Olivos Protocol for the Settlement of Disputes in MERCOSUR, 18th February 2002 (2251 UNTS 243, UN Reg No A-37341), OXIO 148
Common Market of the South [MERCOSUR]; Permanent Review Court
- Subject(s):
- Jurisdiction — International courts and tribunals, procedure
Core Issues
1. The changes introduced by the Olivos Protocol for the Settlement of Disputes in MERCOSUR, in respect of the non-adjudicative mechanisms of dispute resolution.
2. The role of the Permanent Court of Appeals in resolving conflicts within the MERCOSUR area.
This headnote pertains to: Olivos Protocol for the Settlement of Disputes in MERCOSUR, an instrument the text of which has been prepared by and/or adopted in the framework of an international organization. Jump to full text
Background
The text of the Olivos Protocol for the Settlement of Disputes in MERCOSUR (‘Olivos Protocol’ or ‘Protocol’) was adopted on 18 February 2002 and the Protocol entered into force on 1 January 2004. The Olivos Protocol was an additional instrument to the Treaty establishing a Common Market between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay, and the Eastern Republic of Uruguay (‘Treaty of Asunción’), and established a dispute resolution system for MERCOSUR.
When MERCOSUR was created in 1991, its constitutive treaty, the Treaty of Asunción, set out that the newly established customs area would be endowed with institutions having both executive (Article 9 of the Treaty of Asunción) and dispute-settlement (Article 3 of the Treaty of Asunción) functions. The dispute-settlement system was laid down by another protocol to the Treaty of Asunción, the Brasilia Protocol for the Solution of Controversies (‘Brasilia Protocol’), on 17 December 1991.
During the late 1990s, a number of high-level meetings took place between the four states which were party to the Treaty of Asunción, with a view to improving the dispute-settlement system introduced by the Brasília Protocol. One particularly important meeting took place in the year 2000 in the city of Florianopolis, Brazil. The central topic of discussion was the improvement of the dispute-settlement system as laid out by the Brasilia Protocol. In this meeting, State Parties decided to postpone the presentation of a definitive proposal for the reform of the dispute settlement system and created a working group to deal with the details of the required institutional change. Amongst the contentious issues for which a solution had to be found were the appointment of arbitrators to a common list, the degree to which the intervention of the Common Market Group (‘CMG’) in conflicts was compulsory, and the creation of a permanent court to review decisions taken in arbitration proceedings. After several meetings of the High-Level Group (‘HLG’), a decision was made to create a Permanent Appeals Court (‘PAC’ or ‘Court’) and set up a system of consultation to this court in case of doubt about the application of the MERCOSUR normative instruments, and to make intervention by the CMG to mediate disputes optional rather than compulsory.
Finally, on 18 February 2002, at the summit of Olivos, Argentina, the Olivos Protocol was approved by the State Parties and poised to replace the dispute resolution system set up by the Brasilia Protocol. After ratification by the State Parties, the Protocol entered into force in February 2004. The rules of procedure for the Olivos Protocol dispute-settlement system, which defined in even more detail the procedure before the various dispute-settlement mechanisms, was approved by the CMG about a year later (Reglamento del Protocolo de Olivos para la Solución de Controversias en el Mercosur (‘Reglamento del Protocolo’)). With this, the HLG, created to discuss the improvement of the dispute-settlement system, was dissolved and the new system put in place.
Summary
The Olivos Protocol established the rules and procedures for solving conflicts, as well as those for the creation of a PAC for the arbitration scheme laid down in the Protocol. It contains fifty-six articles covering the whole of the dispute resolution system, plus technical provisions regarding adherence to the Protocol. It is divided into fourteen chapters, the first eight dealing with the various forms of dispute resolution, and the last seven dealing with other specific topics, including claims put forward by private entities.
Chapter I of the Protocol, which only contains Article 1, provided for the scope of application of the Protocol. All disputes regarding the ‘interpretation, application[,] or breach of the Treaty of Asunción, the Protocol of Ouro Preto, the protocols and agreements executed within the framework of the Treaty of Asunción, the Decisions of the Common Market Council, the Resolutions of the Common Market Group[,] and the Instructions of the MERCOSUR Trade Commission’ can be brought by one of the Member States to resolution by one of the means established in the Protocol. [Art 1] In Article 3, the Protocol sets out the conditions under which the Common Market Council can set up specific mechanisms to request consultative opinions from the PAC.
Chapters IV–VII of the Protocol specifically define the already established means of solving conflicts within the scope of the Treaty of Asunción, and the new mechanisms introduced by the Olivos Protocol. These are: (1) direct negotiations; (2) optional involvement of the CMG; (3) ad hoc arbitration proceedings; and (4) the review procedure. [Arts 4–24] In contrast to the Brasilia Protocol, if negotiations have failed, totally or partially, to resolve the dispute, states can immediately seek recourse to arbitration. The intervention from the CMG between these two phases was made optional. [Art 6(1)] Nevertheless, if states decide, they can also ask for mediation from the CMG to attempt to resolve the conflict. [Arts 6(2)–(3), 7] In this case, the procedure may not last longer than 30 days. [Art 8]
Ad hoc arbitration proceedings can be triggered whenever direct negotiations have failed or intervention by the CMG has not aided in the resolution of the conflict. [Art 9] If states decide to make use of arbitration, they should first communicate this to the Administrative Secretariat of MERCOSUR, which will then communicate this decision to the CMG and the other state involved in the dispute. [Art 9(2)]
When a dispute arises, the corresponding arbitration panel was to be composed of three arbitrators, with one appointed by each state from a list held by the Administrative Secretariat. [Art 10]. The states party to the dispute then choose a third arbitrator, of a different nationality to the states party to the dispute, from a different and separate list of ‘third-arbitrators’ also held by the Administrative Secretariat. [Art 10(3)] The way in which these lists are composed is described in Article 11 of the Protocol. Furthermore, the Protocol also provides for provisional measures to be decided by the arbitral court. [Art 15] Finally, arbitral courts have sixty days to issue an award. This period can be extended by up to thirty days. [Art 16]
Permanent Appeals Court
The great novelty introduced by the Olivos Protocol was the PAC (Tribunal Permanente de Revisión. The PAC had been envisaged as a mechanism of last resort to review decisions of ad hoc arbitration courts. [Art 17] However, in the final version of the Protocol, the Court was also attributed specific jurisdiction over particular types of cases. [Art 23] Thus, the PAC may be requested to provide consultative opinions regarding the interpretation of MERCOSUR normative instruments, such as protocols and agreements within the framework of the Treaty of Assunción, resolutions of the CMG, decisions of the Common Market Council, and joint guidelines of the Committee of Commerce of MERCOSUR—all of which are provided for in Article 1 of the Olivos Protocol (Article 2 Reglamento del Protocolo). [Art 3] These consultative opinions may be requested by any Member State and the executive bodies of MERCOSUR (Articles 3–4 Reglamento del Protocolo), and the PAC has up to forty-five days to provide its consultative opinion (Article 7 Reglamento del Protocolo). However, this opinion has no binding effect on the Member States or other MERCOSUR institutions (Article 11 Reglamento del Protocolo).
The PAC is composed of five arbitrators, four of which are chosen by each of the Member States and a fifth chosen unanimously by State Parties to the Treaty of Assunción. [Art 18 (1)–(3)] The fifth arbitrator is chosen from a list of eight individuals, to which each of the four states have contributed two names. [Art 18(3)] The rules for establishing this list are the same as those for choosing the president of the arbitration courts. [Art 11(2)] Arbitrators of the PAC shall be permanently available to work whenever the Court is called to answer upon a case. [Art 19] In order to have an award reviewed, states must file a motion within fifteen days of the notification of issuance of the arbitral award. [Art 17(1)] The scope of review shall be limited to the legal issue dealt with in the dispute, and decisions taken on the basis of ex aequo et bono principles by the ad hoc arbitration court cannot be reviewed by the PAC. [Art 17(2)–(3)] The other party to the dispute shall have the right to reply to the motion, and the decision of the PAC shall be limited to confirming, modifying, or revoking ‘the juridical basis and the decisions of the [ad hoc] Arbitration Court’. [Arts 21–22] Besides acting as a court of last resort for arbitration in MERCOSUR, the PAC also has jurisdiction over some specific types of case. In fact, this jurisdiction is not determined by the subject of the dispute, but rather by the choice of the parties. After negotiations or intervention by the CMG, parties may decide to initiate proceedings before the PAC. [Art 23(1)] In such cases, the PAC will act in the same way as an ad hoc arbitration court; however, its decisions will be final and have res judicata effects for the parties, with no appeal. [Art 23(2)]
Jurisdiction and applicable law for both the arbitral courts and the PAC are determined in Chapter X of the Protocol. State Parties recognize the jurisdiction of the ad hoc arbitration courts without any special agreement for the disputes arising under the scope determined by the Protocol. [Art 33] The applicable law is determined by Article 1 of the Protocol, including the resolutions of the CMG and the instructions of the MERCOSUR Trade Committee. [Art 34(1)] This does not prevent the arbitration courts from deciding on the basis of ex aequo et bono. [Art 34(2)]
Chapter VIII of the Protocol establishes, for example, that despite being binding upon the parties of the dispute, states may ask the courts for clarification regarding the award. [Art 28]
Finally, Chapter XI of the Protocol deals with claims by private persons and essentially reaffirmed what was previously stated by the Brasilia Protocol. It set out how actions can be initiated before the respective national chapters of the CMG in each country, but maintains limitations to their actions. [Art 40] Chapters XII–XIV set out specific terms for restricted topics, including the counting of delays, the rules of procedure that the PAC shall adopt, and the language of proceedings— ie Portuguese and Spanish. [Arts 48, 51, 56]
Analysis
The Olivos Protocol represented a major advance in the development of a dispute-resolution system within MERCOSUR. The major innovation introduced by the Protocol was the PAC, although so far the court has not been very active, to date counting only three cases and three consultations. The introduction of the PAC meant that there was now an instance for appealing arbitral decisions. In an attempt to create a mechanism to render the case law of MERCOSUR uniform, states created a dispute-resolution system with an institution that had authority to do so.
The Protocol has, however, also been the object of criticism. The main problem lies in the fact that the PAC does not have a proper role as a court of justice within MERCOSUR, the consequence being that its decisions are not always judged to carry sufficient legal authority and therefore tend to be scrutinised by national courts. This is particularly the case with respect to its opinions. National courts will, in many cases, disagree with the position taken by the PAC when it comes to its interpretation of the relevant MERCOSUR normative instruments. This means, for instance, that PAC decisions do not enjoy the same level of authority and respect as those of the European Court of Justice. This sort of judicial review is most often exercised by the highest courts in the various countries, which often leads to an asymmetry in the way decisions are implemented domestically. So far, this has been the most fundamental criticism made of the functioning of the PAC.
With respect to the other mechanisms, some of the criticisms that had been levelled at the Brasilia Protocol are as valid as those about the mechanisms envisaged by the Olivos Protocol. For instance, with regards to the intervention of the CMG, the fact that its recommendations are not binding does not necessarily aid in the resolution of conflicts, but rather extends the conflicts unnecessarily in some cases. On the other hand, others welcome that these interventions are not compulsory.
When compared to its predecessor, the Brasilia Protocol, the major changes brought by the Olivos Protocol concern the degree to which the intervention of the CMG is compulsory, and the introduction of the PAC. Many of the changes introduced by the Protocol, even if they did not fully reform the system, were welcomed. The Protocol did show that integration through judicialization and law was as important as integration through politics.
Impact
So far, the Olivos Protocol has had limited impact in the sphere of MERCOSUR. Of note is the work of the PAC, even if it has had limited activity to date. The PAC has had only three contentious cases to pronounce upon, and has offered three consultative opinions. States have resorted to the other mechanisms, as was previously done in the Brasilia Protocol, whenever they understood that a request for arbitration or for a decision of the PAC was not necessary to solve a particular dispute.
The three contentious cases included two trade issues and one political dispute. The first case was launched by Uruguay against Argentina and concerned the review of a decision of an arbitral court on the prohibition of importation by Argentina of remodelled pneumatics produced by Uruguay (Laudo n. 01/2005). The first decision on this case was taken in December 2005 and favoured Uruguay. In 2006, Argentina asked the PAC to clarify aspects of this decision, which gave rise to a following decision on the same case (Laudo n. 01/2006). The second case of review was brought by Argentina and concerned the case of obstacles imposed on the free circulation of goods on the St Gral and Gral San Martin Bridges in the Argentinian territory. A review in this case was requested by Argentina and led to a decision by the PAC in 2006 (Laudo n. 02/2006). This appeal was rejected and further confirmed the initial award, favouring Uruguay in the dispute. The third case which the PAC has dealt with related to the temporary suspension of Paraguay as a member, following the impeachment of its President in 2012 and the subsequent admission of Venezuela to MERCOSUR. Paraguay requested the PAC to pronounce on the legality of the actions taken by the other Member States and to reinstate Paraguay’s position within MERCOSUR. This was the first time that the Permanent Review Tribunal (TPR) had been asked to decide on a case through direct access. In this case, the PAC decided that it had no jurisdiction over the matter and rejected the request without dealing with the merits (Laudo n. 01/2012).
The PAC also had the opportunity to provide three consultative opinions. In the first—requested in 2007 by the Supreme Court of Justice of Paraguay, regarding consumer rights—the PAC declared that, because the Protocol of Santa Maria had not yet been internalized by any country, it could not be used against ordinary laws of the countries (Consultative Opinion N. 01/2007). Following this, the PAC was consulted in 2008 by the Supreme Court of Justice of Uruguay, regarding whether decisions of the CMG and Treaty of Asunción should be considered over national ordinary law, in particular concerning the necessity of payment of a ‘consular tax’ imposed by an internal act of Uruguay. In this case, the PAC declared that, once internalized, agreements, resolutions, and decisions of MERCOSUR authorities must be respected in the same way as ordinary law (Consultative Opinion N. 01/2008). However, it did say that it could only determine whether the act being examined in the case was or was not in accordance with MERCOSUR regulations once competent authorities in Uruguay determined its proper content, whether such consular tax was a tax or a fee, and its position within the larger tax system of Uruguay. The last consultative opinion of the PAC was given in 2009 and referred to the same question of the necessity of payment of a consular tax imposed by an internal act of Uruguay. The PAC decided in the same way as it had in 2008 (Consultative Opinion N. 01/2009).
Further analysis of Relevant Materials
Leading Comments
C Zlata Drnas and W Hummer (ed) MERCOSUR y Unión Europea (Buenos Aires, Lerner Publisher 2008)
A Pastori Fillol ‘La ejecución de las sentencias y laudos en la integración regional Análisis comparativo de los distintos procedimientos instituidos en la Unión Europea y en el Mercosur’ (2006) 5 Cuadernos de Integración Europea 61–93 [http://www.cuadernosie.info]
A Perotti ‘¿Quién paga los costos del incumplimiento de las Sentencias del Tribunal Permanente de Revisión (MERCOSUR)? Responsabilidad del Estado por violación del Derecho de la integración’ in Revista Quaestio Iuris (Universidde do Estado do Rio de Janeiro 2012) [http://www.e-publicacoes.uerj.br/index.php/quaestioiuris/article/view/3665]
S Negro Derecho de la Integración: Manual (Euros editores, Buenos Aires Editorial B de F 2013)
Cases Cited
Permanent Appeals Court of MERCOSUR
Laudo n. 01/2012, Tribunal Permanente de Revisión, 21 July 2012
Consultative Opinion N. 01/2009, Consultative opinion, 15 June 2009
Consultative Opinion N. 01/2008, Consultative opinion, 24 April 2009
Consultative Opinion N. 01/2007, Consultative opinion, 3 April 2007
Laudo n. 01/2006, Tribunal Permanente de Revisión, 13 January 2006
Laudo n. 02/2006, Tribunal Permanente de Revisión, 6 July 2006
Laudo n. 01/2005, Tribunal Permanente de Revisión, 20 December 2005
Materials Cited
Related Cases
Permanent Appeals Court of MERCOSUR
Laudo 01/2008, Tribunal Permanente de Revisión, 25 April 2008
Source text
The Republic Argentina, the Federative Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, hereinafter "States Parties";
HAVING REGARD to
the Treaty of Asuncion, the Protocol of Brasilia and the Protocol of Ouro Preto;
RECOGNIZING
that the evolution of the integration process in Mercosur requires the improvement of the system solution of disputes;
CONSIDERING
the need to ensure the correct interpretation, implementation and enforcement of the fundamental tools of the integration process and the set of rules of Mercosur, in a consistent and systematic manner;
CONVINCED
the desirability of making specific changes in the settlement of disputes in order to consolidate the system legal certainty within Mercosur;
HAVE AGREED as follows:
Chapter I Disputes Between States Parties
Article 1 Scope
1. Disputes arising between States Parties concerning the interpretation, application or non- compliance with the Treaty of Asunción, the Ouro Preto, protocols and agreements Protocol within the framework of the Treaty of Asunción, the Decisions of the Common Market Council, the Resolution of Market Group and the Joint Guidelines Committee of Commerce of Mercosur will be subject to the procedures set out in this Protocol.
2. Disputes within the scope of application of this Protocol that may also be subject to the dispute settlement system of the World Organization of Trade or other preferential trading schemes that are part of the individual member states of MERCOSUR may be subject to one or other jurisdiction, the choice of the complainant. Notwithstanding the foregoing, the parties to the dispute may, by mutual agreement, set the forum.
Once initiated proceedings for settlement of disputes in accordance with the preceding paragraph, neither party may have recourse to dispute settlement mechanisms established in other forums regarding the same object, defined in accordance with Article 14 of this Protocol.
Nevertheless, within the framework of established this numeral, the Council of the Common Market shall regulate matters concerning the choice of forum.
Chapter II Mechanisms for Technical Aspects
Chapter IV Direct Negotiations
Article 4 Negotiations
States parties to a dispute attempt to resolve it, first of all, through direct negotiations.
Chapter V Intervention Group Common Market
Article 6 Optional procedure before the GMC
1. Whether through direct negotiations do not reach an agreement or if the dispute is resolved only partially, any of the States parties to the dispute may directly initiate the arbitration procedure provided for in Chapter VI.
2. Without prejudice to the preceding paragraph, the States parties to the dispute may, by mutual agreement, submit it to the Common Market Group.
-
i. In this case, the Common Market Group will assess the situation, giving opportunity to the parties to the dispute to present their respective positions, requiring, when necessary the advice of experts selected from the list referred to in Article 43 of this Protocol.
-
ii. Expenses relating to such advice shall be borne in equal amounts by States parties to the dispute or in the proportion determined by the Common Market Group.
3. The dispute may also be brought to the Common Market Group is another state that is not party to the dispute, justifiably ask such a procedure at the end of direct negotiations. In this case, the arbitration proceedings initiated by the State Applicant will not be interrupted, unless otherwise agreed by the States Parties to the dispute.
Chapter VI Arbitration Procedure Ad Hoc
Article 9 Top of arbitration stage
1. Where it has not been possible to resolve the dispute by applying the procedures referred to in Chapters IV and V, any State Party to the dispute may notify the Administrative Secretariat of Mercosur its decision to resort to the arbitration procedure established in this Chapter.
Article 10 Composition of the Ad Hoc Arbitration Court
1. The arbitration procedure will be tried before an ad hoc tribunal composed of three (3) arbitrators.
2. The arbitrators shall be appointed as follows:
-
i. Each State party to the dispute shall appoint one (1) head arbitrator from the list provided for in Article 11.1, within fifteen (15) days from the date on which the Mercosur Administrative Secretariat has communicated to the States Parties to the dispute one decision to resort to arbitration.
Simultaneously appoint the same list, one (1) alternate to replace the head referee in case of disability or excuse this at any stage of the arbitration proceedings arbitrator.
-
ii. If any State party to the dispute does not appoint their arbitrator within the time specified in item 2 (i), they will be chosen by lot by the Mercosur Administrative Secretariat for a period of two (2) days from the expiration of that term among the referees that State from the list provided for in Article 11.1.
3. The President arbitrator shall be appointed as follows:
-
i. The States parties to the dispute shall appoint by common agreement the third arbitrator, who shall chair the Ad Hoc Arbitration Court, the list provided for in Article 11.2 (iii) for a period of fifteen (15) days from the date in the Mercosur Administrative Secretariat has notified the States parties to the dispute to the decision of one of them to resort to arbitration.
Simultaneously, the same list designate an alternate to replace the head referee in case of disability or excuse this at any stage of the arbitration proceedings arbitrator. The President and his deputy may not be nationals of the States parties to the dispute.
-
ii. If there is no agreement between States Parties to the dispute shall choose the third arbitrator within the time allowed, the Mercosur Administrative Secretariat at the request of any of them, proceed to designate by lot from the list of Article 11.2 (iii), even excluding the nationals of States parties to the dispute.
-
iii. The appointed arbitrators to act as third parties should respond within a maximum of three (3) days of notification of his appointment, on his acceptance to act in a controversy.
Article 11 Lists of arbitrators
1. Each State Party shall designate twelve (12) arbitrators, who will join a list that will be recorded in the Mercosur Administrative Secretariat. The appointment of the arbitrators, together with detailed curriculum vitae of each of them, shall be notified simultaneously to the other States Parties and the Mercosur Administrative Secretariat.
-
i. Each State Party may request clarification of the persons designated by other States Parties for the list referred to in the previous paragraph, within thirty (30) days from such notification.
-
ii. The Mercosur Administrative Secretariat shall notify the States Parties to the consolidated list of arbitrators of Mercosur and its subsequent amendments.
2. Each State Party shall, in addition, four (4) candidates to join the list of third umpires. At least one of the arbitrators appointed by each State Party to this list will not be a national of any of the States Parties of MERCOSUR.
-
i. The list shall be notified to the other States Parties, through the Chair Pro Tempore, accompanied by the curriculum vitae of each proposed candidate.
-
ii. Each State Party may request clarification of persons proposed by the other States Parties or submit justified objections to nominees, according to criteria established in Article 35, within thirty (30) days of notification of such proposals. Objections must be communicated through the Chair Pro Tempore proponent to the State Party. If, within a period not exceeding thirty (30) days of notification of failure to reach a solution, we consider the objection.
-
iii. The consolidated third-party arbitrators list and subsequent amendments, together with a curriculum vitae of the arbitrators, shall be communicated by the President Pro Tempore of the Administrative Secretariat of Mercosur, the record and notify the State Parties.
Article 12 Representatives and advisors
The States parties to the dispute shall appoint their representatives before the Arbitral Tribunal Ad Hoc and may also appoint counsel for the defense of their rights.
Article 13 Unified representation
If two or more States Parties hold the same position in the dispute, can unify their representation before the tribunal and appoint an arbitrator by mutual agreement within the period specified in Article 10.2 (i).
Article 14 Object of controversy
1. The object of disputes will be determined by the texts of presentation and response presented before the Ad Hoc Arbitration Court and can not be expanded later.
Article 15 Interim measures
1. The Ad Hoc Arbitral Tribunal may, at the request of the interested party, and to the extent that there founded suspicions that maintaining the situation may cause severe and irreparable damage to one of the parties to the dispute damages, dictate the interim measures it deems appropriate to prevent such damage.
Article 16 Arbitral award
The Ad Hoc Arbitration Court issue an award within sixty (60) days, renewable by the Court for a period of thirty (30) days from the communication made by the Mercosur Administrative Secretariat on the parties and the other arbitrators informing the acceptance by the referee President of their appointment.
Chapter VII Procedure Review
Article 17 Feature Review
1. Any party to the dispute may present a motion for review of the decision of the Arbitration Court Ad Hoc Permanent aoTribunal Review, within a period not exceeding fifteen (15) days from the notification.
2. The appeal is limited to issues of law covered in controversy and legal interpretations developed in the report of the Ad Hoc Arbitration Court.
Article 18 Composition of the Permanent Review Tribunal
2. Each State Party Mercosur appoint one (1) arbitrator and his deputy for a period of two (2) years, renewable for a maximum of two consecutive terms.
3. The fifth arbitrator, who shall be appointed for a period of nonrenewable three (3) years, unless otherwise agreed by the States Parties, will be chosen by unanimous vote of the States Parties, the list referred to in this numeral, at least three (3) months before the expiration of the term of the fifth arbitrator year. The arbitrator shall have the nationality of any of the States Parties of MERCOSUR, without prejudice to item 4 of this Article.
There is no unanimity, the appointment will be made by lot who will make the Mercosur Administrative Secretariat among the members of this list, within two (2) days following the expiration of that period days.
The list for the description of the fifth arbitrator will conform with eight (8) members. Each State Party shall propose two (2) members who shall be nationals of Mercosur countries.
4. States Parties shall, by mutual agreement, may establish other criteria for designation of the fifth arbitrator.
5. At least three (3) months before the expiration of the mandate of the arbitrators, States Parties should be manifested regarding your renewal or propose new candidates.
Article 19 Permanent availability
Members of the Permanent Review Tribunal since accepting his appointment, shall be permanently available to act when called upon.
Article 20 Operation of the Court
1. Where the dispute involves two States Parties, the Tribunal shall comprise three (3) arbitrators. Two (2) arbitrators shall be nationals of each State party to the dispute and the third, which holds the Presidency, will be assigned by lottery to be conducted by the Director of the Mercosur Administrative Secretariat, among other referees who are not nationals of the States parties to the dispute. The designation of the President shall be given in the following the filing of the application for review, the date from which the Court will be constituted for all purposes day.
Article 21 Objection to application for review period for the report
1. The other party to the dispute shall be entitled to contest the appeal for review filed, within fifteen (15) days notice to the presentation of such an action.
2. The Permanent Review Court will pronounce itself on the appeal within a maximum of thirty (30) days from the submission of the defense that references the previous or the deadline for their submission numeral, as case. By decision of the Court, the thirty (30) days may be extended by fifteen (15) days.
Article 22 Range Statement
Article 23 Direct access to the Permanent Review Tribunal
1. The parties to the dispute, culminating with the procedure laid down in Articles 4 and 5 below Protocol, may expressly agree to submit directly and in a single instance the Permanent Review Tribunal, in which case it will have the same powers that an Ad Hoc Arbitration Court, applying up, as appropriate, Articles 9, 12, 13, 14, 15 and 16 of this Protocol.
Chapter VIII Arbitral Awards
Article 25 Adoption of reports
The reports of the Ad Hoc Arbitration Court and the Permanent Review Tribunal shall be adopted by majority vote, shall be substantiated and signed by the Chairman and other arbitrators. The referees can not give votes in dissent, and shall preserve the confidentiality of the vote. The resolutions also shall be confidential and will remain so at all times.
Article 26 Requirement of reports
Article 27 Obligation to comply with decisions
The reports should be completed in the manner and to the extent to which they were issued. The adoption of compensatory measures under this Protocol does not absolve the State party of its obligation to enforce the award.
Article 28 Appeal for information
Article 29 Term and type of compliance
1. The reports of the Ad Hoc Tribunal or the Permanent Review Tribunal, as appropriate, should be fulfilled within the respective courts establish. If a time limit is not established, the reports should be completed within the date of its notification thirty (30) days.
Article 30 Disagreements over enforcement of the award
1. If the State received for the report considers that the measures taken do not give cumprimendo the same, may, within thirty (30) days from the adoption thereof, to bring the situation to the attention of the Ad Hoc Arbitration Court or the Permanent Court of Review, as appropriate.
Chapter IX Compensatory Measures
Article 31 Faculty applying compensatory measures
1. If a State party to the dispute fails to comply fully or partially the decision of the Arbitration Court, the other party to the dispute shall have the right, within one (1) year from the expiration next day referred to in Article 29.1 and whether recourse to the procedures of Article 30, to start the implementation of temporary compensatory measures such as the suspension of concessions or other similar obligations, in order to obtain compliance with the decision.
2. The report benefited from the State Party shall endeavor, first, to suspend equivalent concessions or obligations in the same sector or sectors affected. If deemed impractical or ineffective suspension in the same industry, may suspend concessions or obligations in other sectors, and shall indicate the reasons for that decision.
Article 32 Faculty question of compensatory measures
1. If the State Party report benefited by applying compensatory measures considered insufficient for the fulfillment of the same, but the State bound to enforce the award considers that the measures taken are satisfactory, the latter Party shall have a period of fifteen (15) days from of notification under Article 31.3, to bring this situation to the attention of the Ad Hoc Arbitration Court or the Permanent Review Tribunal, as appropriate, which shall have thirty (30) days from its constitution to rule on the matter.
2. If the State bound to enforce the award party considers excessive compensatory measures applied, may request, within fifteen (15) days after the application of these measures, the Ad Hoc Tribunal or the Permanent Review Tribunal, as appropriate, is made in respect , within a period not exceeding (thirty) 30 days, counted from its constitution.
-
i. The Court shall decide whether, on the compensatory measures adopted. Evaluate, as appropriate, the reasons given for applying them in a different sector that affected, and their proportionality in relation to the derived consequences of non compliance with the award.
-
ii. In examining the proportionality, the Court shall take into account, inter alia, the volume and / or value of trade in the affected sector, as well as any other loss or borne factor in determining the level or amount of the compensatory measures.
Chapter X Provisions common to Chapters VI and VII
Article 33 Jurisdiction of the courts
States Parties declare recognize as compulsory ipso facto and without special agreement, the jurisdiction of the Courts Ad Hoc Arbitration in each case be constituted to hear and resolve disputes referred to in this Protocol as well as the jurisdiction of the Court Permanent Review to examine and resolve disputes in accordance with the powers conferred upon it by this Protocol.
Article 34 Applicable law
1. The Ad Hoc Arbitration Courts and the Permanent Review Tribunal shall decide the dispute according to the Asunción Treaty, the Ouro Preto Protocol, the protocols and agreements concluded within the framework of the Treaty of Asunción, the Decisions of the Common Market Council, resolutions of the Group Common Market and the Guidelines of the Committee on Commerce of Mercosur, as well as the principles and provisions of international law applicable to the matter.
Article 35 Qualification of arbitrators
Article 36 Costs
1. The expenses and fees incurred by the activity of the arbitrators shall be borne by the country and assign the costs and fees of the Chairman of the Ad Hoc Arbitration Tribunal shall be borne equally by the States parties to the dispute, unless the Court decides to distribute them in proportion distinct.
2. The expenses and fees incurred by the activity of the referees of the Permanent Review Tribunal shall be borne equally by the States parties to the dispute, unless the Court decides to distribute them in different proportions.
3. Expenditures that relate to the preceding paragraphs may be paid through the Mercosur Administrative Secretariat. Payments may be made through a special fund that could be created by the States Parties to deposit the contributions related to the Mercosur Administrative Secretariat budget, according to Article 45 of the Protocol of Ouro Preto, or when you start the procedures in Chapters VI and VII of this Protocol. The Fund will be administered by the Mercosur Administrative Secretariat, which shall annually be accountable to States Parties on their use.
Article 37 Fees and other costs
The fees, costs of transportation, lodging, per diem and other expenses of the arbitrators shall be determined by the Common Market Group.
Article 38 Headquarters
The headquarters of the Permanent Arbitration Court of Revision will be the city of Asuncion. Nevertheless, for serious reasons, the Court may meet exceptionally in other cities of Mercosur. The Ad Hoc Arbitration Courts may meet in any city of the States Parties of MERCOSUR.
Chapter XI Claims of Private
Article 39 Scope
The procedure defined in this Chapter shall apply to claims made by private parties (individuals or corporations) by reason of the sanction or enforcement by any State Party in legal or administrative measures restrictive, discriminatory or unfair competition effect, in violation of the Treaty of Asunción, the Ouro Preto Protocol, protocols and agreements concluded within the framework of the Treaty of Asunción, the Decisions of the Common Market Council, the Resolutions of the Common Market Group and the Guidelines of the Mercosur Trade Commission.
Article 40 Home of proceedings
Article 41 Procedure
1. Unless the complaint relates to a matter that has led to the initiation of a procedure for Dispute in accordance with Chapters IV to VII of this Protocol, the National Section of the Common Market Group which accepted the complaint under Article 40 of the this Chapter shall hold consultations with the National Section of the Common Market Group of the State Party to which is attributed the violation, to seek, through consultation, an immediate solution to the issue raised. Such consultations will be completed by automatically and without further proceedings if the matter is not resolved within a period of fifteen (15) days from notice of the complaint to the State Party to which is attributed the violation, unless the parties agree to another term.
Article 42 Intervention of the Common Market Group
1. Received the complaint, the Common Market Group will assess the requirements of Article 40.2, which was based on his admission by the National Section, the first meeting subsequent to its receipt. Conclude that they are not meeting the requirements to give you travel, reject the complaint without further proceeding and shall take decisions by consensus.
Article 43 Group of experts
1. The expert group which is referred to in Article 42.2 shall be composed of three (3) members appointed by the Common Market Group or, failing agreement on one or more experts, these will be chosen by a vote the States Parties will among the members of a list of twenty-four (24) specialists. The Mercosur Administrative Secretariat shall communicate to the Common Market Group the name of the expert or experts which received the most votes. In the latter case, and unless the Common Market Group decides otherwise, one (1) of the designated experts may not be a national of the State against which the complaint was made, not the state in which the private party filed a complaint under Article 40.
Article 44 Opinion of the expert group
1. The experts will forward its opinion to the Common Market Group.
-
i. If, in the unanimous opinion, to verify the validity of the complaint made against a State Party, any State Party may require you to take corrective measures or the annulment of the challenged measures. If the demand is not met within fifteen (15) days, the State Party that made may appeal directly to arbitration proceedings under the conditions laid down in Chapter VI of this Protocol.
-
ii. Received an opinion that considers unfounded the complaint unanimously, the Common Market Group shall immediately completed by the same under this Chapter.
-
iii. If the expert group did not reach unanimity to express an opinion, raise their differing conclusions to the Common Market Group to immediately give you a completed claim under this Chapter.
Chapter XII General Provisions
Article 45 Agreement or waiver
At any stage of the proceedings, the party submitting the dispute or complaint may withdraw the same, or if the parties involved can reach an agreement is concluded by giving the controversy or claim, in both cases. Dropouts and arrangements should be communicated through the Mercosur Administrative Secretariat to the Common Market Group, or to the Court that matches, as appropriate.
Article 46 Confidentiality
1. All documents submitted under the procedures laid down in this Protocol are otherwise private to the parties to the dispute, except for arbitration awards.
Article 47 Regulation
The Common Market Council approve the rules of this Protocol within sixty (60) days from its entry into force.
Article 48 Deadlines
1. All time limits laid down in this Protocol are peremptory and be counted by calendar days from the day following the act or fact to which they refer day. Nevertheless, if the maturity of the deadline to submit a text or fulfill an investigation does not occur on a business day at the headquarters of the Mercosur Administrative Secretariat, the text display or performance of due diligence may be made on the first date immediately following such business day.
2. Notwithstanding the provisions of the preceding paragraph, all periods contained in this Protocol may be modified by agreement between the parties to the dispute. The deadlines for procedures tramitados before the Ad Hoc Arbitration Courts and before the Permanent Review Tribunal may be modified when the parties to the dispute request to the respective Court and this grant.
Chapter XIII Transitional Provisions
Article 49 Initial notifications
States Parties shall carry out the first assignments and notifications under Articles 11, 18 and 43.2 for a period of thirty (30) days from the entry into force of this Protocol.
Article 50 Controversies in progress
Controversies in progress initiated in accordance with the scheme of the Brasilia Protocol continue to be governed exclusively by the same until full completion.
Article 51 Rules of procedure
1. The Permanent Review Tribunal shall adopt its own rules of procedure within thirty (30) days from its constitution, which must be approved by the Council of the Common Market.
Chapter XIV Final Provisions
Article 52 Duration and deposit
Article 53 System Review
Before culminating the convergence of the common external tariff, States Parties shall make a review of the current system of dispute resolution, with a view to the adoption of the Permanent System of Dispute Resolution for the Common Market referred numeral 3 of Annex III of the Treaty of Asuncion.
Article 54 Accession or ipso jure denunciation
The accession to the Treaty of Asuncion mean ipso jure accession to this Protocol.
Denunciation of this Protocol shall mean ipso jure denunciation of the Treaty of Asuncion.
Article 55 Derogation
1. This Protocol shall derogate from its entry into force, the Protocol of Brasilia for Dispute Resolution, adopted December 17, 1991 and Regulation of the Brasilia Protocol, approved by CMC Decision 17/98.
Article 56 Languages
The official languages in all proceedings under this Protocol Portuguese and Spanish. Done in the city of Olivos , Buenos Aires Province, Argentina, the eighteenth day of February two thousand and two, one original in Portuguese and Spanish languages, both texts being equally authentic.
THE ARGENTINA
EDUARDO DUHALDE
CARLOS Ruckauf
THE FEDERAL REPUBLIC OF BRAZIL
Fernando Henrique
Cardoso Lafer
THE REPUBLIC OF PARAGUAY
LUIS GONZALEZ MACCHI
JOSÉ ANTONIO
MORENO Ruffinelli
THE REPUBLIC EAST OF URUGUAY
JORGE BATLLE IBAÑEZ
DIDIER Opertti
