Say it Loud, Say it Clear — Article 3.10 DSU’s Clear Statement Test as a Legal Impediment to Validly Established Jurisdiction
Forthcoming, Journal of World Trade 49:5
18 Pages Posted: 18 Sep 2014 Last revised: 26 Apr 2015
Date Written: September 17, 2014
In paragraphs 53 and 54 of Mexico – Soft Drinks, the Appellate Body (AB) stated that a panel does not have a margin of discretion to decline to exercise validly established jurisdiction, yet continued by implying that legal impediments precluding a panel from exercising its jurisdiction may nonetheless exist. This paper argues that the AB’s statements are both internally coherent and coherent in light of the whole of its jurisprudence by way of two arguments. First, a panel indeed has no margin of discretion to decline to exercise validly established jurisdiction. However, jurisdiction is not automatically validly established. Second, legal impediments precluding validly established jurisdiction exist. These are, it is argued, Articles 3.7 and 3.10 DSU. The paper subsequently develops ‘procedural’ good faith in Article 3.10 DSU as a legal impediment and explains that the test for a violation of this provision demands a ‘clear statement’. While the conditions for the fruitful invocation of a violation of ‘procedural’ good faith as in Article 3.10 DSU have never been met in WTO disputes, we nonetheless consider that case law has cleared the path for a dispute in which this would be possible.
Keywords: WTO, RTA, FTA, jurisdiction, legal impediments, 3.10 DSU
JEL Classification: K33
Suggested Citation: Suggested Citation