The Dispute settlement understanding is the central pillar of the multilateral trading system of the World Trade Organisation framed as a legal text containing the rules for dispute settlement in the WTO. The current dispute settlement system of WTO was created during Uruguay Round. It is embodied in the Understanding on Rules and Procedures Governing the Settlement of Disputes, commonly referred to as the Dispute Settlement Understanding and abbreviated “DSU”. It should be noted that the current dispute settlement system is the result of the evolution of rules, procedures and practices developed over almost half a century under the GATT 1947.
The conflict arises when one member country of WTO takes some action that breaches the WTO agreements then it is consider to be dispute. When a country/ countries enter into WTO membership then the country/ countries has/have agreed the norms of WTO and if they believe fellow members are in violation of trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally.
Duration of a Dispute Settlement procedure
These approximate periods for each stage of a dispute settlement procedure are target figures. The agreement is flexible. In addition, the countries can settle their dispute themselves at any stage.
1. 60 days : Consultations, mediation, etc.
2. 45 days : Panel set up and panellists appointed
3. 6 months : Final panel report to parties
4. 3 weeks : Final panel report to WTO members
5. 60 days : Dispute Settlement Body adopts report (if no appeal)
[Total = 1 year (without appeal)]
1. 60–90 days : Appeals report
2. 30 days : Dispute Settlement Body adopts appeals report
[Total = 1 year 3 months (with appeal)]
Participants in the dispute settlement system
The participants in the dispute settlement system are the Member governments of the WTO), which can take part either as parties or as third parties. The WTO Secretariat, WTO observer countries, other international organizations, and regional or local governments are not entitled to initiate dispute settlement proceedings in the WTO.
The Dispute Settlement Understanding (DSU) sometimes refers to the Member bringing the dispute as the “complaining party” or the “complainant” (this guide mostly uses the term “complainant”).