Appellate Body Hearings

The interpretation of DSU Article 17.10, which provides that « the proceedings of the Appellate Body shall be confidential »²⁵, lies at the heart of arguments both for and against the practice of open hearings.

Key to the arguments is the interpretation of the term « proceedings » and whether or not it includes appellate hearings. Proponents of open appellate hearings interpret « proceedings » to encompass only the internal work of the AB, including deliberations and reaching a decision. However to interpret the term in a broader manner to include external procedures such as oral hearings would be inconsistent with the existing practice of the AB and could lead to limiting the AB from referring to arguments of parties in the final report and could extend as far as limiting the notices of appeal from being circulated to WTO Members and made public.

In Canada - Aircraft²⁶, the AB opted for a broad reading noting that « […]

the term ‘proceedings’ [means] the entire process by which an appeal is prosecuted from the initiation of an appeal to the circulation of the Appellate Body report, including the oral hearing »²⁷. Nevertheless, in the case of opening appellate hearings, in US/Canada – Continued Suspension, the AB found that DSU Article 17.10 must be read in context, particularly taking into account DSU Article 18.2²⁸.

As mentioned earlier, DSU Article 18.2 provides that « […] nothing in this Understanding shall preclude a party to a dispute from disclosing statements of its own positions to the public […] ». Consequently if both parties to a

24 Panel Report, US/Canada – Continued Suspension, para. 7.49.

25 The full text of Article 17.10 of the DSU : « The proceedings of the Appellate Body shall be confidential. The reports of the Appellate Body shall be drafted without the presence of the parties to the dispute and in the light of the information provided and the statements made ».

26 See Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/AB/R, adopted 20 August 1999.

27 See US/Canada – Continued Suspension, WT/DS320/AB/R, Annex IV, para. 3.

28 Ibid.

dispute request open appellate hearings, they are putting into effect their choice to disclose statements of their own positions to the public and since Article 18.2 does not detail a means through which Members' positions may be made public, this right can be exercised after or during the hearing.

Furthermore, when reading Article 17.10 in conjunction with Article 18.2, the phrase « […] Nothing in this Understanding […] » should be taken to mean that not even Article 17.10 could preclude a party from disclosing its own positions to the public, including those made during an appellate hearing. The flipside to this argument is that parties could pave the way for a situation where, by mutual consent, parties to a dispute can override multilaterally agreed rules.

The AB comprehensively addressed the question of the relationship between DSU Articles 17.10 and 18.2 in a number of its procedural rulings²⁹. The AB agreed that by virtue of Article 18.2, parties have the choice to forgo confidentiality with regard to their statements. The AB also pointed out that the second sentence of Article 18.2 provides that « Members shall treat as confidential information submitted by another Member […] which that Member has designated as confidential », which would be redundant if Article 17.10 obliged parties to respect confidentiality with regard to all elements of the appellate proceedings. Furthermore, the last sentence of Article 18.2 ensures that the designation of confidentiality by one Member does not preclude the other from forgoing confidentiality. Thus, the AB confirmed that « Article 18.2 provides contextual support for the view that the confidentiality rule in Article 17.10 is not absolute »³⁰.

The limitations of the confidentiality rule in Article 17.10 were also emphasized by the AB, taking into account elements essential to the appellate process such as the notices of appeal and AB reports (containing summaries of all parties' arguments and often quotes) which are also disclosed to the public, concluding that « […] under the DSU, confidentiality is relative and time-bound »³¹. Additionally, in the appeals for the disputes US – Shrimp (Thailand)³² and US – Customs Bond Directive³³, third parties, who were external to the dispute, were allowed to attend the consolidated oral hearing. Thus if

29 See the following Appellate Body reports: Australia – Apples, WT/DS367/AB/R, Annex III, para 4 (a) ; US – Zeroing (Japan) (Article 21.5), WT/DS322/AB/RW, Annex II, para 4 (a) ; US – Zeroing (EC) (Article 21.5 – EC, WT/DS294/AB/RW, Annex III, para. 3 ; US – Continued Zeroing, WT/DS350/AB/R, Annex III, para. 3 ; EC – Bananas III (Article 21.5 – US/Ecuador II), WT/DS27/AB/RW/USA, WT/DS27/AB/RW2/ECU, Annex IV, para. 4 ; and US/Canada – Continued Suspension, WT/DS320/AB/R, Annex IV, para. 4.

30 Appellate Body Reports, US/Canada – Continued Suspension, WT/DS320/AB/R, Annex IV, para. 4.

31 Ibid., para. 5.

32 See Appellate Body Report, United States - Measures Relating to Shrimp from Thailand, WT/DS343/AB/R, adopted 1 August 2008.

33 See Appellate Body Report, United States – Customs Bond Directive for Merchandise Subject to Antidumping/Countervailing Duties, WT/DS345/AB/R, adopted 1 August 2008.

Article 17.10 required absolute confidentiality, then the AB could not have authorized external third parties to observe the hearings.

The question of whether or not the AB is granted the necessary power to authorize open hearings also forms part of the debate. Proponents argue that Article 17.10 cannot preclude open appellate hearings because the DSU does not envision an AB oral hearing in the first instance, so the scope of this provision could not extend to a question relating to these hearings. In the same light, since the AB was « empowered » by DSU Article 17.9³⁴ to write its Working Procedures³⁵ and to create the « oral hearing »³⁶ which was not foreseen in the DSU, the AB also logically has the power to authorize an oral hearing that is open to the public.

In its first procedural ruling in the US/Canada - Continued Suspension case, the AB confirmed that in fact, « [t]he oral hearing was instituted by the Appellate Body in its Working Procedures, which were drawn up pursuant to Article 17.9 of the DSU. The conduct and organization of the oral hearing falls within the authority of the Appellate Body (compétence de la compétence) pursuant to Rule 27 of the Working Procedures. Thus the Appellate Body has the power to exercise control over the conduct of the oral hearing, including authorizing the lifting of confidentiality at the joint request of the participants as long as this does not adversely affect the rights and interests of the third participants […] »³⁷.

The AB also addressed arguments that DSU Article 17.10 limits its powers to authorize the lifting of confidentiality. In the same procedural ruling, the AB clarified that « the confidentiality of the deliberations is necessary to protect the integrity, impartiality, and independence of the appellate process. In our view, such concerns do not arise in a situation where […] the Appellate Body authorizes the lifting of the confidentiality of the participants' statements in response to a joint request »³⁸.

The issue of maintaining the confidentiality of third parties' submissions is another factor in the debate on open hearings. With regard to this aspect, the AB made an important distinction in its first procedural ruling, which it upheld in the five subsequent instances. The AB identified two relationships, one between the AB and the main parties to the dispute and the other between

34 The full text of Article 17.9 of the DSU : « Working procedures shall be drawn up by the Appellate Body in consultation with the Chairman of the DSB and the Director-General, and communicated to the Members for their information ».

35 WTO Working Procedures for Appellate Review (Working Procedures), Doc. WT/AB/WP/6, 16 August 2010.

36 Ibid., Rule 27.

37 Appellate Body Reports, US/Canada – Continued Suspension, WT/DS320/AB/R, Annex IV, para. 7.

38 See Appellate Body report, US/Canada – Continued Suspension of Obligations, WT/DS320/AB/R, Annex IV, para. 8.

the third parties and the AB. The confidentiality requirement in the DSU is designed to protect these separate relationships, and the joint request of the main parties to forgo their confidentiality does not undermine the interests of the third parties or undermine the adjucative function of the AB. The AB clarified, « the right to confidentiality of third participant's vis-à-vis the Appellate Body is not implicated by the joint request. The question is thus whether the request of the participants to forgo confidentiality protection satisfies the requirements of fairness and integrity that are essential attributes of the appellate process and define the relationship between the Appellate Body and the participants »³⁹. The AB went even further to define the rights of third parties, emphasizing that their relationship to the dispute lies only in their interest in the systemic legal interpretation of provisions in the covered agreements, and thus they should not influence the manner in which confidentiality is dealt with in the relationship between the AB and the main parties to the dispute. In fact, « […] third participants would have to identify a specific interest in their relationship with the Appellate Body that would be adversely affected […] »⁴⁰ should the open hearing be granted.

Thus, despite compelling arguments that both support and undermine the need to authorize open hearings, the AB has consistently adopted a broad interpretation of the relevant DSU articles in a manner which puts a ceiling on the application of confidentiality in the appellate process while defining the rights and relationships of the parties to the dispute. The next section will briefly address the most pertinent policy arguments put forth by WTO Members and academia.