WT/GC/W/761  
 
4 February 2019  
(19-0617) Page: 1/2 
General Council  Original: English  
 
FOSTERING A DISCUSSI ON ON THE FUNCTIONIN G OF THE APPELLATE B ODY 
 
ADDRESSING THE ISSUE  OF PRECEDENT  
COMMUNICATION FROM H ONDURAS  
The following communication, dated 1 February 2019, is being circulated at the request of the 
delegation of Honduras.  
 
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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 
issue of precedent in WTO dispute settlement.  
1.2.  Concerns have been expressed regarding the alleged operation of a de facto  system of stare 
decisis  in WTO dispute settlement. Particularly, criticism has been raised regarding the Appellate 
Body's requirement that 'absent cogent reasons', panels must follow prior Appellate Body rulings 
regarding the same legal issue. However, others have suggested that the Appellate Body's approach 
is simply the result of the application of the rules on treaty interpretation and providing security and 
predictability to the system in that like cases should be treated alike.  
1.3.  In this paper we would like to discuss three po ssible approaches that could be considered to 
address the issue of precedent. These include:  
• Maintaining the status quo with respect to reliance upon prior Appellate Body reports . 
• Prohibiting panels and the Appellate Body from relying (explicitly) on prior  reports as 
precedent . 
• Introducing a hybrid mechanism for reliance on prior dispute settlement reports and for 
their incorporation into broader WTO law . 
1.4.  The approaches and options discussed 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  No change /status quo?  
a. Could/should Members permit the prevailing practice regarding reference and reliance on 
prior dispute settlement reports to continue?   Some have suggested that the obligation to 
decide a similar legal issue in the same manner is in line with the function of the dispute 
settlement system to provide ' security and predictability ' to the multilateral trading 
system . WT/GC/W/761  
 
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  2.2  Prohibiting any doctrine of precedent ? 
a. Could/should Members rectify the prevailing practice of following prior reports 'absent 
cogent reasons' by expressly prohibiting the Appellate Body and Panels from relying on 
prior reports as a basis for their decision?  
b. Could/should Members in the DSB/General Council consider, on a case by case basis, 
expunging from a report the reference to the notion of 'absent cogent reasons', where it 
is used to justify relying on previous reports? This could be done without prejudice to any 
future interp retations of the Appellate Body.  
2.3  A Possible middle path?  
a. Could/should Members consider a possible middle path between strict stare decisis and 
none at all? For example, could Members continue to adopt dispute settlement reports by 
negative consensus solely  with respect to the outcome for the disputing parties, while the 
question of the legal interpretation in the report, and whether it can form prec edent 
forming a part of WTO law , would become subject to positive consensus decision by 
Members?  
b. Could/should  Members consider an alternative approach where legal in terpretations of the 
Appellate B ody take the form of precedent only once they have been repeated a given 
number of times in similar contexts? This 'rule of reiteration', as it is called in certain civ il 
law countries, may be operationalized in several different ways, for instance:  
• a position of law that is resolved in the same way in a similar case mo re than a given 
number of times, e.g. (3) or (5) could automatically be considered as creating a 
precedent regarding that issue of law .1  
• a position of law that is resolved in the same way in a similar case more than a given 
number of times  e.g. (3) or (5) may then be subject to deliberations and discussions 
among Members regarding its status as prece dent. Members could then decide (by 
positive or negative consensus) upon the correctness of the interpretation and whether 
it should be followed as precedent in subsequent cases.  
c. Could/should the Appellate Body be instructed, in cases where all seven Appel late Body 
members endorse an interpretation in a specific report or on a thematic issue, to refer the 
relevant report/issue to the DSB for discussion as a precedent? The Appellate Body could 
then be obliged to take note of any substantial disagreement amon g Members on the 
correctness of the interpretation.  
 
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1 This would be in line with the Roman law principle of rerum perpetuo similiter iudicatarum auc toritas 
vim legis obtinere debe t which loosely translates to ' the authority of court decisions in cases that are always 
solved in the same way must have the force of law' .