WT/GC/W/760  
 
29 January 2019  
(19-0475) Page: 1/4 
General Council  Original: English  
 
FOSTERING A DISCUSSI ON ON THE FUNCTIONIN G OF THE APPELLATE BODY  
 
ADDRESSING THE ISS UE OF ALLEGED JUDICI AL ACTIVISM  
BY THE APPELLATE BOD Y 
COMMUNICATION FROM H ONDURAS  
The following communication, dated 28 January 2019, is being circulated at the request of the 
delegation of Honduras.  
 
_______________  
 
 
1  INTRODUCTION  
1.1.  In furtherance of the communication dated 23 July 2018 and reiterating the importance of the 
Dispute Settlement System within the broader WTO framework, Honduras would like to address the 
specifi c concerns raised by M embers regarding what some have called "judicial activism" by the 
Appellate Body.  However, other Members have also defended the Appellate Body's adjudicative 
approach as being necessary under rules of interpretation of public internati onal law.  
1.2.  We have identified the following areas where the Appellate Body has been said to have engaged 
in judicial activism. These are:  
• The Appellate Body has been said to have engaged in providing advisory opinions . 
• The Appellate Body has been said to h ave included  obiter dicta in its decisions.   
• The Appellate Body has been said to have addressed questions that are not necessary to 
settle a dispute.  
• The Appellate Body has been said to have addressed arguments that have not been raised 
by the parties.  
• The Appellate Body has been said to have adopted an erroneous standard of review:  
• It has been said to have gone into issues of fact by "reviewing domestic law" and by 
'completing the analysis' where the factual record before the panel is insufficient.  
• The Ap pellate Body has been said to have added or diminished the rights and obligations 
of Members under the DSU and other WTO agreements:  
• It is said that the Appellate Body has created rules on questions that were considered 
by the negotiators and left unsettle d. 
• It is said that the manner in which the Appellate Body modifies or interprets the DSU 
has added or diminished existing pro cedural rights and obligations.  WT/GC/W/760  
 
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  1.3.  The instances highlighted above are indicative and distinct  features of the broader issue of the 
Appellate Body allegedly exceeding its mandate and could all result in actions that add or diminish 
rights and obligations contrary to A rticles 3.2 and 19 of the DSU.  
1.4.  In this paper, we highlight certain options with a  view to facilitate further discussions regarding 
the issue. The issues and options presented here are not exhaustive, nor mutually exclusive, and 
they should not be read cumulatively. Furthermore, these options may be implemented through 
various means, to  be discussed separately. Several other pertinent issues also need to be resolved 
to fully address the problems facing the Dispute Settlement System and the WTO.  
2  PROPOSED OPTIONS  
2.1  Mandatory judicial economy1 
2.1.  Under the DSU the Appellate Body is not bound to exercise judicial economy. Could/should a 
mandatory obligation to exercise judicial economy be introduced such that the Appellate Body is 
obliged only to address those issues that are required to resolve the  dispute? If so, and in order to 
make this clear, Members could modify A rticle 17.12  of the  DSU that requires the Appellate Body to 
address "each of the issues raised".  Rather, under mandatory judicial economy, the AB would/could 
be limited to addressing o nly appeal claims and legal interpretations developed by the panel, that 
are necessary and required for the resolution of the specific dispute?  
2.2  Obiter Dictum2 
2.2.  Under the DSU the Appellate Body is not prohibited from making obiter dictum. Separate from 
the obligation to exercise judicial economy, could/should Members contemplate including a general 
prohibition or an instruction to the Appellate Body, to refrain from including in their opinions obiter 
dicta within the DSU, such that the Appellate Body is not p ermitted to engage in any abstract 
discussions or provide advisory opinions regarding provisions of WTO law?  
2.3  Standard of Review3 
a. Contrary to what is done for panels in Article 11 of the DSU, there is no explicit standard 
of review for the work of the Appe llate Body. Could/should Members add to the DSU an 
explicit standard of review for the AB that would make clear that the AB's mandate is to 
settle only the specific dispute at issue and interpret relevant provisions accordingly?  
An explicit general standar d of review?  
 
b. Could/should Members modify the DSU to include an obligation on the Appellate Body to 
make an objective assessment  of the matter before it akin to the obligation on panels 
under Article 11 of the DSU?4 The scope of such objective assessment, including the 
standard of review to be followed by the Appellate Body, could be set out by Members in 
such a modification.  
                                                
1 Judicial Economy ca n be understood  as the Appellate Body's obligation to deal only with those appeal 
claims and legal interpretations by panels that are that are necessary for resolution of the dispute before it.  
2 Obiter dicta can be understood as the e xpression of general opinions, remarks or statements regarding 
a case or a legal provision that are unnecessary for resolution of the dispute. They are partic ularly serious in 
instances in which they may add or diminish rights and obligations. Obiter dicta  is distinct from judicial economy 
as an obiter dictum  could occur even within the appeal claims or legal interpretations necessary for resolving 
disputes in the form of abstract and unnecessary discussions regarding those claims.  
3 The standard of review can be said to be concerned with the nature, depth and extent of the review 
exercised by an adjudicator over an action by a lower instance. In the context of the functions of  the AB, standard 
of review is also concerned with the amou nt of deference given to a panel's decision by the AB.  
4 Article 11 of the DSU requires a panel to make an objective assessment of the matter before it, including 
an objective assessment of the facts of the case and the applicability of and conformity with  the relevant covered 
agreements. A similar provision with respect to the Appellate Body's assessment of the panel's findings and 
decisions could be included.  WT/GC/W/760  
 
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An explicit prohibition to deal with facts?  
 
c. In that new standard of review, could/should the Appellate Body be explicitly prohibite d 
from dealing with facts? For instance,  
Domestic Law  
 
• Could/should  Members issue a clarification/ modify the DSU to explicitly st ate that the 
domestic law of a M ember is to be considered as an issue of fact and that the prevailing 
interpretation given to the domestic law by the courts or authoriti es of a M ember is not 
subject to the Appellate Body's review?  
Completing the analysis5 
 
• Could/should Members contemplate a prohibition on the practice of 'completing the 
analysis', not mentioned in the DSU?  
• Could/should Members contemplate introducing a remand procedure, where the Appellate 
Body finds the factual record to be insufficient, so as to avoid instances where the Appellate 
Body acts to 'complete the analysis'?  
2.4  Interpr etative Approaches by the AB – Prohibition against Adding or Diminishing 
Rights and Obligations   
a. The concept of adding or diminishing rights and obligations may be referred to as those 
affecting the substantive rights and obligations of Members under the WTO agreements. 
However, the con cept could also be discussed from the perspective of the manner in which 
the Appellate Body modifies or interprets the DSU thereby, adding or diminishing existing 
procedural rights and obligations.  
b. Arguably, some of the allegations of judicial activism co ncern the manner or the 
interpretative approaches used by the AB. Could/should the Appellate Body's obligation to 
"clarify" the existing provisions of the WTO agreements under Article 3.2 be 
deleted/modified? Could the obligation be modified to refer solel y to the clarification of 
provisions for the purposes of resolving the current dispute?  
c. Could/should Members issue binding/non -binding guidelines on the utilization and 
hierarchy of customary rules of interpretation of public international law referred to  in 
Article 3.2 of the DSU? Possible options for such guidelines could include:  
• For example, the guidelines could:  
• Provide that interpretation rules should be used solely for the purposes of resolving 
the current dispute and obiter dictum must be avoided. Provide that in the event 
of an ambiguity, a stronger emphasis is to be given to the negotiating history and 
travaux préparatoires , as opposed to the text, in order to determine and 
acknowledge the existence of 'constructive ambiguities'.  
                                                
5 Completing the analysis is understood to refer to the practice whereby, in certain appeals, upo n reversal 
of a legal finding of a panel, the Appellate Body examines and decides an issue that was not specifically addressed 
by the panel, based on the factual record or factual findings in the panel report.  WT/GC/W/760  
 
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  • Emphasize the imp ortance of applying the principle of non liquet6 where an 
ambiguity is found such that judicial law -making is avoided.  
• Urge a very high level of caution where the claim is such that it may require 
alternative methods of dispute settlement rather than lega l argumentation.  
• A reference to the explicit standard of review of the Appellate Body to make an 
objective assessment of the matter and not to deal with any issues of facts.  
d. Could/should M embers consider strengthening or revising the mechanism of issuing  
authoritative interpretations in order to correct erroneous interpretations of WTO law made 
by the Appellate Body during the course of adjudication?  
2.5  Possible external review  
a. Could/should Members contemplate introducing a possible review mechanism to cons ider 
whether the AB has, in a particular case, overstepped its mandate and either added or 
diminished Members' rights and obligations, engaged in obiter dicta  or gone into issues of 
fact and domestic law of Members? A possible authority responsible for suc h review would 
need to be decided by Members by way of discussions. Possible options could include:  
• The Director -General ; 
• The Dispute Settlement Body itself ; 
• A group of the three Chairpersons of the General Council, Dispute Settlemen t Body 
and Trade Policy  Review;  
• A small committee of the General Council or DSB members who, acting in their 
individual not representative capacity, provide the Appellate Body and DSB with an 
opinion in extraordinary cases of failure to observe the guidance provided by the DSB, 
in accordance with options chosen from this paper.  
b. Members would also need to discuss the possible consequences of such a body finding that 
the Appel late Body exceeded its mandate.  
__________  
                                                
6 The term non liquet originates in Roman law  and means " it is not clear ". It can b e said to  refer to a 
situation in which a competent court or tribunal fails to decide the merits of an admissible case for whatever 
reason, be it the absence of suitable law, the vagueness or ambiguity of rules, incons istencies in law, or the 
injustice of the legal consequences . The concept of non liquet  does not refer to situations in which a court refuses 
to decide a case because it lacks jurisdiction or finds a claim inadmissible. Generally, m ost domestic legal order s 
today prohibit courts from refusing to deliver a decision on the grounds of absence or obscurity of the law , 
however, certain systems such as the United States, do allow courts to refrain from pronouncing a judgment in 
certain circumstances, for instance  where the issue to be resolved entails a political as opposed to a legal 
question. This is however, distinct from non liquet . International Tribunals however, can be said to have adopted 
this principle in certain cases. For instance, some commentators con sider the International Court of Justice’s 
advisory opinion on nuclear weapons to be the first instance of a non liquet  declared by an international court in 
the sense of a legal question not being answerable by recourse to existing international law.   This note is b ased 
on Oxford Bibliographies.