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Panelists, Arbitrators, Judges: A Response to Joost Pauwelyn

Part of: Joost Pauwelyn, “The Rule of Law Without the Rule of Lawyers? Why Investment Arbitrators are from Mars, Trade Adjudicators are from Venus”

Published online by Cambridge University Press:  20 January 2017

Giorgio Sacerdoti
Giorgio Sacerdoti*
Affiliation:
Bocconi University, Milan
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I must state from the outset that I am not convinced that an analysis like the one conducted by Joost Pauwelyn, though valuable from a statistical and quantitative point of view, is really apt to explain the different functioning of legal institutions, their efficiency in term of results achieved in relation to objectives, the satisfaction of the various group of users and the reasons for their being subjected to criticism. The different architecture of the trade and investment systems reflects different constituencies, objectives and needs. Praise and criticism come from different groups of users and nonusers, and they change over time due to changing perceptions, objectives, and interests.

Type
Symposium on Joost Pauwelyn, “The Rule of Law Without the Rule of Lawyers? Why Investment Arbitrators are from Mars, Trade Adjudicators are from Venus”
Information
AJIL Unbound , Volume 109 , 2015 , pp. 283 - 287
Copyright
Copyright © American Society of International Law 2015

References

1 Pauwelyn, Joost, The Rule of Law Without the Rule of Lawyers? Why Investment Arbitrators are from Mars, Trade Adjudicators from Venus, 109 AJIL 761, 761 (2015)Google Scholar.

2 For a critical view, see Steinberg, Richard H., Judicial Lawmaking at the WTO: Discursive, Constitutional, and Political Constraints, 98 AJIL 247 (2004)Google Scholar.

3 Appellate Body Reports, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (Adopted Nov. 6, 1998); European Communities—Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (Adopted Apr. 5, 2001); Brazil—Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R (Adopted Dec. 17, 2007).

4 For a review, see UN Accord Multilateral Sur Les Investissements: D’un Forum de Negociation A L’autre?, (Société fran çaise pour le droit international ed., 1996).

5 These statements were made in reaction to the announcement by TranCanada Corporation that it intends to challenge under NAFTA Chapter 11 the cancellation by the U.S. Government in November 2015 of the controversial Keystone XL pipeline, see Magda Stokiewicz, How trade deals threaten democracy and climate, Euobserver (Jan. 8, 2016).

6 The EU proposal of a permanent international tribunal with appeal to hear investment disputes has been accepted by Canada in the final text of the Canada-EU Comprehensive and Economic Trade Agreement.

7 In the meeting of the DSB on 31 August 2015 Korea complained that in DS488, a complaint by Korea of U.S. antidumping measures,

the Secretariat had informed Korea that the panel established on 25 March 2015 would not begin its work until the end of 2016, at the earliest, a date some 15 months from the time Korea had been notified of the delay . . . not because the panelist were unavailable, but due to the constraints affecting the Secretariat.

Korea pointed out that this “remarkable, extraordinary, unreasonable delay” in light of both the DSU provisions and the economic reality, just for the case to get started, “was almost twice as long as the period foreseen by Art. 12.9 DSU between the establishment of the panel and the circulation of the report.” (WTO DSB, Minutes of the Meeting, WTO Doc. WT/DSB/M/367 (Aug. 31, 2015)).

8 As an example, at a recent DSB meeting in mid-2015 Canada complained that after four and a half years since the establishment of the panel the COOL (country-of-origin labeling) dispute with the United States was still far from being settled: after the panel, the appeal, the fixing by an arbitrator of the reasonable period of time for the United States to comply (which was not respected), a compliance panel (Article 21.5 DSU) against the United States by Canada and Mexico (the other complainant), which found that the measure taken by the United States had not brought compliance (but possibly even worsened the breach). The arbitration panel (Article 22.6 DSU) was at the time just starting its work (later concluded in December 2015) to establish whether the countermeasures announced by Canada and Mexico were excessive in comparison with the trade loss caused to them by the COOL measure, as submitted by the United States. Shortly after the arbitration had been concluded, President Obama announced on 18 December 2015 a radical change of the COOL legislation putting it in conformity with U.S. obligations.

9 The Director-General made a lengthy and detailed statement at the DSB meeting of 28 October 2015 in which he made the point that the problems would not be resolved just through administrative measures and shifting of resources within the Secretariat as he had been actively doing. Several Members acknowledged the problem and decried its negative consequences on the effectiveness of the DSB though abstained from launching any ideas for tackling more seriously the problems.

10 Small but important efficiency innovation could also concern the composition of panels, regarding which parties often disregard the provision of Article 8.6 that “[t]he parties to the dispute shall not oppose nominations suggested by the Secretariat under the same provision except for compelling reasons, ” thus causing additional delays. The suppression of the “Interim Review Stage” (Article 15) which has become pointless with the introduction of appeal would also speed the process.

11 As a consequence, they are not paid, if they are employed by their governments, because they are considered to be put by the latter at the disposal of the WTO. This is an additional reason why the top officials are usually not available for selection.

12 See Malacrida, Reto, WTO panel composition: searching far and wide for administrators of world trade justice, in A History of Law and Lawyers in the GATT/WTO 311 (Marceau, Gabrielle ed., 2015)CrossRefGoogle Scholar.

13 This means that in practice, American, European, Japanese, Canadian, and Chinese potential panelists are hardly ever appointed since the respective countries almost always participate as third parties to proceedings when they are not main parties.

14 See for instance the Repertory of WTO law updated regularly by the Secretariat (World Trade Organization, I-II WTO Analytical Index, Guide to WTO Law and Practice, (2d ed., 2007), besides the one issued by the Appellate Body (WTO Appellate Body, Repertory of Reports and Awards, 1995-2013 (5th ed., 2015).

15 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States art. 52, Mar. 18, 1965, 575 UNTS 159.

16 Since ISDS arbitrators, like commercial arbitrators, do not enjoy the same level of administrative and legal support that the WTO Secretariat provides, this encourages the growth of arbitration specialists with their own “arbitration boutiques” or connected to specialized law firms avoiding the risk of conflict of interest that large firms generate.