Dispute Resolution in Mercosur

in The Journal of World Investment & Trade
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Dispute Resolution in Mercosur

in The Journal of World Investment & Trade

References

  • For a translation into English of the full text of the Treaty of Asuncion and Annexes, see Thomas Andrew O'Keefe, Latin American Trade Agreements, Transnational Publishers, Inc., Ardsley on Hudson, New York, 1997 and 2001, at Appendix 5.

  • 2 The full text of the Protocol of Colonia, listed as Common Market Council (C.M.C.) Decision 11/93, is available in Spanish or Portuguese from the official Website of the Mercosur Administrative Secretariat at: «http://www.mercosur.org.uy».

  • 3 Interestingly, at the time the Protocol of Colonia was executed in January 1994, Brazil was not a signatory to the ICSID Convention. In addition, prior to the passage of Law No. 9307 of 22 September 1996, it was extremely difficult to enforce a foreign arbitral award in Brazil because of a requirement that any foreign award had to be incorporated into a judgment emanating from a court in the country where the award was made (a procedure that was not even permitted by the law in some countries); see, for example, Jose Maria Rossani Garcez, A Lei Brasileira de Arbitragem (Lei 9307/96) Sob o Prisma da Arbitragem International, 3 Revista dc Dircito do Mercosul, April 1999. a For a translation into English of C.M.C. Decision 11/94, see O'Keefe, supra, footnote 1, at Appendix 8.

  • 5 For a translation into English of the Protocol ofBrasilia, see O'Keefe, supra, footnote 1, at Appendix 7. The Protocol of Brasilia came into force on 22 April 1993 after it was ratified by the fourth Mercosur Member State.

  • 6 Each State Party or Parties involved on each side of a dispute selects an arbitrator from prc-submitted lists of candidates. The third arbitrator is chosen by mutual consent and becomes the President of the arbitration panel and cannot be a national of one of the State Parties involved in the controversy. If a consensus cannot be reached as to the third arbitrator, then Mercosur's Administrative Secretariat in Montevideo chooses him or her by lottery. Each State Party or Parties pays for the arbitrator it (they) chose. The cost of the third arbitrator is shared in equal parts by each side to the dispute. See Articles 7, 9, 11, 12, 14 and 24 of the Protocol. 7 Despite this limitation, it should be emphasized that nothing prevents a private party from trying to use the national court systems to try to seek redress for grievances that may include a State Party's failure to comply with its Mercosur obligations. Interestingly, this option has been frequently pursued, sometimes leading to anomalous results in which a court in one country will make a determination contrary to that reached by the national court in another country but involving similar facts. Part of the explanation for this lies in the fact that, under the Constitutions of countries such as Argentina, international law takes precedence over conflicting or non-existent domestic law, while it does not in Brazil and Uruguay; see, for example, Jorge E. Femandez Reyes, Evaluaciól1 de los Mecanismos de Soluci6n de Controversias en el MERCOSUR, 4 Revista del Mercosur, August 2000. 8 For a more detailed discussion of Mercosur's dispute resolution system, including its shortcomings, see Adriana Dreyzin dc Klor, Dispute Resolution Mechanism, in O'Keefe, supra, footnote 1, at pp. 7-6 through 7-16. See also Jose Emilio Ortega and Jacquelina Erica Brizzio, Integracion y Soltici6n de Conflictos: Perspectivas y Propuestas para el Mercosur, 3 Revista del Mercosur, April 1999.

  • I For a translation into English of the full text of the Protocol of Ouro Preto and Annex, see O'Keefe, supra, footnote 1, at Appendix 10. 10 Interestingly, Annex I to the Protocol of Ouro Preto is silent as to the precise procedure to follow in the event a private party is filing the complaint. Presumably the matter stays with the National Sections of the Mercosur Trade Commission. If the matter cannot be resolved at that level, then the private party must resort to the procedure established under the Protocol of Brasilia or lobby to have the complaint adopted by a State Party in order to bring it before the full Mercosur Trade Commission.

  • See Annex I, Article 2. These ten technical committees are: (1) Tariffs, Nomenclature & Product Classification; (2) Customs Matters; (3) Trade Norms; (4) Public Policies that Distort Competition; (5) Safeguard of Competition; (6) Unfair Trade Practices & Safeguard Measures; (7) Consumer Protection; (8) Non-tariff Barriers; (9) Automative Sector; and (10) Textile Sector. 12 The text of C.M.C. Decision 17/98 is available in Spanish or Portuguese from the official Website of the Mercosur Administrative Secretariat at: ((http://www.mercosllr.org.lIY>>. For a more detailed commentary on Decision 17/98, see Ernesto J. Rey Caro, Comentnrio al Reglamento del Protocolo de Brasilia para la Solllciól1 de Controversial en el Mercosur, 3 Revista del Mercosur, June 1999.

  • �3 In reviewing ad hoc arbitral awards, the role of the Permanent Tribunal of Review is limited to ensuring a consistent interpretation of the law applied by the arbitration panel as developed by the Tribunal itself and in previous ad hoc arbitral awards.

  • 14 The full texts of these six arbitral awards are available in Spanish or Portuguese from the official Website of the Mercosur Administrative Secretariat at: «http://www.mercosur.org.uy».

  • 15 It is interesting to point out that the Brazilian complaint on this matter was coupled by another filed with the Textile Monitoring Body that oversees implementation of the WTO's Multi-Fibre Arrangement. Although the Monitoring Body initially recommended that Argentina drop the safeguard measure because there was no showing that Brazil was actually the cause of any actual or potential harm to the Argentine textile industry, a WTO dispute settlement panel eventually refused to entertain the Brazilian petition.

  • 16 See, for example, Fernandez Reyes, supra, footnote 7, at p. 158, fh. 46, who points out that, between 1995 and May 2000, the Mercosur Trade Commission alone processed some 374 complaints.

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