The Illegitimate AB Report in Russia - Railway Equipment
Steve Charnovitz
5 February 2020
I write this commentary reluctantly. The World Trade Organization's Appellate Body has been unfairly maligned by the Trump Administration and by the international trade law community. I say "unfairly" because so far, all of the substantive complaints about the Appellate Body lacked legal validity. The establishment of the Appellate Body was a significant achievement in international law, and it is a shame that the US attack on the WTO's appeals court was not resisted.
But the impropriety of the new Appellate Body decision in Russia - Railway Equipment needs to be exposed.
On 4 February 2020, the Appellate Body issued a decision in Russia - Railway Equipment authored by an appellate bench that lacked the authority to do so. This was clearly an act of judicial overreach by the Appellate Body and by Thomas Graham, the Presiding Member of the division that issued the ultra vires decision. The three appellators on the division were Graham, Shree B.C. Servansing, and Hong Zhao. Zhao was a genuine member of the Appellate Body on 4 February, but the other two judges were not. Graham's term expired last year on 10 December 2019 (see WT/DSB/79). Servansing's term expired on 30 September 2018.
Under Rule 15 of the WTO's Working Procedures for Appellate Review, an appellator previously appointed to a division whose term has expired may continue to serve on the division if duly authorized by the Appellate Body. The exact language in Rule 15 is:
"A person who ceases to be a Member of the Appellate Body may, with the authorization of the Appellate Body and upon notification to the DSB, complete the disposition of any appeal to which that person was assigned while a Member, and that person shall, for that purpose only, be deemed to continue to be a Member of the Appellate Body."
This wise Rule provides the possibility that an appellator sitting on a division may continue to sit if properly authorized to do so. Conversely, if the appellator is improperly authorized, then such appellator cannot continue to sit.
In my view, a question exists as to whether an Appellate Body with fewer than half of its statutory seven members retains authority to make judicial extension decisions. At the time that Graham and Servansing's terms expired, the Appellate Body had fewer than four of its seven members. If the Appellate Body were writing a new rule, I don't see how that tribunal could validly do so if there were more than three vacancies. But on this matter, the Appellate Body is not using its rulemaking authority, but rather its rule implementation authority. For such a decision, I cannot say for sure that four or more vacancies cancels implementation authority.
By contrast, the dispute system rule is perfectly clear that the Appellate Body may only invest a former member (that is, "a person who ceases to be a Member") with authority to continue to serve on a division. In other words, the individual "deemed" to be an Appellate Body Member must no longer be an actual full member. The Appellate Body's decision to recommission a former member has to be made by the remaining members of the Appellate Body after the departure of the former appellator. An appellator whose term is expiring cannot participate in the decision to extend his own term. Doing so would be an obvious conflict of interest, but would also be a clear violation of the temporal structure of Rule 15.
Unfortunately, while Graham was serving as Chair of the Appellate Body, he allowed the Appellate Body to act to extend the service of two of the individuals on the Russia - Railway Equipment division before Rule 15 would have usable to enable the Appellate Body to do so. According to para. 17 of the Russia - Railway Equipment decision, the Appellate Body acted on or before 28 September 2018 to extend Servansing and on or before 9 December 2019 with regard to Graham himself. Thus, neither of these two Appellate Body extension decisions were taken in accordance with Rule 15 because both were done while the member to be deemed having continued was still serving on the Appellate Body.
An Appellate Body member whose term expires has no right to continue to be a judge on any division. He may continue to judge if properly authorized. But he cannot legally continue to judge if not properly authorized.
Nothing can be more harmful to the rule of law in the WTO than for the Appellate Body to act lawlessly. I hope that the DSB rejects this illegitimate action by the Appellate Body.
