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WTO Dispute Settlement: a Check-up

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Edited By Jacques H.J. Bourgeois, Marco Bronckers and Reinhard Quick

The dispute settlement system of the World Trade Organisation has been referred to as the jewel in the crown of the WTO. Reviewing more than
twenty years of the system’s operation, this volume takes stock by providing an in-depth analysis of key issues that have emerged. The book collects and updates papers by a group of eminent experts that were presented at an international conference at the College of Europe in Bruges. The fundamental question of whether the system is in good shape or whether changes are necessary is addressed through five themes.

Firstly, the book looks at the interpretive function of the dispute settlement system and questions whether rulings are capable of "gap-filling". Secondly, under the heading ‘Jurisdiction and Applicable Law’ we cover the thorny issue of how public international law can be integrated into the dispute resolution system. Thirdly, regarding problems associated with implementation, we ask whether the system ensures satisfactory compliance with its rules and rulings or whether financial remedies need to be added. Furthermore, through themes four and five we compare the WTO dispute settlement system with the dispute settlement system contained in the Free Trade Agreements, as well as the investor-state arbitration system (ISDS). We investigate how these two different systems can influence each other and learn from one another. With respect to the reform debate on ISDS, for example, the question was raised whether the WTO dispute settlement system could be considered as a model for such a reform.

This review comes to the conclusion that the system is functioning, if not perfectly, at least reasonably well. Where problems are identified, solutions are suggested to improve the system.

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Jurisdiction and Applicable Law in the WTO (Lorand Bartels)

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Jurisdiction and Applicable Law in the WTO

Lorand BARTELS1

1. Introduction

This chapter considers the law applicable by WTO panels and the Appellate Body in dispute settlement proceedings. It begins by explaining how law is applied to facts, and how this is relevant to the exercise of jurisdiction by WTO panels and the Appellate Body. It then looks at several discrete sets of legal questions, both jurisdictional and merits, in which questions related to applicable law arise.

The jurisdictional questions, broadly speaking, that are considered concern the power of panels to determine the legality of their establishment, the power of panels to determine whether other preconditions to the exercise of their jurisdiction have been met, including what is elsewhere termed “admissibility”. The merits questions concern the law applicable to the proper identification of the facts and to the law applicable to these facts, based on the various overlapping provisions in the DSU pertaining to these matters, and taking into account the possible role of non-WTO law.

In addressing these questions, this chapter adopts a quite particular understanding of the legal process by which rules are applied to facts. In brief, this understanding is that every legal rule is based on a description of certain hypothetical facts and can be applied to any given “fact”, no matter how remote it might appear to be to the facts described in the rule, and the result will necessarily generate a binary outcome. Either the “fact” falls within the set of “facts” described by the rule, or it will not. There is no third option.2

It is important to distinguish this sense of rule application from a second sense, in which a rule is said to “apply” to a given “fact” when it is relevant to that fact. Actually, what this second sense of the word “apply” means is ← 31 | 32 → that the “fact” has a reasonable prospect of falling within the set of facts described by the rule. Thus, on this second meaning, one might say that a rule about vehicles does not “apply” to dogs, because there is no chance that a dog might be a vehicle, whereas it might “apply” to skateboards or tanks on plinths.3 Both senses follow normal linguistic usage.4 However, it can also be seen that this second sense of “apply” is no more than an informal means of saying that there is a very low probability, perhaps even zero, that a rule will “apply” to a fact in the first sense of the word “apply”. Essentially, this prejudges the issue. After all, one cannot ex ante exclude the possibility that a dog might be a vehicle too.

A second preliminary point should also be made, concerning the nature of “facts” for the purpose of a rule-fact relationship. The view is adopted here that, for this purpose, “facts” can include not only “brute facts”, such as things or conduct,5 but also “institutional facts”,6 such as rules, or legal determinations. At a greater level of abstraction, one can conceive of “facts” for these purposes as the minor term in any legal formula (whether, for definitional facts, this is in the form of a syllogism or whether, for rules setting out a legal consequence, this is in the form of an “if-then” propositional formula) in which the major term is the rule, and the conclusion is a binary legal outcome that depends on whether the “fact” at issue is within the set of hypothetical “facts” described in the rule.

Third, it is assumed in this chapter that the question whether, and how, a panel or the Appellate Body applies rules to facts is properly seen in terms of their jurisdictional powers. Nonetheless, certain distinctions can be drawn. First, panel and the Appellate Body applies primary rules to “facts” when this is the primary question before them, and for this purpose primary questions may be jurisdictional or merits based.7 Second, it is ← 32 | 33 → necessary, subject to any contrary applicable rule, to determine whether a given primary rule is applicable, and this question is determined by applying relevant rules on the applicability of that primary rule, which is to say, a “metanorm”, to that primary rule (which functions as a “fact” for this purpose).8 Third, legal “facts” are often, though not necessarily, established by reference to the legal conclusions resulting from the application of other rules, including rules from other legal systems, to a given “fact”, which may be of a different nature.

The following illustrates the implications of this approach to applicable law in terms of questions of the jurisdiction of WTO panels and the Appellate Body. The key questions in each case concern the identification of the primary “law” that is to be applied to the “facts” at issue, the “law” that determines whether and, if so, how that primary “law” can be applied to those “facts” in the case at hand, how “facts” with a legal dimension are to be ascertained, and the power of WTO panels and the Appellate Body and (where relevant) the Dispute Settlement Body, to deal with these issues.

2. Jurisdictional questions

2.1 Introduction

At the jurisdictional stage, broadly speaking, applicable law issues arise in relation to questions concerning the proper establishment of a panel, questions concerning the satisfaction of any preconditions – whether set out in WTO law or otherwise – that must be satisfied before a panel or the Appellate Body can exercise jurisdiction, and questions concerning the substance of any questions arising before panels and the Appellate Body. An initial question concerns the scope of a panel’s (or the Appellate Body’s) compétence de la competence to determine such questions. As the ICJ said in Nottebohm, every international tribunal has “the right to decide as to its own jurisdiction”.9 For its part, the Appellate Body has confirmed that it applies the same principle applies in WTO law.10 ← 33 | 34 → However, the ICJ added that this is “in the absence of any agreement to the contrary”.11 Moreover, there are other reasons why a panel or the Appellate Body might not be able to determine such questions.

2.2 Proper establishment of a panel

WTO panels are established by a decision of the Dispute Settlement Body under Article 6.1 DSU.12 This raises the question whether a panel is competent to review that decision.

The Appellate Body has said that “[a]s a panel request is normally not subjected to detailed scrutiny by the DSB, it is incumbent upon a panel to examine the request for the establishment of the panel very carefully to ensure its compliance with both the letter and the spirit of Article 6.2 of the DSU”.13 But this rather broad statement must be qualified. Formally speaking, if a panel request does not comply with the conditions set out in Article 6.2, the result is that the DSB’s decision to establish a panel under Article 6.1 is ultra vires. What the Appellate Body must have meant is that a panel must confine its terms of reference, established under Article 7, to legal claims and measures set out in a valid panel request under Article 6.2. The Appellate Body put the matter more accurately in EC – Certain Customs Matters when it said:

Pursuant to Article 7.1 of the DSU, a panel’s terms of reference are governed by the request for the establishment of a panel. In other words, the panel request identifies the measures and the claims that a panel will have the authority to examine and on which it will have the authority to make findings.14

But this still does not answer the question whether a panel may consider the legality of the DSB decision under Article 6.1 under which it is established. As foreshadowed, there is a good reason why panels should not have such a power. This is because of the logical paradox that a panel that is not properly established cannot determine anything, including whether it was properly or improperly established, while a panel that is properly established cannot logically determine that it not is properly established.15 ← 34 | 35 → Hence, logically speaking, a panel enquiring into whether it is properly established is only able to determine that it is properly established, which is a predetermined result. In short, a panel can entertain the question whether it is properly established, but because the result of such a question is predetermined, it should not entertain this question.

It might be objected that a panel must have a separate jurisdiction to consider whether it is properly established, just as international commercial arbitration tribunals typically have the power to determine the legality of their establishment. However, in theoretical terms, these tribunals only have such a power because they are ultimately governed by a supervening legal system capable of authorizing such a power.16 This is quite different in international law, as it is for superior domestic courts.17 So, for instance, ICSID tribunals have no power to consider whether the decision of the ICSID Secretary-General to register a request for arbitration is valid,18 and, despite some decisions to the contrary, at least some international criminal tribunals have come to the same conclusion.19

The same view has been taken in WTO jurisprudence. In Australia – Automotive Leather Australia argued that a panel was improperly ← 35 | 36 → established on the grounds that the panel’s terms of reference overlapped with those of a pre-existing panel on the same issue. The Panel responded to this as follows:

The establishment of a panel is the task of the DSB. It is by no means clear that, once the DSB has established a panel […] the panel so established has the authority to rule on the propriety of its own establishment. Nothing in our terms of reference expressly authorizes us to consider whether the DSB acted correctly in establishing this Panel.20

What, then, can be done about an invalidly established WTO panel? There are two options. First, the Appellate Body can decide on the validity of a DSB decision establishing a WTO panel. This would not be a question for the merits, but rather a preliminary question as to whether the conditions for the exercise of the Appellate Body’s own jurisdiction under Article 17.6 have been established. This jurisdiction is dependent on the existence of valid panel legal determinations, which in turn depends upon such determinations having been made by a validly established panel.

Second, and perhaps somewhat more controversially, it is possible that the DSB is able to make legal determinations on decisions that it adopts under Article 6.1. This question has in fact arisen in a DSB meeting on Australia’s request for a panel in Australia – Tobacco Plain Packaging in which Australia argued that the phrase “the DSB meeting following that at which the [panel] request first appears as an item on the DSB’s agenda” in Article 6.1 meant the next meeting following that first meeting, not any meeting following that first meeting.21 Many WTO members doubted that the DSB was competent to determine this issue, on the grounds that the DSB had no power to make any interpretation of Article 6.1. The primary concern was that if the DSB had the power to make such an interpretation, it would have to be by positive consensus, and this would permit a respondent to hold up the establishment of a panel. In contrast, the United States took the view that a decision to treat a non-consecutive meeting as a second meeting under Article 6.1 was necessarily an interpretation of that same provision.22

As a theoretical matter, the United States was correct. The DSB necessarily interprets the DSU every time it makes a decision, and this is because it is not possible to apply a rule to a fact (in casu by making a decision authorized by that rule) without at least implicitly interpreting ← 36 | 37 → it.23 But, it is submitted, this does not lead to the consequence feared by other WTO members. This is because the question whether there is an implicit or an explicit interpretation should be decided by the same procedure. Thus if an implicit interpretation is to be adopted by means of reverse consensus, the same should apply for an explicit interpretation. The result is that an explicit interpretation of Article 6.1 can be adopted by reverse consensus.24 In principle, then, the DSB should not be precluded from determining whether its own decision under Article 6.1 is – or would be – valid. Indeed, one might say that it has a duty to do so.

2.3 Preconditions to the exercise of jurisdiction

2.3.1 Introduction

A validly established tribunal may still be unable to exercise jurisdiction if certain preconditions have not yet been satisfied. In many international judicial systems, an important precondition is an act of consent by the parties to the exercise of jurisdiction by the tribunal on a particular matter. No such precondition is necessary in the WTO, given that WTO members have ipso facto consented to the compulsory jurisdiction of panels and the Appellate Body.

There are however certain other conditions that need to be satisfied prior to the exercise of jurisdiction by a panel and the Appellate Body. Some are established by WTO law. Thus, a panel must be validly composed, and an appeal must be lodged by a valid Notice of Appeal. In addition, there is the possibility that there is a reason external to WTO law that precludes the exercise of jurisdiction by a panel or the Appellate Body, a condition commonly treated under the heading of “admissibility”. Each of these conditions has arisen in WTO dispute settlement proceedings.

2.3.2 Internal preconditions

2.3.2.1 Composition of panels

According to Article 8.7, decisions to compose a panel are taken by agreement of the parties or else by decision of the WTO Director-General. In principle, there is no reason why a panel cannot review preconditions to the exercise of its jurisdiction, and indeed a panel has a duty to do so.25 However, it is different in the case of composition, and this is because the ← 37 | 38 → same logical paradox that affects a panel’s ability to determine whether it is properly established, discussed above, affects its ability to determine whether it is properly composed.

This is confirmed by WTO jurisprudence. Three panels dealing with panel composition have denied that they can consider the validity of the decision to compose the panel.26 In an appeal on the last of these, the Appellate Body agreed. It stated that:

In our view, Article 8.7 confers on the Director-General the discretion to compose panels, which was properly exercised in this case. We therefore find that the Panel did not err in refraining […] from making a finding on whether it was improperly composed.27

In fact, it is irrelevant whether the Director-General has a discretion to compose panels, but the result is nonetheless correct, for the reasons stated. On the other hand, the Appellate Body would be able to make such a determination, as it indeed did here. This is for the same reason as noted above in relation to the validity of the establishment of a panel, namely that might be necessary for the Appellate Body to determine in the context of determining whether it has jurisdiction itself.

2.3.2.2 Notices of appeal

Under Article 17.6 the Appellate Body’s jurisdiction is “limited to issues of law covered in the panel report and legal interpretation developed by the panel”. Under the Appellate Body’s Rules of Procedure, these issues are to be set out in a Notice of Appeal which must contain “a brief statement of the nature of the appeal, including “a list of the legal provision(s) of the covered agreements that the panel is alleged to have erred in interpreting or applying”.28 However, the Appellate Body has refrained from treating the submission of a valid notice of appeal as a jurisdictional condition. Rather, the Appellate Body has preferred to see a valid notice of appeal in due process terms.29

For present purposes, it is to be noted that this has implications for the substance of the Appellate Body’s jurisdiction in any given matter. If ← 38 | 39 → its jurisdiction is not formally limited to the claims made by one or more of the parties, other than to the extent that due process would be denied, then it follows that any Appellate Body determinations on legal issues in a panel report are limited solely by the scope of those legal issues that arise in a panel report and, separately, by the principle non ultra petita, according to which a tribunal may not make determinations that it has not been requested to make.30

2.3.3 External conditions (admissibility)

Whether a properly established (and composed) panel should exercise jurisdiction raises different issues. This question may be conceptualized in terms of the question whether there is an uncodified rule according to which that a panel should not exercise jurisdiction. Elsewhere in international law, this question is typically under the heading of “admissibility”. As the ICJ has said:

Objections to admissibility normally take the form of an assertion that, even if the Court has jurisdiction and the facts stated by the applicant State are assumed to be correct, nonetheless there are reasons why the Court should not proceed to an examination of the merits.31

There are many types of unwritten admissibility conditions, and these may also of course be codified. Some can also be subject to an express derogation, for example the rule on the exhaustion of local remedies.32 A special type of admissibility condition concerns the conduct of a party to dispute settlement proceedings. In principle, a party may be estopped from exercise its rights to dispute settlement due to its conduct.33 Can this type of condition be subject to a derogation?

This question arose in Mexico – Soft Drinks.34 In this case the Appellate Body was asked by the respondent to rule that the Panel should have declined to exercise jurisdiction on the basis of the clean hands principle, according to which a party may be precluded from exercising its dispute settlement rights as a result of previous illegal conduct (the rule is a relative ← 39 | 40 → of a simple estoppel).35 The Appellate Body declined to accede to the respondent’s request, on the grounds that to do this would diminish the dispute settlement rights of a WTO member under Articles 3.3 and 23, and therefore a decision to this effect would violate the panel’s obligation not to “diminish” the rights of WTO members under Article 19.2.36

What, then, does it mean for a WTO organ to “add to” or to “diminish” valid WTO “rights and obligations”? It is suggested that this will occur when WTO rights and obligations are overridden – and therefore disapplied – by virtue of a non-WTO rule. This does not happen when a WTO norm is disapplied because of a contrary WTO rule (e.g. a WTO exception). This is because Article 19.2 does not prevent any individual WTO right or obligation from being disapplied. The use of the plural is significant; Article 19.2 protects all WTO rights and obligations seen as a package. And disapplying a valid WTO norm because of a contrary non-WTO right does diminish those rights and obligations, seen both singly and together.

The Appellate Body can be understood as saying that the DSU overrode the admissibility condition that was advanced by the respondent, while leaving open the possibility that there may still be a “legal impediment” to the exercise of jurisdiction in other cases. It has now emerged more clearly that such an impediment will exist when proceedings are brought contrary to good faith, in violation of Articles 3.7 and 3.10.37 But does it go further than this? Could, for example, the exercise of jurisdiction by a WTO panel or the Appellate Body, as organs of the WTO,38 violate or contribute to a violation of international law,39 be considered such ← 40 | 41 → an “impediment” as well? This might occur, for example, if a panel or the Appellate Body, ignoring the indispensable third parties rule, made a legal determination that infringed the rights of states that had not consented to their jurisdiction. It now appears clear that, other than if a claim having this result is considered not to have been brought in good faith, this possibility is preluded.40 In short, Article 19.2 governs the application of all non-WTO law, even in jurisdictional cases.

2.3.4 Applicable law in relation to jurisdictional questions

It follows from the foregoing analysis that panels and the Appellate Body are not competent to determine all internal issues relating to their exercise of jurisdiction, or else the Appellate Body has chosen not to consider what might be considered a precondition to the exercise of its jurisdiction not to be such a condition. However, the Appellate Body is able to determine the validity of the establishment and composition of a panel, and panels and the Appellate Body are certainly able to determine other issues relating to the exercise of their jurisdiction.

Where such questions arise, and panels and the Appellate Body are competent to answer them, there are several sources of law that these bodies can – and must – apply. Jurisdictional questions arise at the level of the DSU, which takes priority over any conflicting WTO rules, so it is not logically possible for a panel or the Appellate Body to resolve these questions by applying WTO rules other than those under which these bodies purportedly have jurisdiction (e.g. Articles 7, 11 and 17). However, this does not mean that these provisions are the only applicable provisions. In order to determine whether these provisions are valid and applicable, WTO panels and the Appellate Body would have to apply rules of international law governing these provisions. In fact, as discussed, Article 19.2 precludes them from applying such metanorms. On the other hand, in order to determine whether these provisions apply to the facts at issue (namely, a “matter” or valid “appeal”), it might be necessary to make legal determinations based on other legal systems. So, for example, ICSID investment tribunals apply domestic law to determine whether there has been an “investment” or whether a claimant has a relevant “nationality”. It cannot be excluded that similar questions might arise in the WTO, for example, if it is alleged that a given respondent is not a WTO Member. To date, however, such questions have not arisen. ← 41 | 42 →

2.4 Material scope of jurisdiction

Probably the most obvious jurisdictional questions are whether a claim is within the terms of reference of a panel, or within the scope of an appeal to the Appellate Body,41 whether a panel (or conceivably the Appellate Body) has failed to determine an issue before it in violation of Article 7.2, which states that “[p]anels shall address the relevant provisions in any covered agreement/s cited by the parties to the dispute”,42 or whether a panel has discharged its duty under Article 11 (discussed below). From the perspective of applicable law, these questions are resolved relatively straightforwardly according to the relevant WTO provisions.

More complicated, from this perspective, are those jurisdictional questions that depend upon the application of rules that are not expressly set out in the DSU, such as whether a panel (or conceivably the Appellate Body) has made a determination on matters outside the scope of its jurisdiction in violation of the principle non ultra petita, or whether due process has been observed.43 It may be thought that such questions involve the application of rules of “international procedural law”.44 However, the better view might be that such rules are internal to the WTO, and are devised and applied by panels and the Appellate Body in the exercise of their powers to conduct proceedings, especially taking into account the injunction in Article 3.3 that the WTO dispute settlement system “serves to preserve the rights and obligations of Members under the covered agreements”.45 On this view, the rules ← 42 | 43 → of “international procedural law” are no more than an inspiration for endogenous WTO procedural rules.

3. Jurisdiction on the merits

3.1 Introduction

As a matter of legal theory, one can say that the primary function of a panel and the Appellate Body is to apply the relevant law, set out in the covered agreements, to the relevant facts, a process of simple subsumption. But to do so inevitably, even if implicitly, requires three prior determinations: the first is to identify the relevant facts (a function that is limited to panels); the second is to identify the relevant law; and the third is to determine the “applicability” of that relevant law to the relevant facts. The following discusses the way that these three prior determinations may be made, in light of Articles 7.1 and 11 and existing WTO jurisprudence.

3.2 The “matter”

The substantive jurisdiction of panels is set out in Article 11 and in specific panel terms of reference adopted in accordance with Article 7. Article 11 states that:

[a] panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of [the relevant covered agreements to the facts of the case] and [the] conformity [of the facts of the case] with the relevant covered agreements.46

Standard terms of reference47 are described in Article 7.1 as follows:

To examine, in the light of the relevant provisions in (name of the covered agreement/s cited by the parties to the dispute), the matter referred to the ← 43 | 44 → DSB by (name of party) in document DS/… and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in that/those agreement/s.

The Appellate Body has explained that the “matter”, for the purposes of Article 7.1, comprises the legal claims and measures set out in that panel request.48 A panel’s terms of reference are therefore dependent on the panel request, which explains why any aspects of a panel request that are invalid are to be treated as severed from the resulting panel’s terms of reference. As the Appellate Body has said, “Article 6.2 of the DSU lays out the key requirements for a panel request and, by implication, the establishment of a panel’s terms of reference under Article 7.1 of the DSU”.49 However, there is another problem. If the “matter” already includes the “relevant provisions [of the covered agreements] cited by the complainant”, then it makes no logical sense to apply these provisions to themselves. The problem could perhaps be avoided if the “matter” in Article 7.1 (as opposed to the “matter” in Article 11) were read as meaning simply the facts of the matter, as opposed to the law of the matter.

3.3 Identifying the facts

How to determine the facts of the matter is not straightforward. Article 13 and Appendix 4 give panels the power to seek information from sources they consider appropriate, and special provisions such as Annex V of the SCM Agreement establish certain procedures for providing evidence. The appropriate standard of review derives from Article 11,50 and Panel Working Procedures can also set out certain matters relevant to evidentiary issues. However, beyond this there are no detailed WTO rules of evidence, per se. On what basis, then, can such rules be established? Georges Abi-Saab has proposed that rules “[one] has to go to the general principles of international procedural law which govern the exercise of ← 44 | 45 → the judicial function”.51 However, in practice, the WTO Appellate Body has at most borrowed such rules from such general principles of law;52 it has not, however, strictly speaking, applied such rules directly to the facts at issue. This can be justified on several grounds. One is, as with the burden of proof, to identify the formal source of such rules as Article 11. Another is to find the authority of panels to establish evidentiary rules in their inherent power to make determinations on the matters before them or, perhaps, as powers implied in the provisions establishing their duty to make such determinations.

3.4 Identifying the relevant law: the role of the parties to the dispute

Article 7.1 requires a panel to examine the “matter” “in the light of the relevant provisions […] cited by the parties to the dispute”. In contrast, Article 11 states that a panel is required to determine the “[the] conformity [of the facts of the case] with the relevant covered agreements”, without any reference to the role of the “parties to the dispute”. This raises an interesting question, which is the extent to which Article 11 authorizes, and perhaps even requires, a panel to apply “relevant” parts of the covered agreements even if this has not been cited by the “parties to the dispute” as required by Article 7.1.

Practice varies on this question. In US – Gambling, the Appellate Body said:

In the context of affirmative defences […] a responding party must invoke a defence and put forward evidence and arguments in support of its assertion that the challenged measure satisfies the requirements of the defence. When a responding party fulfils this obligation, a panel may rule on whether the challenged measure is justified under the relevant defence, relying on arguments advanced by the parties or developing its own reasoning. The same applies to rebuttals. A panel may not take upon itself to rebut the claim (or defence) where the responding party (or complaining party) itself has not done so.53

In other words, if, for whatever reason, a party does not mount or rebut a defense, a WTO panel may very well know the law,54 but it not ← 45 | 46 → only has no duty to apply the law,55 but it is even unable to apply that law. Effectively, this means reading the phrase “relevant covered agreements” in Article 11 as a reference to the covered agreements, and their provisions, that are cited by the parties to the dispute.

On the other hand, a more expansive interpretation of Article 11 is evidenced by those disputes for which the panels’ terms of reference do not include any mention of the respondent party to the dispute. Such terms of reference, where the phrase “parties to the dispute” in Article 7.1 is replaced by the name of the complainant(s), were standard in the first decade and a half of the WTO’s existence. For example, the terms of reference of the panel in US – Gasoline were:

To examine, in the light of the relevant provisions of the covered agreements cited by Venezuela in document WT/DS2/2 and by Brazil in document WT/DS4/2, the matters referred to the DSB by Venezuela and Brazil in those documents and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.56

Since 2009, however, terms of reference retain the term “parties to the dispute”, as follows:

To examine, in the light of the relevant provisions in the covered agreements cited by the parties to the dispute, the matter referred to the DSB by the United States, Japan and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu in document WT/DS375/8, WT/DS376/8 and WT/DS377/6, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.57

According to the United States in EC – Hormones “[t]he objective [of this wording] was to make it possible for a defending party to ‘cite’ agreements additional to those cited by the complaining party, and to have the panel apply all agreements cited by both sides”.58 Textually, however, the phrase “relevant provisions in the covered agreements cited by the parties to the dispute” in Article 7.1 can also be read as referring to any provisions in the covered agreements that are cited by the parties ← 46 | 47 → to the dispute, including exceptions cited by the respondent. Where the respondent is mentioned in the terms of reference, this explains why a panel might be limited to provisions that are cited by the parties, according to US – Gambling.

However, the question remains how a panel could consider such provisions if its terms of reference are limited to WTO law cited by the complainant. One answer might be that, under Article 11, a panel can apply an exception to the facts as a part of a “relevant covered agreement” even if that exception does not appear in the panel’s terms of reference. This would mean that whereas the Article 7.1 limits the applicable law to provisions cited by the parties (even if only one), Article 11 allows, and perhaps requires, a panel to apply provisions of the covered agreements that it considers are “relevant”. However, such a reading is not consistent with the Appellate Body’s statement in US – Gambling.

3.5 The applicability of the cited relevant agreements

The next preliminary task for a panel or the Appellate Body seeking to apply the identified relevant provisions of the covered agreements to the established facts is to ensure that these agreements are “applicable”. For a panel, this task is to be concluded in accordance with Article 11.

If one accepts that a rule is “applied” to a fact regardless of the likely outcome, as explained above, then a determination as to “the applicability of [the relevant covered agreements to the facts of the case]” concerns reasons external to that rule such that the rule cannot be applied to the facts at issue. In theory, there are several such reasons. One is that a rule is invalid (invalidity); another is that a rule cannot be applied because of a supervening norm (conflict); and a third is that a rule cannot be applied because of the conduct of one of the parties (good faith). In each case, the primary norm at issue is inapplicable as a result of the application to it of a meta-norm.

Aside from the considerations discussed above in relation to terms of reference under Article 7.1, it is uncontroversial that panels and the Appellate Body are able to make determinations that a WTO norm is not applicable to the facts at issue for a reason set out in WTO law, such an express exception.59 For example, Article XX GATT states that “nothing in this agreement shall be construed to prevent [the adoption or enforcement of measures for certain legitimate reasons]”. This provision, ← 47 | 48 → and specifically the phrase “nothing in this agreement”, has the effect of rendering inapplicable any otherwise applicable rule, most obviously an obligation.60

More complicated is the question whether panels (and therefore the Appellate Body) are able to make such a determination based on non-WTO law, which in practice means the non-applicability rules discussed above. In principle, there should be no obstacle to making such a determination, subject to the condition, noted above, that in so doing panels and the Appellate Body do not add to or diminish WTO rights and obligations in contravention of Article 19.2. If one reads this injunction not to “diminish” WTO rights and obligations so as to ensure that these rights and obligations are not disapplied, which reflects WTO practice, this effectively removes the possibility of applying non-WTO law when it would have this effect. This is also borne out in practice, where WTO panels and the Appellate Body have refrained from applying non-WTO non-applicability norms.61 Some contrary examples, such as the application of the non-applicability rule in Article 28 of the Vienna Convention on the Law of Treaties, can be explained on the basis that the Appellate Body thought (wrongly) that this was merely a rule of interpretation.62

This restriction on the application of non-WTO law with the effect of disapplying WTO law should not however be taken to mean that non-WTO law can never be applied in the exercise of a panel’s (and Appellate Body’s) jurisdiction. There is in fact a cardinal distinction between applying non-WTO law rules on the applicability of WTO law, which would diminish WTO rights and obligations, and applying non-WTO rules to anterior issues that require determination in order to determine whether there has been a violation of WTO law. Such legal operations fall within the category of the panel’s (and Appellate Body’s) choice of “legal reasoning”, which the Appellate Body has made clear can be developed independently of any arguments made by the parties. In EC – Hormones it said:

Panels are inhibited from addressing legal claims falling outside their terms of reference. However, nothing in the DSU limits the faculty of a panel freely to use arguments submitted by any of the parties – or to develop its own legal reasoning – to support its own findings and conclusions on the matter under its consideration. A panel might well be unable to carry out an ← 48 | 49 → objective assessment of the matter, as mandated by Article 11 of the DSU, if in its reasoning it had to restrict itself solely to arguments presented by the parties to the dispute.63

This reflects the ICJ’s approach in Arrest Warrant, when the ICJ stated that the non ultra petita principle “[does] not mean […] that the Court may not deal with certain aspects of that question in the reasoning of its Judgment, should it deem this necessary or desirable.”64 It is evident from this case (and others) that the central question concerns the ability of a tribunal to make legal determinations that are logically necessary for a determination on the question at issue.

It is in this context that one should understand the many determinations made by WTO panels and the Appellate Body concerning non-WTO law, such as the ruling of the panel in Turkey – Textiles to the effect that the EC-Turkey customs union had no legal personality,65 the ruling of the Appellate Body in Brazil – Retreaded Tyres that “Article 50(d) of the Treaty of Montevideo […] show[s], in our view, that the discrimination associated with the MERCOSUR exemption does not necessarily result from a conflict between provisions under MERCOSUR and the GATT 1994”66 and the Appellate Body’s determination in EC – Bananas III that various acts, such as “the allocation of tariff quota shares to ACP States exporting non-traditional ACP bananas” were required under the Lomé Convention.67 One could even argue that such anterior determinations must be made as a result of the requirement in Article 7.2 discussed above.68

There is one striking exception to this practice, which the Appellate Body’s statement in Mexico – Soft Drinks that it could not entertain an argument that would “entail a determination whether the United States has acted consistently or inconsistently with its NAFTA obligations” or would permit “panels and the Appellate Body to adjudicate non-WTO disputes”.69 This was because the “WTO dispute settlement system could [not] be used to determine rights and obligations outside the covered agreements”.70 ← 49 | 50 →

How can this be explained? How can the determination of rights and obligations under the Lomé Convention be permissible but not the determination of rights and obligations under NAFTA? One explanation might be that the United States had not consented to a panel making a determination on NAFTA (even an incidental determination). By contrast, it could be argued that the EC had at least by implication consented to an equivalent determination insofar as it consented to the adoption of the Lomé Waiver, which rendered such a determination necessary. But the entire point of the Arrest Warrant and EC – Hormones dicta is that consent is not required for such determinations. Without more, it seems that the Appellate Body might have made a mistake in Mexico – Soft Drinks and, what is more, an unnecessary one, given that this was only a second reason for declining to consider Mexico’s admissibility argument. But if the Appellate Body did make such a mistake, it is at least in the good company of Judge Higgins, who thought in Oil Platforms that the ICJ had “displace[d] the applicable law” by making a determination on the United States’ right of self-defense when interpreting a national security clause. The problem in that case was not the anterior determination. It was that the determination was arguably unnecessary, and also that the determination was included in the operative provisions of the judgment, even though it was on a topic that was not included in the substantive jurisdiction of the Court.

4. Conclusion

This paper has looked at the law applicable in WTO dispute settlement proceedings at different stages of dispute settlement, and it has done so by focusing on the law that could be applicable and the competence of a panel (or the Appellate Body, and in some cases the Dispute Settlement Body) to apply this law to the matter at hand.

The first question concerned the legality of the establishment of a panel. It was suggested that current WTO jurisprudence is correct to deny panels the power to determine whether they are properly established, although this is not because the DSU gives them no express power to do so, but rather because as a matter of logic they are unable to come to an unbiased decision on the issue. This is by contrast no impediment to a decision of this kind by the Appellate Body, albeit this must be determined as a jurisdictional question as to whether there is a valid issue for the Appellate Body to determine.

The second question concerned preconditions to the exercise of jurisdiction by validly established panels and the Appellate Body. One such question concerns the composition of a panel, which a panel should not decide, but the Appellate Body can and should, and this for ← 50 | 51 → the same reasons as it cannot decide whether it is validly established. A second condition concerned the question whether a valid notice of appeal should be considered a jurisdictional condition; the answer is that it should not. A third question concerned the condition that a decision of a panel should not be exercised for some external reason (i.e. admissibility considerations). It was concluded that panels were precluded from considering this question because the result would be to diminish the right of a WTO member to dispute settlement, and this would be contrary to Article 19.2. This is the case even if the result would contribute to a violation of international law, thereby potentially engaging the responsibility of the WTO as an international organization.

A third question involved the law applicable to issues concerning the material scope of the jurisdiction of a panel or the Appellate Body. Insofar as these issues are determined by WTO law, they do not raise any complicated applicable law issues. The same cannot be said, however, for rules on which the DSU is silent. The view was adopted that such rules are issued in exercise of the powers of panels and the Appellate Body to conduct proceedings.

Finally, this chapter considered applicable law issues arising in relation to the merits of a dispute. This section began with an analysis of the “matter” before a panel, and then moved on to identify three separate judicial tasks that panels in relation to a “matter”, which also apply, mutatis mutandis, to appeals before the Appellate Body. The first task is to establish the facts, based on WTO law established in the exercise of the inherent or implied jurisdiction of panels. The second is to identify the correct provisions of WTO law potentially applicable to those facts, taking into account the role of the parties in delimiting that law, and this task depends on an analysis of the covered agreements. The third task is to determine whether this law is applicable. This task could, in theory, require the application of non-WTO law, but Article 19.2 precludes any such enquiry. On the other hand, it was also established that panels and the Appellate Body should be able to make determinations on non-WTO law when this is necessary in order to reach a determination on a WTO issue properly before these bodies, provided that any such enquiry does not have the effect that WTO law is disapplied.

More generally speaking, it is possible to distinguish several different sources of law that are applicable in WTO dispute settlement proceedings. First are the WTO covered agreements themselves, which are applicable to questions relating to the material scope of jurisdiction of panels and the Appellate Body, as well as to the merits of disputes before these bodies. However, the covered agreements do not answer all possible questions. They do not, for example, determine when a validly established jurisdiction should be exercised, nor do they expressly say anything about procedural matters such as rules of evidence or due process. There ← 51 | 52 → might be a temptation to think that such rules, when they are devised and applied, originate outside the WTO legal system. The better view, however, is that they are inspired by such rules, but that they are wholly endogenous to the WTO system, and emanate from WTO panels and the Appellate Body in the exercise of their powers to conduct proceedings in accordance with the principles set out in the DSU. More complicated is the role of external rules that do not have a WTO analogue, such a rules on admissibility and on the applicability of WTO law. The ability of panels and the Appellate Body to apply such rules is essentially curtailed by Article 19.2, which prohibits panels and the Appellate Body from adding to or diminishing WTO Members’ WTO rights and obligations. However, even Article 19.2 does not prevent panels and the Appellate Body from making determinations based on non-WTO law that are necessary for them to determine issues that are within their jurisdiction.


1 University of Cambridge. Email: <lab53@cam.ac.uk>. This paper was presented at a Colloquium on WTO law at the College of Europe, Bruges on 12 September 2014. I am grateful for comments by the participants in the conference, in particular Mary Footer and Jan Bohanes, and also Michelle Zhang.

2 This process is usually called “subsumption”. See Robert Alexy, “On Balancing and Subsumption: A Structural Comparison”(2003) 15 Ratio Juris 433, 435; Neil MacCormick, Legal Reasoning and Legal Theory (Oxford: OUP, 1994), passim, and Frederick Schauer, “Formalism” (1988) 97 Yale Law Journal 509, at 534.

3 This is to be distinguished from the question whether a given legal system says anything about a given fact. It is possible to say that a legal system is neutral with respect to the fact, on which cf. the Declaration of Judge Simma in Kosovo (Advisory Opinion) [2010] ICJ Rep 403, paras 1-3 and 9. In a concrete sense, though, if a legal system is neutral, the “fact” at issue will be irrelevant (for definitional rules) or permitted (for rules with a legal consequence), by operation of the liberal default principle, common to all legal systems, and reflected in Lotus (France v Turkey) [1927] PCIJ (Ser A) No 10, at 18-19, that, except for public authorities limited by the principle of conferred powers, what is not expressly prohibited is permitted. For this as a principle of English constitutional law, see John Laws, “The Rule of Reason – An International Heritage” in Mad Andenas and Duncan Fairgrieve (eds.), Judicial Review in International Perspective (The Hague: Kluwer, 2000) at 256. For a recent sensible reading of Lotus see An Hertogen, “Letting Lotus Bloom” (2015) 26 EJIL 901.

4 Definitions 6(a) and 6(b) of “apply” in Oxford English Dictionary, 3rd ed. (Oxford: OUP, 2008).

5 G E M Anscombe, “On Brute Facts” (1958) 18 Analysis 69.

6 Neil McCormick, “Law as Institutional Fact” (1974) 90 LQR 102.

7 Lorand Bartels, “Jurisdiction and Applicable Law Clauses in International Law: Where Does a Tribunal Find the Principal Norms Applicable to the Case Before It?” in Tomer Broude and Yuval Shany (eds.), Multi-Sourced Equivalent Norms in International Law (Oxford: Hart, 2011), discussed in Application of the Genocide Convention (Croatia v Serbia) [2015] ICJ Rep nyr, Judge ad hoc Kreća, Separate Opinion, paras 69-73.

8 Bartels, ibid., and Judge ad hoc Kreća, Separate Opinion, ibid.

9 Nottebohm (Liechtenstein v Guatemala), Preliminary Objection [1953] ICJ Rep 111, at 119.

10 WTO panels have this power: WTO Appellate Body Report, US – 1916 Act, WT/DS136/AB/R, adopted 26 September 2000, at para. 54, n 30 (noting that “a widely accepted rule that an international tribunal is entitled to consider the issue of its own jurisdiction on its own initiative, and to satisfy itself that it has jurisdiction in any case that comes before it”) and WTO Appellate Body Report, Mexico – Corn Syrup (Art 21.5 – US), WT/DS132/AB/RW, adopted 21 November 2001, para. 36. It follows from the Appellate Body’s statement in US – 1916 Act that the Appellate Body has this power too.

11 Nottebohm, above at n 9.

12 All subsequent references to treaty provisions are to the DSU unless otherwise stated.

13 WTO Appellate Body Report, EC – Bananas III, WT/DS27/AB/R, adopted 25 September 1997, para. 142.

14 WTO Appellate Body Report, EC – Certain Customs Matters, WT/DS315/AB/R, adopted 11 December 2006, para. 131.

15 Mohamed Shahabuddeen, International Criminal Justice at the Yugoslav Tribunal (Oxford: OUP, 2012), at 58-61. Tayyab Mahmud, “Praetorianism and Common Law in Post-Colonial Settings: Judicial Responses to Constitutional Breakdowns in Pakistan” (1993) Utah L Rev 1225, at 1301 takes the view that constitutional courts are permitted to determine such questions on the basis of “extra-constitutional powers” justified on the grounds of “state necessity”. This view is criticized by Simeon McIntosh, Kelsen in the “Grenada Court”: Essays on Revolutionary Legality (Kingston: Ian Randle, 2008) at 151-156.

16 Emmanuel Gaillard and John Savage (eds.), Fouchard, Gaillard, Goldman on International Commercial Arbitration (The Hague: Kluwer, 1999), at 400: “[H]ow can an arbitrator, solely on the basis of an arbitration agreement, declare that agreement to be void or even hear a claim to that effect? The answer is simple: the basis for the competence-competence principle lies not in the arbitration agreement, but in the arbitration laws of the country where the arbitration is held and, more generally, in the laws of all countries liable to recognize an award made by arbitrators concerning their own jurisdiction”. See also Sandra Synková, Courts’ Inquiry into Arbitral Jurisdiction at the Pre-Award Stage: A Comparative Analysis of the English, German and Swiss Legal Order (Vienna: Springer, 2013), Ch. 1, passim and especially at 65 (describing this aspect of competence de la competence as a “pragmatic fiction”).

17 Mahmud and McIntosh, supra n 15.

18 The decision to register a request for arbitration is taken under Article 36(3) of the ICSID Convention, and ICSID Institution Rule 6(2) states that “[a] proceeding under the Convention shall be deemed to have been instituted on the date of the registration of the request”. See Christoph Schreuer et al., The ICSID Convention: A Commentary, 2nd ed. (Cambridge: CUP, 2009), at 469-473.

19 See especially ICTY Appeals Chamber, Tadić, Decision on the Defence Motion for Interlocutory Appeal on Jurisdiction, IT-94-1, AR72, 2 October 1995, paras 14-22 (in favor of such a power, but, as pointed out by Judge Li, Separate Opinion, para. 2, confusing the question of legality with other jurisdictional questions) and the contrary decision, with discussion, in STL Appeals Chamber, Ayyash, Decision on the Defence Appeals against the Trial Chamber’s “Decision on The Defence Challenges to the Jurisdiction and Legality of the Tribunal”, STL-11-01/PT/AC/AR90.1, 24 October 2012, paras 36-54.

20 WTO Panel Report, Australia – Leather, WT/DS126/R, adopted 16 June 1999, para. 9.12. Despite this finding the Panel went on to make a determination on the issue. It found that the DSU did not require the disestablishment of a panel in the circumstances mentioned (at paras 9.13-14).

21 WTO Dispute Settlement Body, Minutes of Meeting held on 25 September 2013, WT/DSB/M/337, 13 January 2014, paras 4.1-4.67.

22 Ibid., para. 4.44.

23 Stanley Paulson, “Kelsen on Legal Interpretation” (1990) 10 Legal Studies 136.

24 One might however then ask what is left of an authentic interpretation under Article IX: 3 of the WTO Agreement. The answer is that an authoritative interpretation is binding for future cases (and possibly past cases), not just the instant case.

25 See above at n 9.

26 WTO Panel Report, Guatemala – Cement II, WT/DS156/R, adopted 17 November 2000, para. 8.11, WTO Panel Report, US – Upland Cotton (Art 21.5 – Brazil), WT/DS267/RW, adopted 20 June 2008, para. 8.28, n 83; WTO Panel Report, US – Zeroing (EC) (Art 21.5 – EC), WT/DS294/RW, adopted 11 June 2009, para. 8.17.

27 WTO Appellate Body Report, US – Zeroing (EC) (Art 21.5 – EC), WT/DS294/AB/RW, adopted 11 June 2009, para. 172.

28 Rule 20(2) (d) of the Appellate Body Rules of Procedure. Cross-appeals are permitted.

29 WTO Appellate Body Report, EC – Bananas III (Art 21.5 – Ecuador II), WT/DS27/AB/RW2/ECU, adopted 26 November 2008, para. 280; WTO Appellate Body Report, US – Offset Act (Byrd Amendment), WT/DS217/AB/R, adopted 27 January 2003, para. 206.

30 See below at n 42.

31 Oil Platforms (Iran v US), Judgment [2003] ICJ Rep 161, para. 29. For discussion, see Yuval Shany, Questions of Jurisdiction and Admissibility before International Courts (Cambridge: CUP, 2015) at 129-133.

32 ELSI (US v Italy) [1989] ICJ Rep 1989, para. 50. The rule is dispensed with in the ICSID Convention.

33 ITLOS, Libertad (Argentina v Ghana), Order on Provisional Measures, Case No. 20, 15 December 2012, Joint Separate Opinion of Judges Wolfrum and Cot, paras 52-70.

34 WTO Appellate Body Report, Mexico – Soft Drinks, WT/DS308/AB/R, adopted 24 March 2006.

35 The clean hands principle was based on the Chorzów Factory case: WTO Appellate Body Report, Mexico – Soft Drinks, ibid., para. 55 n 114.

36 WTO Appellate Body Report, Mexico – Soft Drinks, ibid., para. 53.

37 WTO Appellate Body Report, EC – Bananas III (Art 21.5 – Ecuador II), above at n 29, para. 228; WTO Appellate Body, Peru – Agricultural Products, WT/DS457/AB/R, adopted 31 July 2015, para. 5.25. See Bregt Natens and Sidonie Descheemaeker, “Say It Loud, Say It Clear: Article 3.10 DSU’s Clear Statement Test as a Legal Impediment to Validly Established Jurisdiction” (2015) 49 JWT 873. As this author has argued in Lorand Bartels, “Applicable Law in WTO Dispute Settlement Proceedings” (2001) 35 JWT 499, at 501, this provision can, in practice, can be understood as “a conflicts rule limiting the uses of what could, a priori, be accepted as applicable law”. On the other hand, contrary to what has sometimes been thought (e.g. Joost Pauwelyn, Conflict of Norms in Public International Law (Cambridge: CUP, 2003), 336), this is not an argument that Article 19.2 is a conflicts rule. It simply has the same effects. Pauwelyn, ibid., at 478, also states that Article 19.2 is a rule of interpretation, which it is not.

38 Articles 2(c) and 6(1) of the Articles on Responsibility of International Organizations (ARIO), annexed to UNGA Res 66/100, UN Doc A/Res/66/100, 27 February 2012.

39 On the responsibility of the WTO, see Noemi Gal-Or, “Responsibility of the WTO for Breach of an International Obligation under the Draft Articles on Responsibility of International Organizations” (2012) 50 Canadian Yearbook of International Law 197 and Noemi Gal-Or and Cedric Ryngaert, “From Theory to Practice: Exploring the Relevance of the Draft Articles on the Responsibility of International Organizations (DARIO) – The Responsibility of the WTO and the UN” (2010) 13 GLJ 511. It may be asked whether such a recommendation could amount to coercion within the meaning of Article 16 ARIO, ibid.

40 See above at n 36.

41 There have been numerous disputes on these issues. See, e.g., WTO, Analytical Index, 3rd ed. (Cambridge: CUP, 2011), updated at <www.wto.org/english/res_e/booksp_e/analytic_index_e/ai_new_dev_e.pdf (accessed 28 March 2016), on Articles 6, 7 and 17>.

42 This provision, reflective of the principle non infra petita, requires panels to answer questions that are necessary to resolve the dispute, although questions can also be ignored on the grounds of judicial economy. See, e.g., WTO Appellate Body Report, US – Upland Cotton, WT/DS267/AB/R, adopted 21 March 2005, para. 732. Note however that Sir Hersch Lauterpacht was skeptical of the principle of judicial economy: The Development of International Law (1958), at 6-7; see also Chester Brown, “The Inherent Powers of International Courts and Tribunals” (2005) 76 British Yearbook of International Law 195, at 233.

43 Panels are bound by the non ultra petita rule: WTO Appellate Body, Chile – Price Band System (Article 21.5 – Argentina), WT/DS207/AB/RW, adopted 23 October 2002, para. 173. The same no doubt applies to the Appellate Body. On the admissibility of “new arguments”, which is essentially a due process issue, see WTO Appellate Body, US – COOL (Art 21.5 – Canada and Mexico), WT/DS384/AB/RW, 29 May 2015, para. 5.349.

44 See also below at n 50.

45 See also WTO Appellate Body Report, US – Continued Suspension, WT/DS320/AB/R, Annex IV (Procedural Ruling, 10 July 2008), para. 7, where the Appellate Body stated that “The conduct and organization of the oral hearing falls within the authority of the Appellate Body (compétence de la compétence) pursuant to Rule 27 of the Working Procedures”. It is not clear why this is described as compétence de la compétence, but the point is still valid.

46 In order to make grammatical sense of this sentence it is necessary to add a definite article and certain genitive compound noun phrases, here set out in square brackets.

47 Under Article 7.3 a complainant may also request the establishment of a panel with non-standard terms of reference. If the parties agree, a panel with non-standard terms of reference will be established. But Article 7.3 also states that “the DSB may authorize its Chairman to draw up the terms of reference of the panel in consultation with the parties to the dispute subject to the provisions of paragraph 7.1 above”. This may mean that the Chairman may impose terms of reference on parties in the absence of agreement. See WTO Dispute Settlement Body, Australia – Salmonids, Communication from the Chairman of the DSB, WT/DS21/5, 23 July 1999, para. 3.

48 WTO Appellate Body Report, US – Products from China, WT/DS449/AB/R, adopted 22 July 2014, para. 4.6. This is no doubt because, contrary to Article 7.1, what is submitted to the DSB is a panel request, not a “matter”, per se. However, if the “matter” already includes the “relevant provisions” of the covered agreements cited, inter alia, by the complainant, it makes no sense to apply these provisions to themselves. The problem could perhaps be avoided if the “matter” in Article 7.1 (as opposed to the “matter” in Article 11) were read as meaning simply the facts of the matter, as opposed to the law of the matter.

49 WTO Appellate Body Report, EC – Fasteners (China), WT/DS397/AB/R, adopted 28 July 2011, para. 562. This presupposes that there is a valid panel request.

50 This is made clearer in the Appellate Body’s statements on the appropriate standard of review, e.g., in Appellate Body Report, EC – Hormones, WT/DS26/AB/R, adopted 13 February 1998, paras 116-119.

51 Georges Abi-Saab, “The WTO Dispute Settlement and General International Law” in Rufus Yerxa and Bruce Wilson (eds.), Key Issues in WTO Dispute Settlement: The First Ten Years (Cambridge: CUP, 2005), at 10.

52 E.g. on the burden of proof, WTO Appellate Body Report, US – Wool Shirts and Blouses, WT/DS33/AB/R, adopted 23 May 1997, at p. 14.

53 WTO Appellate Body Report, US – Gambling, WT/DS285/AB/R, adopted 20 April 2005, para. 282 (emphasis added).

54 Cf. Lotus, above at n 2, p.°31.

55 For such a duty, see Fisheries Jurisdiction (UK v Iceland), Judgment [1974] ICJ Rep 3, para. 17 and Nicaragua (Nicaragua v USA), Merits [1986] ICJ Rep 14, at para. 29, although these were both cases falling under Article 53 ICJ Statute in which the respondent was absent.

56 WTO Panel Report, US – Gasoline, WT/DS2/R, adopted 20 May 1996, para. 1.4. Emphasis added.

57 WTO Dispute Settlement Body, EC and its Member States – Certain IT Products – Constitution of the Panel Established at the Request of the United States, Japan, and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu – Note by the Secretariat, WT/DS375/9, 26 January 2009.

58 WTO Panel Report, EC – Hormones (US), WT/DS26/R, adopted 13 February 1998, para. 4.268.

59 Jaap Hage, Studies in Legal Logic (Vienna: Springer, 2005) at 88, at 145-148. For uncodified rules an alternative (but problematic) reading is that the exception confines the rule. See Claire Finkelstein, “When the Rule Swallows the Exception” in Linda Ross Mayer (ed.), Rules and Reasoning: Essays in Honour of Frederick Schauer (Oxford: Hart, 1999). I am grateful to Federica Paddeu for this reference.

60 See further, Lorand Bartels, “The Relationship between the WTO Agreement on Agriculture and the SCM Agreement: An Analysis of Hierarchy Rules in the WTO Legal System” (2016) 50 JWT 7, at 9.

61 See Petros Mavroidis, “No Outsourcing of WTO Law? WTO Law as Practiced by WTO Courts” (2008) 102 AJIL 421.

62 E.g. WTO Appellate Body Report, EC – Sardines, WT/DS231/AB/R, adopted 23 October 2002, para. 200.

63 WTO Appellate Body Report, EC – Hormones, above at n 49, para. 156.

64 Arrest Warrant (DRC v Belgium) [2002] ICJ Rep 3, para. 43.

65 WTO Panel Report, Turkey – Textiles, WT/DS34/R, adopted 19 November 1999, para. 9.40.

66 WTO Appellate Body Report, Brazil – Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, para. 234.

67 WTO Appellate Body Report, EC – Bananas III, WT/DS27/AB/R, above at n 12, paras 183 and 255(i).

68 See above at n 41.

69 WTO Appellate Body Report, Mexico – Soft Drinks, above at n 17, para. 56.

70 Ibid.