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Terms of Reference of Panels: Art. 7

 
 IIEffect of Consultations on Terms of Reference of Panels
 Consultations are a crucial and integral part of the DSU and are intended to facilitate a mutually satisfactory settlement of the dispute, consistent with Article 3.7 of the DSU. However, as noted previously, what takes place in those consultations is not the concern of a panel. With regard to the issue discussed here, the Panel in Turkey-Textile and Clothing (DS34) rules that:2
 “Firstly, we note that in EC - Bananas III the panel concluded that the private nature of the bilateral consultations means that panels are normally not in a position to evaluate how the consultations process functions, but could only determine whether consultations, if required, did in fact take place. In this case, the parties never consulted, as Turkey declined to do so without the presence of the European Communities.
 In Korea - Taxes on Alcoholic Beverages the Panel concluded that: ‘… the WTO jurisprudence so far has not recognized any concept of “adequacy” of consultations. The only requirement under the DSU is that consultations were in fact held, or were at least requested, and that a period of sixty days has elapsed from the time consultations were requested to the time a request for a panel was made. …’
 We concur with this statement. We note also that our terms of reference (our mandate) are determined, not with reference to the request for consultations, or the content of the consultations, but only with reference to the request for the establishment of a panel. Consultations are a crucial and integral part of the DSU and are intended to facilitate a mutually satisfactory settlement of the dispute, consistent with Article 3.7 of the DSU. However, the only function we have as a panel in relation to Turkey''s procedural concerns is to ascertain whether consultations were properly requested, in terms of the DSU, that the complainant was ready to consult with the defendant and that the 60-day period has elapsed before the establishment of a panel was requested by the complainant. We consider that India complied with these procedural requirements and therefore we find it necessary to reject Turkey''s claim.”


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