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While in US-Tax Treatment (DS108), during the recourse of Art. 21.5 of the DSU, the Panel issued a decision to the parties refusing the request of the European Communities and stating that: “… we do not consider that Article 10.3 DSU requires that third parties receive all pre-meeting submissions of the parties (including rebuttal submissions) in the context of an accelerated proceeding under Article 21.5 DSU that involves only one meeting of the parties and third parties with the panel.”
The European Communities appeals this interpretive preliminary ruling by the Panel. In the view of the European Communities, this ruling conflicts with Art 10.3 of the DSU and does not respect the rights afforded to third parties under the DSU. According to the European Communities, although panels have a certain discretion to establish their own working procedures, they may not derogate from binding provisions of the DSU, including the requirement in Art. 10.3 of the DSU that “third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel”. In the view of the European Communities, this requirement means that third parties are entitled to receive all written submissions made prior to the first meeting of the panel - even if, as in many proceedings under Art. 21.5 of the DSU, there is only one meeting with the panel. As to this appeal, the Appellate Body rules as: 2
“In this appeal, we must determine whether, in refusing to require that the third parties be given access to the second, ‘rebuttal’, submissions filed prior to the sole substantive meeting with the Panel, the Panel acted inconsistently with any provision of the DSU.
In respect of the provisions of the DSU governing third party rights, we have already observed that, as the DSU currently stands, the rights of third parties in panel proceedings are limited to the rights granted under Article 10 and Appendix 3 to the DSU. Beyond those minimum guarantees, panels enjoy a discretion to grant additional participatory rights to third parties in particular cases, as long as such ‘enhanced’ rights are consistent with the provisions of the DSU and the principles of due process. However, panels have no discretion to circumscribe the rights guaranteed to third parties by the provisions of the DSU.
In this appeal, the European Communities alleges that the Working Procedures adopted by the Panel are inconsistent with the rights afforded to third parties pursuant to Article 10.3 of the DSU, which provides: ‘Third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel.’
Article 10.3 of the DSU is couched in mandatory language. By its terms, third parties ‘shall’ receive ‘the submissions of the parties to the first meeting of the panels’.Article 10.3 does not say that third parties shall receive ‘the first submissions’ of the parties, but rather that they shall receive ‘the submissions’ of the parties. The number of submissions that third parties are entitled to receive is not stated. Rather, Article 10.3 defines the submissions that third parties are entitled to receive by reference to a specific step in the proceedings - the first meeting of the panel. It follows, in our view, that, under this provision, third parties must be given all of the submissions that have been made by the parties to the panel up to the first meeting of the panel, irrespective of the number of such submissions which are made, including any rebuttal submissions filed in advance of the first meeting.
The Panel, however, reasoned that the use of the word ‘first’ in Article 10.3 ‘presupposes a context where there is more than one meeting of a Panel’. The Panel concluded, from this ‘presupposition’, that in proceedings involving a single panel meeting, Article 10.3 ‘must be understood as limiting third party rights in these proceedings to access to the first written submissions only, and as not including access to the written rebuttals’.
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