Ambitious Quest for 'Rule-Oriented' Dispute Settlement System of WTO

Dr.Humayun Rasheed Khan


The end of World War II paved the way for the establishment of many international organizations. The General Agreement on Tariffs and Trade (GATT) came into being in 1947 with a separate Dispute Settlement System to resolve trade disputes amongst member countries. Due to the dominance of great economic powers such as United States, U.K, Japan & Canada, the GATT was gradually dubbed as a ‘rich man’s club leading to reform process. Under the new system, a Dispute Settlement Body (DSB) consisting of dispute panels and an Appellate Body now adjudicates trade disputes between the parties. There is no iota of doubt that the Dispute Settlement Mechanism of WTO has worked more efficiently, independently and impartially than other international and judicial courts or tribunals.  This paper examines the gradual development of dispute settlement system under GATT and WTO. Reflecting on north-south divide, it focuses on Tokyo Round Negotiations and Uruguay Round Negotiations in some detail and also compares and contrasts GATT and WTO’s Dispute Settlement Mechanism in the multilateral trade regime.


Consultation, Dispute Settlement Body(DSB), Nullification, Impairment, Uruguay Round.

Full Text:



William J. Davey, The WTO Dispute Settlement Mechanism, Working Draft, June 25, 2003, p.1.



Article XXII states –

 each contracting party shall accord sympathetic consideration to, and shall afford adequate opportunity for consultation regarding, such representations as may be made by another contracting party with respect to any matter affecting the operation of this Agreement.

 the contracting parties may, at the request of a contracting party, consult with any contracting party or parties in respect of any matter for which it has not been possible to find a satisfactory solution through consultation under paragraph 1.

Article XXIII states –

If any contracting party should consider that any benefit accruing to it directly or indirectly under this agreement is being mollified or impaired or that the attainment of any objective of the agreement is being impeded as the result of:1

(a) the failure of another contracting party to carry out its obligations under this agreement; or

(b) the application by another contracting party of any measure, whether or not it conflicts with the provisions of this agreement; or

(c) the existence of any other situation, the contracting party may, with a view to the satisfactory, adjustment of the matter, make written representations or proposals to the other contracting party or parties which it considers to be concerned. Any contracting party thus approached shall give sympathetic consideration to the representations or proposals made to it.

Supra note.6.

Supra note.6.

J.H.Jackson, World Trade and the Law of GATT (1969), p. 164.

(1978-79) B.I.S.D., 26th Supp.210

G. Mores & P. Gillies – ‘International Trade and Business Law, Policy & Ethics’.

J.S. Castel – “The Uruguay Round and the Improvement to the GATT Dispute Settlement Rules and Procedures”, I & CLQ (Oct., 1989), Vol.38, p.835.

Any contracting party requesting consultations under Article XXII.2 must inform the Director General to allow notification of all other contracting parties, 1958

Article XXIII 1.

1979 Understanding, Annex, para 5.

1979 Understanding, Annex, para.5. The concept of nullification or impairment is related to the expectations of a contracting party.

1979 Understanding, para 5

Private persons have no standing under the GATT. They must act through their governments.

1979, Understanding, para 9. The function of Article XXIII.2 is to encourage the parties to settle their dispute.

Idem, para 16.

Idem, para 16.

1982 Ministerial Declaration on Dispute settlement, para (X).

1979, Understating, para.22; 1982 Ministerial Declaration on Dispute Settlement, para (VIII).

(1966) B.I.S.D., 14th Supp.18

1979 Understanding, paras-7-8. Annex, paras 2-3.

FOCUS, GATT Newsletter, May 1987, No.46, p.2.

R.E. Hudec; Legal Issues in US-EC Trade Policy: GATT Litigation 1960-1985, p. 79.

Chad P.Bown and Rachel McCulloch ,Developing Countries ,Dispute Settlement and The Advisory Centre on WTO Law , Global Economy and Development Program,p.2.

R.E. Hudec; The GATT Legal System and World Trade Diplomacy (1975), Adjudication of International Trade Disputes (1978) and “GATT 0Settlement After the Tokyo Round: An Unfinished Business”(1980) 13 Cornell Int. L.J. p. 145.

I.G. Castel – “The Uruguay Round and the Improvements to the GATT Dispute Settlement Rules and Procedures”, I & CLQ (Oct., 1989), p.841.

Ibid, p. 842.

Ibid, p. 834.

(1987) B.I.S.D., 33rd Supp.19; GATT Newsletter, Jan-Feb 1987, No.43, p.6.

Supra note 31. p. 842

Supra note 31, p.843.

(1987) B.I.S.D., 33rd Supp.19; GATT Newsletter, Jan-Feb.l987, No.43, p.6.

J.C.Bliss – “GATT Dispute Settlement Reform in Uruguay Round: Problems & Prospect” (1987) 23 Stan. J. Int. L. 31.

(1979) 15 I.L.M., 701.

SEATINI Bulletin: “WTO’s Dispute Settlement System and the proposed Centre on WTO Law’ - (Vol.2 No.7)

A. Chua, “The Precedential Effect of WTO Panel and Appellate Body Reports” (1998) 11 L.J.I.L. 45 at 46.

Eventually, GATT 1947 contracting parties adopted certain procedural rules and understandings in general dispute settlement.

James, Cameron & K.R. Gray, op cit, p.251.

Ibid, p. 253.

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