   
  
JOB/DSB/1/Add.11/Rev.1  
 
22 October  2019 
(19-6919) Page: 1/4 
  Original: English  
 
STATEMENT ON A MECHA NISM FOR DEVELOPING,  DOCUMENTING AND SHA RING  
PRACTICES AND PROCED URES IN THE CONDUCT OF WTO DISPUTES  
Revision  
The following communication, dated 21 October  2019, is being circulated at the request of the 
Delegation s of Canada  and the European Union.  
 
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INTERIM APPEAL ARBIT RATION PURSUANT TO A RTICLE 25 OF THE DSU  
Revision  
The following two revisions should be made to the document entitled Interim Ap peal Arbitration 
Pursuant to Article 25 of the DSU  circulated as document JOB/DSB/1/Add.11:  
 
1. In the third sentence of paragraph 8 of the Annex, the cross -reference to paragraph 10 
should be a cross -reference to paragraph 9;  
 
2. In the same sentence, the phras e "or are incorporated in the award pursuant to footnote 6 " 
should be added immediately after the cross -reference to paragraph 9.  
 
Therefore, the text of the interim appeal -arbitration arrangement between Canada and the European 
Union should read as follows:  
INTERIM APPEAL ARBIT RATION PURSUANT TO A RTICLE 25 OF THE DSU  
Canada and the European Union,  
 
Acknowledging  the successful contribution of the WTO dispute settlement system to the security and 
predictability of the multilateral trading system, and re -affirming their commitment to a multilateral 
rules-based trading system,  
 
Recognizing  the essential role of the  Appellate Body within the WTO dispute settlement system,  
 
Underlining  the urgency and importance of filling the vacancies on the Appellate Body so that it can 
carry on its functions as envisaged by the DSU,  
 
Noting  however, with utmost concern, the endu ring absence of consensus in the Dispute Settlement 
Body for the proposals made to fill the vacancies,  
 
Recognizing  that the Appellate Body may no longer be able to fulfil its function in the near future, 
should the blockage of new appointments continue,  
 
Determined  to preserve the essential principles and features of the WTO dispute settlement system 
which include its binding character and two levels of adjudication through an independent and 
impartial appellate review of panel reports,  JOB/DSB/1/Add.11/Rev.1  
 
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In view of thes e extraordinary circumstances, envisage resorting to the following interim 
arrangement:  
 
1. Canada and the European Union indicate their intention to resort to arbitration under Article 25 
of the DSU as an interim appeal arbitration procedure (hereafter t he "appeal arbitration procedure"), 
if the Appellate Body is not able to hear appeals of panel reports in any future dispute between 
Canada and the European Union due to an insufficient number of its members. In such cases Canada 
and the European Union wil l not pursue appeals under Articles 16.4 and 17 of the DSU.  
 
2. Under the appeal arbitration procedure Canada and the European Union intend to replicate as 
closely as possible all substantive and procedural aspects as well as the practice of Appellate Rev iew 
pursuant to Article 17 of the DSU including the provision of appropriate administrative and legal 
support to the arbitrators by the Appellate Body Secretariat.  
 
3. In particular, Canada and the European Union envisage that, under the appeal arbitratio n 
procedure, appeals will be heard by three former members of the Appellate Body, serving as 
arbitrators pursuant to Article 25 of the DSU. The arbitrators will be selected by the Director -General 
from the pool of available former members of the Appellate Body1, based on the same principles and 
methods that apply to form a division of the Appellate Body under Article 17.1 of the DSU and 
Rule 6(2) of the Working Procedures for Appellate Review. However, two nationals of the same 
Member may not serve on the s ame case.  
 
4. In order to render the appeal arbitration procedure operational in particular disputes, Canada and 
the European Union indicate their intention to enter into the arbitration agreement set out in the 
Annex to this communication and to notify t hat agreement pursuant to Article 25.2 of the DSU within 
60 days after the date of the establishment of the panel.  
 
5. If either Canada or the European Union initiates an appeal under this appeal arbitration procedure 
in a dispute related to the same matt er for which one or more other WTO Members have also initiated 
an appeal under a similar appeal arbitration procedure2, Canada and the European Union envisage 
that a single arbitration panel should be formed to hear the appeals together. The Members 
concer ned envisage agreeing on reconciling any differences between the procedures, failing which 
the arbitration division would determine how to proceed.   
 
6. Canada and the European Union envisage that this interim arrangement will cease to apply as 
soon as the  Appellate Body is again fully composed. However, any pending arbitration will be 
completed under the interim appeal arbitration procedure, unless the parties agree otherwise, 
including through the arbitration agreement.  
 
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1 For greater certainty, this means the Appellate Body members whose term of office has expired as of 
the date of selection by the Director General.  
2 As set out in those Members' respective communications on an Interim Appeal Arbitrat ion Pursuant to 
DSU Ar ticle 25 pursuant to the Mechanism for developing, documenting and sharing practices and procedures 
in the conduct of WTO Disputes (JOB/DSB/1).  JOB/DSB/1/Add.11/Rev.1  
 
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  ANNEX  
AGREED PROCEDURES FOR ARBITRATION UNDER ARTICLE 25 of the DSU in dispute DS X  
 
1. In order to give effect to communication JOB/DSB/1/Add.11 in this dispute, Canada and the 
European Union (hereafter the "parties ") mutually agree pursuant to Article 25.2 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) to enter into 
arbitration under Article 25 of the DSU to decide any appeal from any final panel report3 as issued 
to the parties in dispute DS X. Either party to the dispu te may initiate arbitration in accordance with 
these agreed procedures.   
 
2. The arbitration may only be initiated if the Appellate Body is not able to hear an appeal in this 
dispute under Article 16.4 and 17 of the DSU. For the purposes of these agreed pr ocedures, such 
situation is deemed to arise where, on the date of issuance of the final panel report to the parties, 
there are fewer than three Appellate Body members.   
 
For greater certainty, if the Appellate Body is able to hear appeals, a party may not initiate an 
arbitration, and the parties shall be free to consider an appeal under Articles 16.4 and 17 of the 
DSU. 
 
3. In order to facilitate the proper administration of arbitration under these agreed procedures, the 
parties hereby jointly request the pa nel to notify the parties of the anticipated date of circulation of 
the panel report within the meaning of Article 16 of the DSU, no later than 45 days in advance of 
that date.  
 
4. Following the issuance of the panel report to the parties, but no later tha n 10 days prior to the 
anticipated date of circulation of the final panel report to the rest of the membership, any party may 
request that the panel suspend the panel proceedings with a view to initiating the arbitration under 
these agreed procedures. Such  request by either party is deemed to constitute a joint request by 
the parties for suspension of the panel proceedings for 12 months pursuant to Article 12.12 of the 
DSU.  
 
The parties hereby jointly request the panel to provide for:  
 
i. the lifting of confi dentiality with respect of the final panel report under the Working 
Procedures of the panel;  
ii. the transmission of the panel record to the arbitrators upon the filing of the Notice 
of Appeal : Rule 25 of the Working Procedures for Appellate Review shall appl y 
mutatis mutandis ; 
iii. the transmission of the final panel report in the official languages of the WTO to the 
parties and to the third parties4, 
 
before the suspension takes effect.  
 
Except as provided in paragraphs 6 and 13, the parties shall not request the panel to resume the 
panel proceedings.  
 
5. The arbitration shall be initiated by filing of a Notice of Appeal with the WTO Secretariat no later 
than 10 days after the suspension of the panel proceedings referred to in paragraph 4 has taken 
effect. The Notice of Appeal shall include the final panel report in the official languages of the WTO. 
The Notice of Appeal shall be simultaneously notified to the other party and to the third parties in 
the panel proceedings. Rules 20 -23 of the Working Proce dures for Appellate Review shall apply 
mutatis mutandis .  
 
6. Subject to paragraph 2, where the arbitration has not been initiated under these agreed 
procedures, the parties shall be deemed to have agreed not to appeal the panel report pursuant to 
Articles  16.4 and 17 of the DSU, with a view to its adoption by the DSB. If the panel proceedings 
 
3 For greater certainty , this includes  any final panel report issued in compliance proceedings pursuant to 
Article 21.5 of the DSU.   
4 The parties confirm that it is not their intention that the panel report be circulated within the meaning 
of Article 16 of the DSU.  JOB/DSB/1/Add.11/Rev.1  
 
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  have been suspended in accordance with paragraph 4, but no Notice of Appeal has been filed in 
accordance with paragraph 5, the parties hereby jointly request the pane l to resume the panel 
proceedings.  
 
7. The arbitrators shall be three persons selected by the Director -General within 10 days from the 
filing of the Notice of Appeal from the pool of available former members of the Appellate Body5, 
based on the same princ iples and methods that apply to constitute a division of the Appellate Body 
under Article 17.1 of the DSU and Rule 6(2) of the Working Procedures for Appellate Review. 
However, two nationals of the same Member may not serve on the same case. The arbitrator s shall 
elect a Chairperson. Rule 3(2) of the Working Procedure for Appellate Review shall apply, mutatis 
mutandis , to the decision -making by the arbitrator. However, the exchange of views provided for in 
Rule 4(3) shall not apply.  
 
8. Unless otherwise pro vided for in these agreed procedures, the arbitration shall be governed, 
mutatis mutandis , by the provisions of the DSU and other rules and procedures applicable to 
Appellate Review. This includes in particular the Working Procedures for Appellate Review a nd the 
timetable for appeals provided for therein as well as the Rules of Conduct. Except for panel findings 
that are deemed to form an integral part of an arbitration award pursuant to paragraph 9 or are 
incorporated in the award pursuant to footnote 6 , awards of other arbitrators under similar appeal 
arbitration procedures shall be deemed to constitute Appellate Body reports adopted by the DSB for 
the purposes of interpretation of the covered agreements, provided that the other arbitrators were 
selected c onsistently with the provisions of paragraph 7. The arbitrator may adapt the Working 
Procedures for Appellate Review and the timetable for appeals provided for therein, where justified 
under Rule 16 of the Working Procedures for Appellate Review, after con sulting the parties and 
taking into account the practice of the Appellate Body.   
 
9. An appeal shall be limited to issues of law covered by the panel report and legal interpretations 
developed by the panel. The arbitrators may uphold, modify or reverse the  legal findings and 
conclusions of the panel. Where applicable, the arbitration award shall include recommendations, as 
envisaged in Article 19 of the DSU. The findings of the panel which have not been appealed shall be 
deemed to form an integral part of t he arbitration award.  
 
10. The parties agree to abide by the arbitration award, which shall be final. Pursuant to Article 25.3 
of the DSU, the award shall be notified to the DSB and to the Council or Committee of any relevant 
agreement.  
 
11. Only parties to the dispute, not third parties, may initiate the arbitration. Third parties  which 
have notified the DSB of a substantial interest in the matter before the panel pursuant to Article  10.2 
of the DSU may make written submissions to, and shall be given an o pportunity to be heard by, the 
arbitrator. Rule 24 of the Working Procedures for Appellate Review shall apply mutatis mutandis .  
 
12. Pursuant to Article 25.4 of the DSU, Articles 21 and 22 of the DSU shall apply mutatis mutandis 
to the arbitration award i ssued in this dispute.  
 
13. At any time during the arbitration, the appellant, or other appellant, may withdraw its appeal, 
or other appeal, by notifying the arbitrators. This notification shall also be notified to the panel and 
third parties, at the same time as the notification to the arbitrators. If no other appeal or appeal 
remains, the notification shall be deemed to constitute a joint request by the parties to resume panel 
proceedings under Article 12.12 of the DSU6. If an other appeal or appeal remai ns at the time an 
appeal or other appeal is withdrawn, the arbitration shall continue.  
 
14. The parties shall jointly notify these agreed procedures to the panel in DS X and ask the panel 
to grant, where applicable, the joint requests formulated in paragr aphs 3, 4, 6, and 13.  
 
__________  
 
5 For greater certainty, this means the Appellate Body members whose term of office has expired as of 
the date of selection by the Director General.  
6 If the authority of the panel has lapsed pursuant to Article 12.12 of the DSU, the arbitrators shall issue  
an award that incorporates the findings and conclusions of the panel in their entirety.  