The WTO dispute settlement process

1. Under GATT 1947

GATT had two dispute Articles. Article XXII provided for consultation. Article XXIII allowed a contracting party which considered that a benefit under the Agreement was being nullified or impaired to refer the matter to the contracting parties, who developed the practice of appointing panels of experts. The system worked better than its text suggested, but every step needed consensus, so the defending party could block the establishment of a panel or the adoption of an adverse report. Results depended on power, and the United States increasingly acted unilaterally under section 301 of its Trade Act, 1974.

2. The Dispute Settlement Understanding

The Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) is Annex 2 of the Marrakesh Agreement. Its features:

• Integrated: one system for all covered agreements (Article 1), subject to special rules in some of them (Appendix 2).
• Compulsory: a member cannot refuse to be a respondent.
• Exclusive: members must use the DSU and not determine violations unilaterally (Article 23). In US – Section 301 Trade Act (panel, 2000) the US statute was not found in breach only because of the Administration's undertakings to act consistently with the DSU.
• Purpose (Article 3.2): security and predictability; to preserve members' rights and obligations and to clarify provisions in accordance with customary rules of interpretation of public international law; recommendations cannot add to or diminish rights and obligations.
• Administered by the Dispute Settlement Body (DSB), which is the General Council meeting in that capacity (Article 2).

3. Kinds of complaint

• Violation complaints, the usual kind: a measure breaches an obligation. A breach is presumed to nullify or impair benefits (Article 3.8).
• Non-violation complaints (GATT Article XXIII:1(b); DSU Article 26): a measure not in breach still upsets legitimate expectations from a concession. Rare, and the remedy is a mutually satisfactory adjustment, not withdrawal.
• Situation complaints (Article XXIII:1(c)): never used.

4. The stages

• Consultations (Article 4). A request in writing; the respondent must reply within 10 days and enter into consultations within 30 days. If consultations fail to settle the dispute within 60 days, the complainant may request a panel. Most disputes end here.
• Good offices, conciliation and mediation (Article 5): voluntary, at any time; the Director-General may offer them.
• Establishment of a panel (Article 6). On request, the DSB establishes a panel at the latest at the meeting following the one at which the request first appears, unless the DSB decides by consensus not to (negative or reverse consensus). Establishment is therefore automatic.
• Terms of reference (Article 7) and composition (Article 8): three panelists, or five if the parties agree, well-qualified and independent, not nationals of the parties unless agreed. If the parties cannot agree within 20 days, the Director-General appoints them.
• Function of panels (Article 11): an objective assessment of the facts, the applicability of the agreements and the conformity of the measure. Written submissions, two substantive meetings, expert advice (Article 13), an interim report for comment (Article 15). The final report should issue within six months, never more than nine (Article 12.8, 12.9). Third parties with a substantial interest may be heard (Article 10).
• Adoption (Article 16): not earlier than 20 days after circulation and within 60 days, unless a party appeals or the DSB decides by consensus not to adopt.
• Appellate review (Article 17). A standing Appellate Body of seven persons, three serving on each appeal, appointed for four years, renewable once. Appeals are limited to issues of law and legal interpretation; the Appellate Body may uphold, modify or reverse. Proceedings should not exceed 60 days, in no case 90. Its report is adopted unless the DSB decides by consensus otherwise, and must be accepted unconditionally by the parties.
• Recommendations (Article 19): that the member bring the measure into conformity. The panel may suggest ways of implementation.
• Implementation (Article 21). The member states its intentions within 30 days. If immediate compliance is impracticable it gets a reasonable period of time, agreed or fixed by arbitration (guideline: not more than 15 months). Disagreement over whether compliance measures are adequate goes to a compliance panel (Article 21.5).
• Compensation and suspension of concessions (Article 22). If the member fails to comply, the parties may negotiate voluntary compensation. Failing that, the complainant may ask the DSB to authorise suspension of concessions (retaliation), in the same sector first, then other sectors, and then other agreements (cross-retaliation, Article 22.3), equivalent to the level of nullification. The level may be arbitrated (Article 22.6). Retaliation is temporary; full compliance remains the preferred result (Article 22.1).
• Arbitration (Article 25) as an alternative, by agreement.

5. Developing countries

Special provisions include attention to their interests in consultations (Article 4.10), a developing-country panelist on request (Article 8.10), extra time (Article 12.10), special consideration in implementation (Article 21.8), and restraint in cases against least-developed members (Article 24). The Advisory Centre on WTO Law in Geneva gives subsidised legal help.

6. The Appellate Body impasse and the MPIA

The United States objected to what it saw as Appellate Body overreach (on zeroing, trade remedies and the length of reports) and from 2017 blocked the launch of the process to fill vacancies, which requires consensus. On 11 December 2019 the Appellate Body fell below the three members needed to hear an appeal, and the last member's term ended on 30 November 2020. Under Article 16.4 a panel report under appeal is not adopted until the appeal is completed, so a losing party can now appeal into the void and keep the report from ever binding it.

In 2020 a group of members, led by the European Union, set up the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) under Article 25: participants agree that appeals between them will be heard by three arbitrators drawn from a standing pool, with awards binding. China, Canada, Brazil and Japan are among the participants. India and the United States are not. Reform talks continued through the Fourteenth Ministerial Conference at Yaoundé in March 2026 without restoring the Appellate Body.

7. India in dispute settlement

• As complainant: US – Shrimp (1998, with others); EC – Bed Linen (2001, zeroing); EC – Tariff Preferences (2004, GSP drug arrangements).
• As respondent: India – Patents (US) (1997, the TRIPS mailbox obligation); India – Quantitative Restrictions (1999, balance-of-payments restrictions removed); India – Autos (2002); India – Agricultural Products (2015); India – Solar Cells (2016); and the panel reports in India – Export Related Measures (2019), India – Sugar and Sugarcane (2021) and India – ICT Tariffs (2023), each appealed by India into the void.

How this is examined

Write it as a time-line: consultations (60 days), panel (automatic by negative consensus, six to nine months), appeal on law (60 to 90 days), adoption, reasonable period, compliance panel, compensation and retaliation. Contrast the GATT positive-consensus system at the start and end with the 2019 impasse and the MPIA. One or two Indian disputes as examples secure the last marks.