2009 BIICL Conference Panel 4: View from the Bench and Bar: A Year in Review

1. 2009 BIICL Conference Panel 4: View from the Bench and Bar: A Year in Review Scott Andersen 20 May 2009

2. Standard of Review Developments – 2009 Definition of Standard of Review: Degree of deference or discretion that the AB (or panels) accord to national regulators or to WTO panels – or the degree of intrusiveness into the decision-making process. 2009 Standard of Review Developments: • AB Review of panel’s evidentiary analysis and reasoning • Panel review of risk assessments under Article 5.1 of SPS Agreement • Panel review of permissible interpretations under Article 17.6(ii) of AD Agreement

3. New Standard of Review for Panel Fact-Finding AB in Cotton 21.5: Footnote 618: • “In cases where a panel operates as the initial trier of facts, such as this one, it would similarly [as in panel review of AD IA] be expected to provide reasoned and adequate explanations and coherent reasoning.” • This requires Panels to address "possible alternative explanations” for evidence before them.

4. New Standard of Review for Panel Fact-Finding AB in Cotton 21.5 applied this standard repeatedly in assessing US claims under DSU Article 11 – paras. 381, 404, 415. • Para. 381: “. . . the Panel did take into account the evidence submitted by the United States on the role of China and properly reached the conclusion that China's role in the world cotton trade did not impact negatively on world upland cotton prices. For the same reasons, we also do not believe that the Panel failed to provide a ‘reasoned and adequate explanation’ for its conclusions in the light of ‘possible alternative explanations’, as alleged by the United States.”

5. AB - Continued ZeroingNew Standard of Review for Explaining Evidence Failure to explain rational regarding probative value: • “An essential part of a Panel’s task under Article 11 is to explain its objective assessment of the matter before it.” para. 338. • Panel erred in not explaining its rationale regarding the probative value of the margin calculation programs and/or calculation tables.

6. AB - Continued ZeroingNew Standard of Review for Explaining Evidence • Reaffirmed: certain margin of discretion by panel in assessing credibility and weight for a given piece of evidence • Reaffirmed: consider all evidence, not just evidence submitted by one party, and cannot wilfully disregard or distort such evidence • New: “Consider evidence before it in its totality, which includes consideration of submitted evidence in relation to other evidence.” Para 331. • New: “A particular piece of evidence, even if not sufficient by itself an asserted fact or claim, may contribute to establishing that fact or claim when considered in conjunction with other pieces of evidence.” Applied at paras. 336-337

7. AB in Hormones – Continued SuspensionNew Standard of Review Art. 5.1 of SPS Agreement • “Therefore, the review power of a panel is not to determine whether the risk assessment undertaken by a WTO Member is correct, but rather to determine whether that risk assessment is supported by coherent reasoning and respectable scientific evidence and is, in this sense, objectively justifiable.” AB Report, para. 590 • A panel’s consultation with experts “should not seek to test whether the experts would have done a risk assessment in the same way and would have reached the same conclusions as the risk assessor.” AB Report, para. 592

8. AB in Hormones – Continued SuspensionNew Standard of Review Art. 5.1 of SPS Agreement Key elements of Standard of Review • No de novo risk assessment • Risk assessment must be supported by coherent reasoning • Risk assessment valid even if panel’s experts would have reached a different conclusion • Source and scientific evidence is “respected and qualified”

9. Continued Zeroing - Making Article 17.6(ii) Functional Article 17.6(ii): "the panel shall interpret the relevant provisions of the Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations." (emphasis supplied)

10. Continued Zeroing - Making Article 17.6(ii) Functional • First step: Does application of Vienna Convention reveal a range of interpretations (without pre-judging whether those interpretations are permissible) -- or just one? Para. 271. • Second Step: If range is possible, then Panel must not “pursue further the interpretative exercise to the point where only one interpretation within that range may prevail.” para. 272 • Third step: Is the proposed interpretation permissible? para. 273 • Is there a conflict/contradiction among interpretations? • Does interpretation give effect to all relevant treaty provisions?

11. Continued Zeroing - Making Article 17.6(ii) Functional EXAMPLES: • Article 4.1: the reference in Article 4.1 to "a major proportion" means "the majority" or does it include a significant minority? • Article 2.2.1: The term "per unit costs at the time of sale" in 2.2.1 ADA. Does this include weekly, monthly or quarterly costs? • Article 6.10: Sampling involving "exporter or producer". Is the "or" conjunctive or disjunctive?

12. Continued Zeroing - Making Article 17.6(ii) Functional Questions: • How will this new Article 17.6(ii) analysis impact defences asserted by defending Members? • Will complaining parties avoid bringing claims that might fall within a permissible interpretation? • Is there a range of permissible interpretations available under certain disciplines under “normal” rules of Vienna Convention (see, e.g., Article 32)? • If there is a range of interpretations, how is it to be determined that some may be consistent and others not?

13. Thank You Scott Andersen Sidley Austin LLP Rue de Lausanne 139 - Sixth Floor 1202 Geneva +41.22.308.00.00 sandersen@sidley.com