WTO & Adr

By Swacker, Frank W.; Redden, Kenneth R. et al. | Dispute Resolution Journal, August-October 2000 | Go to article overview

WTO & Adr


Swacker, Frank W., Redden, Kenneth R., Wenger, Larry B., Dispute Resolution Journal


The following is an extract from the title World Trade Without Barriers: The World Trade Organization (WTO) and Dispute Resolution, published by Michie Butterworth, law publishers, in 1995.

Recent decades have seen a rise within the United States of a multitude of dispute resolution methods as partial alternatives to litigation. For example, the Martindale-Hubbell Dispute Resolution Directory (1995) describes more than a dozen options, including arbitration, dispute review board, early neutral evaluation, fact finding, mediation, mediation-arbitration, minitrials, multi-door Courthouses, negotiation, facilitation, conciliation, partnering, private judging, settlement conferences, and summary jury trial.

The Dispute Settlement Understanding (DSU) employs dispute resolution through negotiation, facilitated mediation, and arbitration. In that the DSU addresses disputes between and among sovereign states, it is difficult, if not nearly impossible to provide an exact comparison between the DSU of the World Trade Organization and alternative dispute resolution (ADR) under regional or bilateral treaties with private commercial alternative dispute resolution procedures. The use of the term alternative dispute resolution developed from the concept that such dispute resolution methods offer an alternative to dispute resolution in a judicial forum. At the time the WTO was created there existed no widely accepted judicial forum available for states to settle trade disputes. The closest alternative, it has been argued, is found in Article 4 of Chapter I of the Statute of the International Court of Justice established under the Charter of the United Nations that establishes the Permanent Court of Arbitration. The authors entertain grave doubts that decisions in International Court of Justice trade disputes, even if jurisdiction were accepted, would have been a popular substitute for the WTO Dispute Settlement Body (DSB) if it had been offered to WTO members. We shall discuss in some detail various aspects of international commercial ADR as employed in the Articles of the DSU. We believe doing so will allow the reader to acquire a better understanding of the adoption of ADR by the WTO in its DSU. The distinction between private and public arbitration lies in the area of enforcement of the award. Yet, even in this area, many of the considerations that are applicable to the binding effect of such awards lend themselves to a degree of comparison. For example, the desire of sovereign and private parties to have an unbiased, well reasoned opinion that will withstand sharp scrutiny and accommodate the doctrine of functus officio so as to allow extended award clarifications, including in some cases where this is due to the introduction of new or changing facts.1

Negotiation, Facilitation and Conciliation

Articles 4 and 5 of the DSU provide for voluntary consultation, conciliation, and mediation. The director general of the WTO may, acting ex officio, offer good offices, conciliation, or mediation with a view to assisting members to settle a dispute. Courts of some states of the United States may also order parties to disputes to submit to those forms of ADR. When such procedures are of an involuntary nature, they compare poorly to the voluntary requirements of the DSU.

Descriptions of negotiation, facilitation, and conciliation are set forth at p. 3-33 of the Martindale-Hubble Dispute Resolution Directory 1995 and reads as follows:

Negotiation is a process in which two or more parties hold discussions in an attempt to develop a compromise agreement on a matter of mutual concern.

This process of communication-involving give-and-take of ideas and haggling over options in an effort to find common ground-forms the basis of every non-adjudicative dispute resolution procedure (any procedure that does not involve a neutral who dictates the outcome). When a neutral third party enters the discussions to help the parties work toward consensus, the process is called facilitated negotiation, or facilitation. …

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