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Transpacific Partnership Agreement / Chapter 28: Dispute Settlement
March 08, 2016 |
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| Transpacific Partnership Agreement / Chapter 28: Dispute Settlement |
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On 4 October 2015, the representatives of the 12 contracting states (Australia, Brunei, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, United States of America and Vietnam) announced the conclusion of the negotiations for the Transpacific Partnership Agreement (“TPP” or the “Agreement”).
This Newsletter summarizes the relevant aspects of the TPP Chapter 28, which provides for its dispute resolution mechanism.
The Chapter begins by stating the duty of all Contracting States (the “Parties”) to make their best efforts in reaching agreements on the interpretation and application of the TPP, and to achieve, through cooperation and consultations, mutually satisfying agreements on any matter that may affect the operation of the TPP (Article 28.2).
In its Article 28.6, it further states that the Parties may voluntarily undertake an alternative method of dispute resolution, such as good offices, mediation or conciliation; the proceedings shall be kept confidential and may continue even though the matter has proceeded for resolution before a panel.
The provisions of said Chapter shall apply to disputes related to the interpretation or application of the TPP (except for some matters specifically excluded), to the inconsistence of the measures adopted by a Party in regards to the TPP and to the nullification or impairment of benefits that a Party reasonably expected from the Agreement (Article 28.3.1).
Article 28.5 regulates the right of any Party to request consultations to another in regards to any matter described in Article 28.3; it shall communicate the request to all Parties, so they are allowed the opportunity to participate should they have a substantial interest in the matter.
If an agreement cannot be reached through consultations within 60 days (30 days if the dispute concerns perishable goods, or any other period if the parties so agreed), the Party which requested the consultations may also request the establishment of a dispute resolution panel (Article 28.7.1) consist of three experts in law, international trade, any matter covered by the Agreement, or in the resolution of disputes arising under international trade agreements. The experts must be independent from the Parties and known for their sound judgment and reliability (Articles 28.9 and 28.10.1).
Each Party shall appoint a panelist within 20 days following the presentation of the request for the establishment of the panel. If the complaining Party fails to appoint a panelist within said period, the proceedings shall end; and if the responding Party fails to appoint a panelist within said period, such panelist shall be appointed by the complaining Party (28.9.2). Both panelists shall appoint the Chair.
Once the panel is constituted, it shall have the task to determine if a Party has failed to comply with its obligations under the Agreement, and shall take into consideration the rules of interpretation stated in the Vienna Convention on the Law of Treaties, as well as reports of the WTO that are rendered applicable (Article 28.11). The panel shall conduct the proceedings in accordance to the Rules of Procedure for Panels established in Article 28.12.
The panel shall present an Initial Report within 150 days of the appointment of the last panelist (or 120 days in urgent cases), and shall include determinations on the failure of a Party to carry out its obligations, the reasons for such determination, and if the Parties so requested, recommendations for the resolution of the controversy. The Parties shall have 15 days to present comments in writing, which may be taken into consideration by the panel to modify its Report or make any further examination it considers appropriate (Article 28.16). The Final Report shall be presented within 30 days after the presentation of the Initial Report. The Parties shall disclose it to the public within 15 days thereafter.
To comply and implement the Final Report, the Parties shall agree on a reasonable period, or may also initiate arbitration proceedings for the determination of said period (Article 28.18). If the implementation is not possible at the time, the responding Party may negotiate with the complaining Party to agree on compensation. If there is no agreement, the complaining Party may suspend benefits to the responding Party. However, compliance with the measure, by either eliminating the non-conformity or nullifying the impairment, shall always be preferred over compensation and suspension, considered as temporary measures.
Chapter 28 innovates in the sense that it provides for an efficient mechanism to settle disputes, which seeks to prevent the Parties from delaying or extending the process for establishment of a panel, and guarantees the transparency of the proceedings by ensuring that the briefs presented are disclosed to the public, by allowing the public to access the hearings, non-governmental organizations to present briefs before panels, and by publishing the decisions made by said panels; all of which represents an interesting challenge for all Contracting States.
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IMPORTANT: The information contained herein is of general nature and for informative purposes only. Please consider that the information herein stated does not refer to the circumstances of any individual or entity. We strongly recommend not taking any action based solely on this information without the professional assistance of our lawyers. |
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