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In sum, panels should be cautious about the “activist” postures in the GATT/WTO context. Many panels have in the past refused to undertake de novo review, wisely, since under current practice and systems, they are in any case poorly suited to engage in such a review.
After all, the international system and its dispute settlement procedures, in stark contrast to most national systems, depends heavily on voluntary compliance among participating members. Inappropriate panel “activism” could well alienate members, thus threatening the stability of the GATT/WTO dispute settlement procedure itself. Moreover, panels are well advised to be aware also of the potential shortcomings of the international procedures, shortcomings that sometimes relate to a shortage of resources, especially (but not only) resources for fact finding, as well to the problems of the need for a very broad multilateral consensus. Furthermore, panels should also recognize that national governments often have legitimate reasons for decisions they take. And more generally, panels should keep in mind that a broad-based, multilateral international institution must contend with a wide variety of legal, political, and cultural values, which counsel in favor of caution toward interpreting treaty obligations that may be appropriate to one society but not to other participants.13
However, panels must understand the central role of GATT/WTO adjudicatory system plays in enhancing the implementation, effectiveness, and credibility of the elaborate sets of rules for which the WTO has been created. Successful cooperation among national authorities to a large extent rests with the institutions given the responsibility to help carry out the WTO dispute settlement procedures. Thus, when a particular national authority’s activity or decision would undermine the effectiveness of WTO rules, or would establish a practice that could trigger damaging activities by other member countries, panels will undoubtedly show less deference. 14
To sum up, with this articulation of the standard of review based on Art. 11 of the DSU, a de novo review would be inappropriate. However, to adopt a policy of total deference to the findings of the national authorities could not ensure an “objective assessment” as foreseen by Art. 11 of the DSU. The applicable standard is neither de novo review as such, nor “total deference”, but rather the “objective assessment”. However, when may a panel be regarded as having failed to discharge its duty under Art. 11 of the DSU to make an objective assessment? As is what to be discussed in more detail below.
IVAllegation against Panels’ Standard of Review
In EC-Hormones (DS26/DS48), the European Communities claims that the Panel failed to make an objective assessment of the facts as required by Art. 11 of the DSU, and asks the Appellate Body to reverse the findings so arrived at by the Panel.The Appellate Body finds concerning this appeal that:15
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Clearly, not every error in the appreciation of the evidence (although it may give rise to a question of law) may be characterized as a failure to make an objective assessment of the facts. In the present appeal, the European Communities repeatedly claims that the Panel disregarded or distorted or misrepresented the evidence submitted by the European Communities and even the opinions expressed by the Panel''s own expert advisors. The duty to make an objective assessment of the facts is, among other things, an obligation to consider the evidence presented to a panel and to make factual findings on the basis of that evidence. The deliberate disregard of, or refusal to consider, the evidence submitted to a panel is incompatible with a panel''s duty to make an objective assessment of the facts. The wilful distortion or misrepresentation of the evidence put before a panel is similarly inconsistent with an objective assessment of the facts. ‘Disregard’ and ‘distortion’ and ‘misrepresentation’ of the evidence, in their ordinary signification in judicial and quasi-judicial processes, imply not simply an error of judgment in the appreciation of evidence but rather an egregious error that calls into question the good faith of a panel. A claim that a panel disregarded or distorted the evidence submitted to it is, in effect, a claim that the panel, to a greater or lesser degree, denied the party submitting the evidence fundamental fairness, or what in many jurisdictions is known as due process of law or natural justice”.
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