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WTO AB as a Model for Other Adjudicatory Bodies—The Case of EU’s Investment Court System

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The Appellate Body of the WTO and Its Reform

Abstract

The World Trade Organization’s Appellate Body (AB) has over the years served as an important point of reference in the ongoing debate over possibilities of reform of the existing regime of Investor-State Dispute Settlement (ISDS). ISDS, based on arbitration, has been criticized, inter alia, for lack of transparency, insufficient safeguards of adjudicatory independence and too weak representation of public interest. Replacement of arbitration with a judicial institution has been long considered by the critics among possible remedies to the deficiencies of the ISDS regime, and the resulting reform proposals have often adopted the AB as an inspiration. This chapter reviews historical and recent projects of the ISDS reform in order to identify sources of such inspirations. It focuses on the European Union’s Investment Court System (hereinafter ICS), which has so far been the politically most successful initiative of judicialization of investor-state dispute resolution. The institutional design and status of adjudicators in ICS is analyzed in comparison to the AB. The chapter then discusses the issue of procedural safeguards of transparency in both institutions, as well as the status and enforceability of rulings. This comparison reveals a number of similarities and differences between both regimes.

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Notes

  1. 1.

    International Law Association, Draft Statutes of the Arbitral Tribunal for Foreign Investment and of the Foreign Investment Court (1948), reprinted in: UNCTAD, “International Investment Instruments: A Compendium”, Vol. XI, Annex C Non-Governmental Instruments. United Nations, New York and Geneva (2003), pp. 259–272.

  2. 2.

    Miles (2013, p. 85).

  3. 3.

    Cf. Ketcheson (2016, p. 110).

  4. 4.

    Cf. Tereposky and Nielsen (2016, p. 123 ff).

  5. 5.

    Cf. Harten (2007, pp. 164–165) and Schill (2017, pp. 5–6).

  6. 6.

    Cf. id at pp. 172–173; Cf. Park (2009, pp. 658–661) and Schreuer (2013, p. 314).

  7. 7.

    Cf. Harten (2007, p. 10 ff).

  8. 8.

    Id., at pp. 180–181.

  9. 9.

    Cf. Qureshi (2008, p. 1165 ff).

  10. 10.

    Cf. Wu (2014, p. 183).

  11. 11.

    Legum (2006, p. 121 ff) and Schneider (2006, p. 103 ff).

  12. 12.

    Id.

  13. 13.

    Cf. McRae (2010, p. 371); Wu, supra note 10 at pp. 184–185; Legum (2015, p. 437).

  14. 14.

    Feldman (2017, p. 528).

  15. 15.

    See generally, e.g., Ehlermann (2002).

  16. 16.

    Picciotto (2005, p. 481).

  17. 17.

    Weiler (2002, p. 191 ff).

  18. 18.

    See generally Pauwelyn (2016).

  19. 19.

    Kaufmann-Kohler and Potestà (2016).

  20. 20.

    The negotiations on this agreement were successfully concluded and the text of the treaty published in February 2016. The proposal shall now be subject to legal review, translations and formal presentation by the European Commission to the Council of Ministers for approval and to the European Parliament for ratification. Cf. Eur Comm, Countries and Regions, European Commission. http://ec.europa.eu/trade/policy/countries-and-regions/countries/vietnam/. Accessred 6 Mar 2019.

  21. 21.

    The Canada-EU Comprehensive Economic and Trade Agreement (CETA) provisionally entered into force on 21 September, 2017. The provisions on ICS have not been subject to the provisional entry into force. Cf. Eur Comm, Negotiations and Agreements, Eur Comm. http://ec.europa.eu/trade/policy/in-focus/ceta/. Accessed 6 Mar 2019.

  22. 22.

    European Commission (2016a).

  23. 23.

    Juncker (2017).

  24. 24.

    European Council (2018).

  25. 25.

    Comprehensive Economic and Trade Agreement, Can.-EU, ch. 8s. F, Oct. 30, 2016 [hereinafter CETA]; EU-Vietnam Free Trade Agreement, EU-Viet., ch. 8.2s. 3, opened for signature Oct. 17, 2018 [hereinafter EVFTA]; Transatlantic Trade and Investment Partnership, U.S.-EU, proposal ch. 2 [hereinafter TTIP].

  26. 26.

    EVFTA art. 12(7); cf. CETA art. 8.27.7.

  27. 27.

    Lenk (2016, pp. 668–669).

  28. 28.

    Petersmann (2018, p. 103 ff).

  29. 29.

    Elsig and Pollack (2014, p. 1).

  30. 30.

    Id. at p. 391.

  31. 31.

    CETA, arts. 8.30.1 and 8.44.2; EVFTA, Article 14(1) and Annex II; TTIP proposal ch. 2 art. 11.1 and Annex II.

  32. 32.

    Langford et al. (2017, p. 301 ff).

  33. 33.

    CETA, Article 8.30.1; EVFTA, Article 14(1); TTIP proposal ch. 2 art. 11.1.

  34. 34.

    CETA, Article 8.30.2–3; EVFTA, Article 14(2)–(4); TTIP proposal ch. 2 art. 11.2–4.

  35. 35.

    CETA, Article 8.30.4; EVFTA, Article 14(5).

  36. 36.

    CETA, Article 8.27.4 and art. 8.28.4; EVFTA, Article 14(1) and 13(7); TTIP proposal ch. 2 art. 9.4 and 10.7.

  37. 37.

    Cf. Harten (2016), p. 145.

  38. 38.

    Id. at p. 6.

  39. 39.

    Cf. Güneş Ünüvar ‘Impossible Ethics? A Critical Analysis of the Rules on Qualifications and Conduct of Adjudicators in the New EU FTAs’ (forthcoming).

  40. 40.

    Cf. Jemielniak (2017, pp. 594–597).

  41. 41.

    European Commission (2011) Towards a comprehensive European international investment policy. http:// trade.ec.europa.eu/doclib/docs/2010/july/tradoc_146307.pdf.

  42. 42.

    European Commission (2016b).

  43. 43.

    Wolff and Ragosta (1996, p. 708) and Mercurio and LaForgia (2005, p. 491).

  44. 44.

    Ragosta et al. (2003, p. 697).

  45. 45.

    Mercurio and LaForgia, supra note 43, at pp. 492–493.

  46. 46.

    See Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (12 Oct 1998).

  47. 47.

    See Appellate Body Report, United States—Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/AB/R (10 May 2000).

  48. 48.

    See Appellate Body Report, European Communities—Trade Description of Sardines, WT/DS231/AB/R (26 Sept 2002).

  49. 49.

    See Communication from the Chairman of the Panels, United States—Continued Suspension of Obligations in the EC—Hormones Dispute, WT/DS320/8; WT/DS321/8 (2 Aug 2005).

  50. 50.

    Cf. Ehring (2008, p. 20121 ff).

  51. 51.

    Jemielniak (2016, pp. 260–261).

  52. 52.

    Ehring, supra note 50, at p. 1021.

  53. 53.

    See Procedures for the Circulation and Derestriction of WTO Documents, WT/L/452 (May 16, 2002).

  54. 54.

    Cf. WTO, Explanatory note on old and new procedures. World Trade Organization. http://www.wto.org/english/forums_e/ngo_e/derestr_explane_e.htm. Accessed 6 Mar 2019.

  55. 55.

    Fukunaga (2013, p. 35).

  56. 56.

    Ehring, supra note 50, at p. 1021.

  57. 57.

    As in admission of amicus curiae briefs by the WTO AB in US—Shrimp, based on the general right of the panel to seek information, provided in Article 13.2 of the DSU, which grants panels the right to seek information.

  58. 58.

    Ehring, supra note 50, at 266.

  59. 59.

    Cf. CETA, Article 8.36 [Transparency of Proceedings] and EVFTA, Article 20.

  60. 60.

    Lam  and Ünüvar (2019, p. 14); cf. CETA art. 8.21 on the Determination of the respondent for disputes with the European Union or its Member States.

  61. 61.

    UNCITRAL Transparency Rules, Article 3(2).

  62. 62.

    CETA, Article 8.36(6).

  63. 63.

    CETA, Article 8.38.

  64. 64.

    TTIP Proposal, Article 18.

  65. 65.

    EVFTA, Article 20(4), explanatory note.

  66. 66.

    EVFTA, Article 20(7).

  67. 67.

    EVFTA, Article 25.

  68. 68.

    CETA, Article 8.23.3; EVFTA, Article 7(2)(d).

  69. 69.

    Cf. Appellate Body Secretariat, World Trade Organization. https://www.wto.org/english/tratop_e/dispu_e/ab_secretariat_bio_e.htm. Accessed 6 Mar 2019.

  70. 70.

    Cf. Reinisch (2016, p. 761 ff).

  71. 71.

    EVFTA, Article 31(3).

  72. 72.

    Id.

  73. 73.

    Jemielniak (2018, pp. 243–244).

  74. 74.

    Mark Dallal v. Bank Mellat [1986] EWCA(Civ) 1 QB 441 (Eng.).

  75. 75.

    Swiss Federal Tribunal, Gundel v. Fédération Equestre International, 15 March 1993, BGE 119 II271.za.

  76. 76.

    Id. at p. 280.

  77. 77.

    Cf. Casini (2012).

  78. 78.

    Marc Bungenberg ‘Enforcement problems of Decisions by a Multilateral Investment Court—And Solutions’ (forthcoming).

  79. 79.

    Matsushita et al. (2015, pp. 111–112).

  80. 80.

    Leitner and Lester (2017, p. 171 and ff).

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Authors and Affiliations

  1. Faculty of Law, Centre of Excellence for International Courts (iCourts), University of Copenhagen, Copenhagen, Denmark

    Joanna Lam

  2. Kozminski University, Warsaw, Poland

    Joanna Lam

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  1. Constitutional Court of Taiwan, ROC, Taipei, Taiwan

    Chang-fa Lo

  2. Chuo Gakuin University, Tokyo, Japan

    Junji Nakagawa

  3. School of Law, National Chiao Tung University, Hsinchu, Taiwan

    Tsai-fang Chen

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Lam, J. (2020). WTO AB as a Model for Other Adjudicatory Bodies—The Case of EU’s Investment Court System. In: Lo, Cf., Nakagawa, J., Chen, Tf. (eds) The Appellate Body of the WTO and Its Reform. Springer, Singapore. https://doi.org/10.1007/978-981-15-0255-2_18

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