or their successors.
Annex 17.8. Remuneration and Payment of Expenses
1. The Commission shall fix the amounts of remuneration and expenses to be paid to the arbitrators, their assistants and experts.
2. Each party to the dispute shall bear the expenses of its appointed arbitrator. The expenses of the Chairman of the Arbitral Tribunal and the general expenses associated with the proceedings shall be borne by the losing Party.
3. Each arbitrator, assistant and expert shall keep a record and submit a final account of his time and expenses and the arbitration team shall keep a similar record and submit a final account of all general expenses.
Annex 17.5. Committees
Committee on Agricultural Trade (Article 3.17)
Committee on Trade in Goods (Article 3.18)
Committee on Origin (Article 4.15)
Trade Facilitation Committee (Article 6.11)
Committee on Sanitary and Phytosanitary Measures (Article 9.12) Committee on Technical Barriers to Trade (Article 10.16)
Chapter 18. DISPUTE SETTLEMENT
Section A. Dispute Settlement
Article 18.1. Definitions
For the purposes of this Chapter:
Consulting Party means any Party consulting under Article 18.6;
Disputing Party means the complaining Party or the Party complained against; Party complained against means the party against whom a claim is made; and Claimant means the party making a claim.
Article 18.2. Cooperation
1. The Parties shall at all times endeavor to reach agreement on the interpretation and application of this Agreement and shall, through cooperation and consultation, endeavor to reach a mutually satisfactory resolution of any matter that may affect its operation.
2. All solutions of matters arising under the provisions of this Chapter shall be consistent with this Treaty and shall not nullify or impair the benefits accruing to the Parties under this Treaty, nor shall they impede the attainment of the objectives of this Treaty.
3. Mutually satisfactory solutions agreed between the disputing Parties on matters arising under the provisions of this Chapter shall be notified to the Commission within fifteen (15) days from the agreement.
Article 18.3. Scope of Application
Except as otherwise provided in this Agreement, the procedure of this Chapter shall apply:
(a) to the prevention or settlement of all disputes between the Parties relating to the application or interpretation of this Agreement;
(b) where a Party considers that an existing or proposed measure of another Party is or may be inconsistent with the obligations of this Agreement;
(c) where a Party considers that an existing measure of another Party causes or may cause nullification or impairment within the meaning of Annex 18.3; or
(d) where a Party considers that another Party has in any way failed to comply with one or more of its obligations under this Agreement.
Article 18.4. Election of Forums
1. Disputes arising in connection with the provisions of this Agreement, the WTO Agreement or the conventions negotiated pursuant to the latter shall be settled in the forum of the complaining Party's choice.
2. Once a Party has requested the establishment of an arbitral tribunal under Article 18.14, or has requested the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO, the forum selected under paragraph 1 of this Article shall be exclusive of the others.
Article 18.5. Perishable Goods
In disputes concerning perishable goods (1), the time limits set forth in this Chapter shall be reduced by half, unless the Parties to a dispute agree on different time limits.
Article 18.6. Consultations
1. A Party may request in writing to another Party the holding of consultations under the terms of Article 18.2, when any of the situations contemplated in Article 18.3 of this Agreement arise.
2. The requesting Party shall deliver the request to the other Party and explain the reasons for the request, including identification of the measure in force or proposed measure or other matter at issue and the legal basis for the complaint. A copy of the request shall be sent simultaneously to the other Parties to this Agreement.
3. The consulting Parties shall use their best efforts to reach a mutually satisfactory resolution of any matter through consultations under this Article or other consultative provisions of this Agreement. To that end, the Parties shall:
(a) provide such information as will permit a full consideration of how the existing or proposed measure, or any other matter, may affect the operation or application of this Agreement; and
(b) treat confidential information exchanged during consultations in the same manner as it is treated by the Party that provided it.
4. Consultations may be requested and conducted in person or by any technological means available to the Parties. Face-to-face meetings shall be held in the capital city of the Party from which the consultations have been requested, unless otherwise agreed by the consulting Parties.
5. After one (1) year of inactivity from the date of the last meeting in the consultation phase and in the event that the situation that gave rise to the dispute persists, the consulting Party shall request new consultations.
Article 18.7. Refusal of Consultation
If the Party consulted does not reply to the request for consultations within ten (10) days of notification of the request, proposing a date for a meeting, the consulting Party may refer the matter to the Commission without waiting for the thirty (30) day period referred to in Article 18.8 to elapse, or it may proceed in accordance with Article 18.11.
Article 18.8. Intervention of the Commission
1. Any consulting Party may request in writing that the Commission be convened, provided that a matter is not resolved in any of the following cases:
(a) in the case set forth in Article 18.7;
(b) within sixty (60) days of receipt of the request for consultations or within such other period as the consulting Parties may agree; or
(c) within thirty (30) days after receipt of the request for consultations in the case of perishable goods.
2. The Party requesting the intervention of the Commission shall explain the reasons for the request and shall include identification of the measure in force or proposed or other matter at issue and an indication of the legal basis of the complaint.
3. The request shall be submitted to the Commission. A copy of the request shall be sent to the other Party.
Article 18.9. Proceedings Before the Commission
1. Unless the Party requesting the intervention of the Commission decides on a longer period, the Commission shall meet within ten (10) days of receipt of the request and shall seek to resolve the dispute without delay.
2. In order to assist the parties to the dispute in reaching a mutually satisfactory resolution of the dispute, the Commission may:
(a) convene technical advisors or set up such working groups or expert groups as it deems necessary;
(b) use of good offices, conciliation, mediation or other means of alternative dispute resolution; or
(c) formulate recommendations.
The costs incurred by the processes set forth in paragraphs (a) and (b) shall be borne by the Parties in controversy, in equal parts.
3. All agreements reached in the proceeding before the Commission shall be complied with within the time limits indicated therein, which may not exceed three (3) months or, as the case may be, within the reasonable period of time established by the Commission for such purpose. For the purpose of reviewing such compliance, the Party against which the proceeding before the Commission was requested shall submit to the Commission a monthly written report on the progress of compliance.
4. The Commission may meet face-to-face or non-face-to-face, and in the latter case may use any technological means available to the Parties, which will allow it to comply with this stage of the procedure.
Article 18.10. Joinder of Proceedings
Unless otherwise decided, the Commission shall join two (2) or more proceedings before it under this Chapter relating to the same measure or matter. Likewise, it may join two (2) or more proceedings concerning other matters before it, when it considers it convenient to examine them jointly.
Article 18.11. Request for the Establishment of the Arbitral Tribunal
1. A Party may request in writing the establishment of an arbitral tribunal whenever a matter is not resolved in any of the following cases:
(a) in the case set forth in Article 18.7;
(b) within thirty (30) days after receipt of the request for a meeting of the Commission or any other time limit agreed upon by the disputing Parties, or when the meeting has not been held in accordance with the provisions of Article 18.9 (1);
(c) in the case of joinder of proceedings when the matter has not been resolved within thirty (30) days from the date of the meeting of the Commission to deal with the most recent matter submitted to it, in accordance with Article 18.10;
(d) where the Parties have not resolved the dispute at the consultation stage within the time limits of thirty (30) days provided for in Article 18.5 or sixty (60) days provided for in Article 18.6 or within another time limit agreed by the Parties in consultations; or
(e) where the Party requesting the intervention of the Commission considers, after the expiration of the time limit indicated by the Commission, that no measures were taken to comply with the agreement obtained in accordance with Article 18.9.
2. The complaining Party shall deliver the request to the other Party and a copy to the other Parties and the Commission, stating the reasons for the request, including identification of the measure or other matter at issue and an indication of the legal basis of the complaint.
3. The establishment of an arbitral tribunal may not be requested to review a proposed measure.
Article 18.12. List of Arbitrators
1. Each Party shall appoint, no later than six (6) months after the entry into force of this Agreement, to the roster of arbitrators, four (4) nationals and two (2) non-nationals of the Parties, who are qualified and willing to serve as arbitrators. Such nominations shall be sent to the office referred to in Article 17.3 (Administration of Dispute Settlement Procedures).
2. The members of the list of arbitrators shall meet the qualifications stipulated in Article 18.13 (1).
3. The members of the list of arbitrators shall remain on the list for a period of three (3) years and may be re-elected for equal periods. However, either Party may revise its list of arbitrators before the expiration of such term. In the latter case, the new members of the list of arbitrators shall serve for the remainder of the original term, without prejudice to their re-election.
4. Every three (3) years, a new process for the formation of the list of arbitrators shall be carried out. For this purpose, the Parties shall send to the office referred to in Article 17.3 (Administration of Dispute Settlement Procedures) their appointed arbitrators before the expiration of the aforementioned period, or, as the case may be, an express manifestation of their wish to re-elect those already appointed. In case of silence, it shall be understood that the arbitrators of the respective Party have been re-elected.
5. The Parties may use the list of arbitrators even if it is not complete.
6. If at the expiration of the three (3) year period for which the members of the list of arbitrators were appointed, one of them is appointed as arbitrator in an ongoing proceeding, he/she shall continue to serve in that specific proceeding until its conclusion.
Article 18.13. Qualifications of Arbitrators
1. All referees shall meet the following qualifications:
(a) have specialized knowledge or experience in law, international trade, matters related to the matters contained in this Agreement or in the settlement of disputes arising from international trade agreements;
(b) be chosen strictly on the basis of their objectivity, impartiality, probity, reliability and sound judgment; and
(c) without prejudice to the provisions of Article 18.12, not be related to the Parties, not receive instructions from the Parties and be independent.
2. The members of the arbitral tribunal shall comply with the Code of Conduct established by the Commission.
3. Persons who have intervened in a dispute, as referred to in Article 18.9, may not be arbitrators for the same dispute.
Article 18.14. Integration of the Arbitral Tribunal
The following procedure shall apply for the establishment of the Arbitral Tribunal:
(a) the disputing Parties shall meet within fifteen (15) days after receipt of the request for the establishment of the Arbitral Tribunal to agree on its composition, unless they agree on a longer period of time. The meeting shall be held in the territory of the Party complained against unless the disputing Parties decide otherwise;
(b) the disputing Parties should endeavor to select arbitrators who have relevant knowledge or experience in the subject matter of the dispute;
(c) the arbitral tribunal shall be composed of three (3) members;
(d) within the framework of the meeting for the composition of the arbitral tribunal, the disputing Parties shall endeavor to agree on the appointment of the chairman of the arbitral tribunal from the list of arbitrators referred to in Article 18.12, who may not be a national of either Party;
(e) within the framework of the meeting for the composition of the arbitral tribunal, each disputing Party shall select an arbitrator from the list referred to in Article 18.12 who may have the nationality of the Party that has appointed him or her;
(f) if the disputing Parties are unable to agree on the appointment of the chairman of the arbitral tribunal within the time limit referred to in subparagraph (a), the chairman shall be appointed within one business day after the expiration of such time limit, by lot drawn by the disputing Parties from among the members of the list who are not nationals of the Parties. The chairman shall be a national of a State with which the Parties to the dispute have diplomatic relations;
(g) if a disputing Party fails to appoint an arbitrator within the time limit referred to in subparagraph (a), the arbitrator shall be appointed within the next business day by lot by the disputing Parties from among the members of the list referred to in Article 18.12; and
(h) the disputing Parties shall appoint at the meeting, from among the members of the list referred to in Article 18.12, alternate arbitrators in the event of non-acceptance, death, resignation or removal of one of the appointed arbitrators, in accordance with the rules for the composition of the arbitral tribunal contained in this Article.
2. The arbitrators shall preferably be selected from the list. Any disputing Party may challenge, without giving a reason, at the integration meeting, any person not on the list who is proposed as a member of the arbitral tribunal by a disputing Party. In this case, such person may not be a member of the arbitral tribunal.
3. The disputing Parties shall communicate to the office referred to in Article 17.3 (Administration of Dispute Settlement Procedures) the appointment of the arbitrators of the arbitral tribunal within fifteen (15) days from the date of their appointment. The arbitral tribunal shall be constituted once the arbitrators have expressed their acceptance to said office.
Article 18.15. Model Rules of Procedure
1. Within six (6) months following the entry into force of this Agreement, the Commission shall approve the Model Rules of Procedure in order to regulate the procedural aspects necessary for the proper development of all the stages contained in this Chapter. Likewise, these rules shall regulate the development of the arbitration process in accordance with the following principles:
(a) the proceedings shall guarantee the right to at least one hearing before the arbitral tribunal, as well as the opportunity to present written pleadings and replies, and shall allow the use of any technological means that guarantee their authenticity;
(b) the hearings before the arbitral tribunal, the deliberations, as well as all pleadings and communications presented therein, shall be confidential; and
(c) the arbitral tribunal shall issue a work schedule considering that within the first sixty (60) days from its constitution, it shall be available to the disputing Parties to receive their written communications and to hold hearings, and that the last thirty (30) days of the period it has to issue its draft award shall be devoted exclusively to the analysis of the information available, without the disputing Parties to the dispute being able to submit additional information, unless the arbitral tribunal, on its own initiative or at the request of a disputing Party, deems it necessary.
2. Unless otherwise agreed by the disputing Parties, the proceedings before the arbitral tribunal shall be governed by the Model Rules of Procedure.
3. Unless the disputing Parties agree otherwise within twenty (20) days of receipt of the request for the establishment of the arbitral tribunal, the terms of reference of the arbitral tribunal shall be:
"Examine, in the light of the applicable provisions of this Treaty, the matter submitted to it under the terms of the request for the establishment of the arbitral tribunal and make the Award."
4. If the complaining Party alleges in the request for the establishment of the arbitral tribunal that a matter has given rise to nullification or impairment of benefits within the meaning of Article 18.3(c), the terms of reference shall so state.
5. Where the complaining Party requires in the request for the establishment of the arbitral tribunal that the tribunal make findings as to the extent of the adverse trade effects on that Party of a breach of the obligations of this Agreement by the other Party, or that a measure is found to be inconsistent with the provisions of this Agreement, or that such measure has caused nullification or impairment within the meaning of Article 18.3(c), the terms of reference shall so state.
Article 18.16. Information and Technical Assistance
At the request of a disputing Party or on its own motion, the arbitral tribunal may seek information and technical advice from such persons or institutions as it deems appropriate.
Article 18.17. Draft Award
1. Unless the disputing Parties agree otherwise, the arbitral tribunal shall make a draft award on the basis of the applicable provisions of this Agreement, the submissions, arguments and evidence presented by the disputing Parties and any information it has received pursuant to the preceding Article.
2. Unless the disputing Parties decide otherwise, the arbitral tribunal shall, within ninety (90) days of its constitution, submit to the disputing Parties a draft award containing:
(a) findings of fact, including any arising from an application under Article 18.15(5);
(b) a determination as to whether the measure in question is inconsistent with the obligations under this Agreement, or is a cause of nullification or impairment within the meaning of Annex 18.3 or any other determination requested in the mandate; and
(c) the opinions of the arbitrators on the issues on which there was no unanimity.
3. The disputing Parties may submit written comments to the arbitral tribunal on the draft award within fifteen (15) days of its submission.
4. In the case of paragraph 3, after examining the written observations, the arbitral tribunal may, on its own initiative or at the request of a disputing Party:
(a) request the observations of any disputing Party;
(b) conduct any due diligence it deems appropriate; or
(c) reconsider the draft award. Article 18.18 Award 1. The arbitral tribunal shall communicate to the disputing Parties its Award, which shall include written opinions on the issues on which there is no unanimity, within thirty (30) days after the submission of the draft award, unless the disputing Parties agree on a different time limit.
2. The arbitral tribunal shall not disclose confidential information in its Award, but may state findings based on such information.
3. The disputing Parties shall make the Award available to the public by any means within fifteen (15) days of its notification. The lack of publicity of the Award by one of the disputing Parties shall not prejudice the enforceability of the Award.
4. No arbitral tribunal may disclose in its Award the identity of the arbitrators who voted with the majority or minority.
Article 18.19. Compliance with the Award
1. The Award shall be binding on the disputing Parties under the terms and within the time limits ordered by the Award, which shall not exceed six (6) months from its notification, unless the Parties agree on another time limit.
2. Where the award of the arbitral tribunal declares that the measure is incompatible with the provisions of this Agreement, the Party complained against shall refrain from enforcing the measure or shall revoke it.
3. Where the award of the arbitral tribunal finds that the measure causes nullification or impairment within the meaning of Article 18.3(c) it shall determine the level of nullification or impairment and may suggest, if the disputing Parties so request, such adjustments as it considers mutually satisfactory to them.
Article 18.20. Suspension of Benefits
1. Unless the disputing Parties have notified the Commission within five (5) days after the expiration of the time limit fixed in the Award or otherwise agreed by the disputing Parties, that the Award has been complied with, the complaining Party may immediately apply the suspension of benefits, which shall be notified to the Party complained against, indicating, in addition, the level of such suspension. The level of the suspension of benefits shall have an effect equivalent to the benefits foregone.
2. In considering the benefits to be suspended pursuant to paragraph 1:
(a) the complaining Party shall first seek to suspend benefits within the same sector or sectors that are affected by the measure, or by another matter that the arbitral tribunal has found to be inconsistent with the obligations under this Agreement, or that has been the cause of nullification or impairment; and
(b) if the complaining Party considers that it is not feasible or effective to suspend benefits in the same sector or sectors, it may suspend benefits in other sectors.
3. If the Party complained against considers that the level of benefits suspended is excessive, it may request the office referred to in Article 17.3 (Administration of Dispute Settlement Procedures) to convene the arbitral tribunal for the suspension of benefits so that it may examine the matter.
(a) a Party considers that a question of interpretation or application of this Agreement arising or arising in a judicial or administrative proceeding of another Party warrants interpretation by the Commission; or
(b) a Party communicates to it the receipt of a request for an opinion on
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a question of interpretation or application of this Agreement in a judicial or administrative proceeding of that Party.
2. The Party in whose territory the judicial or administrative proceeding takes place shall present the interpretation or response of the Commission in accordance with the procedures of that forum.
3. When the Commission fails to issue an interpretation or answer, any Party may submit its own opinion in the judicial or administrative proceedings, in accordance with the procedures of that forum.
Article 18.23. Rights of Individuals
No Party may grant a right of action under its law against another Party on the ground that a measure of the latter Party is inconsistent with this Agreement.
Article 18.24. Alternative Means of Dispute Resolution between Private Parties
1. To the fullest extent possible, each Party shall promote and facilitate arbitration and other alternative means of settling international commercial disputes between private parties in the free trade area.
2. To this end, each Party shall have appropriate procedures to ensure the observance of the International Arbitration Conventions it has ratified, and the recognition and enforcement of arbitral awards rendered in such disputes.
3. The Commission may establish an Advisory Committee on Private Commercial Disputes, composed of persons with expertise or experience in the resolution of private international commercial disputes. Once constituted, the Committee shall submit reports and recommendations of a general nature to the Commission on the existence, use and effectiveness of arbitration and other procedures for the settlement of disputes between private parties.
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ANNEX 18.3 Cancellation or Impairment
1. A Party may have recourse to the dispute settlement mechanism of this Chapter where, by virtue of the application of a measure of the other Party that does not contravene this Agreement, it considers that the benefits that it could
reasonably have expected to receive from the application of such measure are nullified or impaired:
(a) Part Two (Trade in Goods); (b) Part Three (Technical Barriers to Trade); or (c) Chapter 13 (Cross-Border Trade in Services).
(a) a Party considers that a question of interpretation or application of this Agreement arising or arising in a judicial or administrative proceeding of another Party warrants interpretation by the Commission; or