU), although it is a possibility that has so far very rarely been used. Arbitration results are not appealable but can be enforced through the DSU (Articles 21 and 22 of the DSU). Much more frequent are two  forms of arbitration thus limited to clarifying very specific questions in the process of implementation and they result in decisions that are binding for the parties:

1) after the DSB has adopted a panel (and, if applicable, an Appellate Body) report, may be called to decide on, is the establishment of the “reasonable period of time” granted to the respondent for implementation (Article 21.3(c) of the DSU).

2) the “losing” party is bound to implement the DSB rulings and recommendations and a party subject to retaliation may also request arbitration if it objects to the level or the nature of the suspension of obligations proposed (Article 22.6 of the DSU).






Source: http://www.wto.org