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The Settlement of Disputes under the SADC EPA


The Settlement of Disputes under the SADC EPA

The Settlement of Disputes under the SADC EPA

African states are not known for instituting formal dispute settlement proceedings about the violation of trade agreements. They never do so amongst themselves and very seldom vis-à-vis third parties. This may be about to change, at least in respect of the implementation of the SADC-EU EPA. According to media reports, the EU and SACU have serious differences about safeguards imposed on EU chicken imports and about the calculation of tariffs on textiles imported from the EU. What are the SAD-EU EPA provisions on dispute settlement and how does this procedure relate to disputes under WTO agreements?[1]

The EPA Parties must first endeavour to resolve any dispute through consultations. If consultations are unsuccessful, the complaining Party may request the establishment of an arbitration panel or may seek recourse to a mediation. The mediator's opinion may include a recommendation on how to resolve the dispute consistent with the provisions of this Agreement. The mediator's opinion is non-binding.

Should the Parties fail to resolve the dispute through consultations or by mediation, the complaining Party may request the establishment of an arbitration panel.[2] The complaining Party shall identify the specific measures at issue, and it shall explain how such measures constitute a breach of the provisions of the Agreement.

An arbitration panel shall be composed of 3 arbitrators. Each Party shall appoint one arbitrator. They shall appoint a third arbitrator, who shall be the chairperson of the arbitration panel. The chairperson must not be a national of the Parties nor permanently reside in the territory of the Parties. There are detailed provisions for ensuring arbitrators are appointed and about the timelines for each phase of the proceedings.

Either Party may request the arbitration panel to provide a recommendation on how to ensure compliance with the obligations in the Agreement. The Party complained against shall take any steps necessary to comply with the arbitral ruling and the Parties shall seek to agree on the period of time to comply with that ruling. No later than 30 days after the receipt of notification of the arbitral ruling to the Parties, the Party complained against shall notify the complaining Party and the Trade and Development Committee of the reasonable period of time it will require to bring itself into compliance with the arbitral ruling. This period may be extended by agreement between the Parties.

The Party complained against shall notify the complaining Party and the Trade and Development Committee, before the end of the reasonable period of time, of any measure that it has taken to comply with the arbitral ruling. In the event of a disagreement between the Parties concerning the compatibility of any measure notified, the complaining Party may request the original arbitration panel to rule on the matter. If the Party complained against fails to notify any measure taken to comply with the arbitral ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that the measure notified is not compatible with the provisions of this Agreement, the Party complained against shall, if so requested by the complaining Party, present an offer for compensation. Compensation may include or consist of financial compensation, although nothing in this Agreement shall oblige the Party complained against to offer such financial compensation. If no agreement on compensation is reached within 30 days of the end of the reasonable period or a measure taken to comply is not compatible with this Agreement, the complaining Party shall be entitled, upon notification to the Party complained against, to adopt “appropriate measures”.

Compensation or appropriate measures shall be temporary and shall be applied only until any measure found to violate the provisions of this Agreement has been withdrawn or amended so as to bring it into conformity with those provisions or until the Parties have agreed to settle the dispute.

The Parties may reach a mutually agreed solution to a dispute under this Chapter at any time. They shall notify the Trade and Development Committee and the arbitration panel of such a solution. Upon adoption of the mutually agreed solution, the dispute settlement procedure shall be terminated.

The arbitration panel shall also have the right to seek the opinion of relevant experts as it deems appropriate. Interested entities are authorised to submit amicus curiae briefs to the arbitration panel in accordance with the Rules of Procedure. Any information obtained in this manner must be disclosed to the Parties and submitted for their comments.

The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided for in this Agreement. The arbitration panel shall make every effort to take any decision by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote. The ruling shall set out the findings of fact, the applicability of the relevant provisions of this Agreement and the reasoning behind any findings and conclusions that it makes. The Trade and Development Committee shall make the arbitral ruling publicly available unless it decides not to do so.

Arbitration bodies set up under this Agreement shall not arbitrate disputes on a Party's rights and obligations under the WTO Agreement. Recourse to the dispute settlement provisions of this Agreement shall be without prejudice to any action in the WTO framework, including dispute settlement action. However, where a Party has, with regard to a particular measure, initiated a dispute settlement proceeding under this Agreement or under the WTO Agreement, it may not initiate a dispute settlement proceeding regarding the same measure in the other forum until the first proceeding has ended. Nothing in this Agreement shall preclude a Party from implementing the suspension of obligations authorised by the Dispute Settlement Body of the WTO.

[1] Part III of the Agreement: Dispute Avoidance and Settlement.

[2] The Trade and Development Committee shall establish a list of 21 individuals who are willing and able to serve as arbitrators. They must have specialised knowledge on matters covered by this Agreement or experience in law and international trade. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government.

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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