III. Findings and Recommendations Requested by the Parties

3.1 The European Communities and their member States requested the Panel, given the particular circumstances of this case, in which the measures at issue had already been examined by this Panel and by the Appellate Body in an earlier dispute (WT/DS50) to which the European Communities and their member States had been a third party, to extend its findings in the earlier dispute, as modified by the Appellate Body, to the European Communities and their member States as the complainant in the present proceeding and, on this basis, to make the following rulings, findings and recommendations:

3.2 India requested the Panel to reject the complaints of the European Communities and their member States on the basis of the following findings:

IV. Arguments Of The Parties

Articles 9.1 and 10.4 of the DSU

4.1 The European Communities and their member States argued that, given the particular circumstances of this case, in which the measures at issue had already been examined by this Panel and by the Appellate Body in an earlier dispute (WT/DS50), to which the European Communities and their member States had been a third party, the Panel should extend its findings in the earlier dispute, as modified by the Appellate Body, to the European Communities and their member States as the complainant in the present proceeding. The following points were advanced in support of this argument:

• Since the DSB had adopted the Panel report and the Appellate Body report in the earlier dispute¹⁰ dealing with the same measures at its meeting of 16 January 1998 no change in factual circumstances had occurred. The domestic legal situation in India had not changed and, in particular, no amendment to the Patents Act of 1970 had been enacted in India in order to provide for an appropriate means to file applications for patents for inventions of pharmaceutical and agricultural chemical products pursuant to Article 70.8 of the TRIPS Agreement; nor had the same Act been amended in order to provide for the possibility to grant exclusive marketing rights pursuant to Article 70.9 of the TRIPS Agreement.

• It was neither necessary nor appropriate to repeat all the legal arguments that had already been put before this Panel when it dealt with the United States' complaint. Article 10.4 of the DSU specifically provided that a third party considering that a measure already the subject of a panel proceeding nullified or impaired benefits accruing to it under a covered agreement was entitled to bring its complaint on that measure before the original panel. This provision was designed to serve continuity, consistency and procedural economy in the WTO dispute settlement system. Therefore, a re-examination of the elements of the complaint in all legal detail would go against the very purpose of Article 10.4 of the DSU.

• The present complaint was in all aspects identical, from a legal point of view, with the earlier complaint submitted by the United States. It would entail a repetitive exercise of formalistic exchanges of views, which would be entirely futile given that the legal situation had already been clarified by the adoption of the earlier Panel and Appellate Body reports. It would also amount to a re-hearing of the case and would thus give the parties to the dispute the opportunity of having the equivalent of a further appeal not foreseen in any provision of the DSU.

• In view of the fact that the Panel and the Appellate Body had already found in the earlier dispute that the present Indian domestic r�gime concerning the patent protection of pharmaceutical and agricultural chemical products was inconsistent with India's obligations under Article 70.8 and 70.9 of the TRIPS Agreement, it followed pursuant to Article 3.8 of the DSU that there was a presumption according to which this breach of the relevant WTO rules by India had an adverse affect on the European Communities and their member States as the other party to this dispute. In these circumstances, the burden was on India to rebut the presumption according to which India�s present domestic r�gime for the patent protection of pharmaceutical and agricultural chemical products nullified or impaired benefits accruing to the European Communities and their member States under Article 70.8 and 70.9 of the TRIPS Agreement.

4.2 India, in response, requested the Panel to dismiss the complaint of the European Communities and their member States as inconsistent with the rules of the DSU on multiple complainants, in particular Articles 9.1 and 10.4. It advanced the following points in support of this view:

Successive complaints based on the same facts and legal claims were unprecedented

• It had been the consistent practice of both the Contracting Parties to GATT 1947 and the Members of the WTO to bring complaints based on the same facts, claims and arguments either jointly before the same panel or at least concurrently for examination by panels composed of the same persons. About one third of the panels established to date by the DSB had examined complaints submitted by two or more WTO Members jointly or concurrently. Seven WTO panels had examined joint or concurrent complaints, altogether representing 22 complaints. If each of these 22 complaints had instead been examined individually, the amount of resources spent by the WTO and its Members on settling these disputes would have tripled.

• The United States and the EC had reacted in the past with hostility to attempts by other Contracting Parties to GATT 1947 or Members of the WTO to re-litigate a matter, even when the subsequent complaint was justified. The United States had thus objected at the March 1991 meeting of the GATT 1947 Council to the establishment of a panel on Denial of Most-favoured-nation Treatment as to Imports of Non-rubber Footwear from Brazil because "this matter had already been adjudicated" by a panel established under the Tokyo Round Subsidies Agreement, even though Brazil had made legal claims in the second proceeding under the GATT that it could not have made under the Subsidies Agreement.¹¹ Equally hostile had been the EC�s reaction to the request for consultations on its r�gime for the importation, sale and distribution of bananas by Panama in October 1997. The EC had described Panama's initiation of the dispute settlement procedures on a matter on which a panel had already ruled as an abuse of the dispute settlement procedures, even though Panama had not been a WTO Member when the original panel had been established and could therefore not have joined the earlier complaint.¹²

An unmitigated right to bring successive complaints by different parties based on the same facts and legal claims would entail serious risks for the multilateral trade order

• In the WTO, the danger of unnecessary re-litigation of the same matter arose mainly from the multilateral nature of the obligations at issue. In principle, each Member had the same obligations towards each of the other Members. The WTO presently had 132 Members. In theory, an allegation of non-compliance against one Member could therefore give rise to 131 different complaints by all the other Members. If multiple complaints were submitted to the same panel few problems arose; if they were brought successively before different panels, the confusion and waste of resources were great.

• The objective of the proceedings under the DSU, just as those of any other system of legal adjudication, was to settle disputes by giving panels and the Appellate Body the authority to determine facts, to find the applicable law and to apply the law to the facts. Legal proceedings were troublesome and costly, not only for the parties to the dispute but to society in general. Henry M. Herman had written in 1886:

For these reasons, all legal systems had developed principles to ensure that the same matter was not unnecessarily re-litigated, among which the principles of res judicata and stare decisis.

• However, since the principle of res judicata did not apply if the parties to the dispute were different and the principle of stare decisis did not apply in the WTO to the interpretations of a panel or the Appellate Body, if successive multiple complaints by different Members on the same matter were to be admitted and examined as separate new cases, it would engender the danger of contradictory decisions and the waste of resources would be tremendous.¹³ If a panel ruled in one case in favour of the defendant, other complainants could bring the same case again and again before different panels with a different composition until a complainant "scored a hit".

Articles 9 and 10 of the DSU required multiple complainants to submit their case to the same panel whenever feasible

• The drafters of the DSU had addressed the problem of multiple complaints on the same matter in Article 9.1 of the DSU, which provided:

The issue was also addressed in Article 10.4, which stated:

These provisions made clear that another Member's complaint, by itself, did not foreclose a new complaint. Both joint and successive complaints by different Members, before the same panel or different panels, were therefore in principle allowed. However, Articles 9 and 10 also attached an important condition to the right to resubmit the same matter to a panel, by stipulating that "a single panel shall be established whenever feasible". The same proviso was contained in Article 10.4, according to which a dispute on a measure already under litigation must be referred to the same panel "wherever possible". Articles 9 and 10 therefore balance two conflicting objectives: on the one hand, each complainant must have the right to bring its own case, make its own claims and develop its own arguments; on the other hand, each defendant and the WTO must be protected against completely unnecessary re-litigation. The compromise the drafters had found was logical and based on common sense: when complaints could be joined, they must be joined; when a third party could submit its complaint about a measure to a panel that examined the same measure, it must do so.

• The obligations under Articles 9.1 and 10.4 were expressed in the passive voice ("A single panel shall be established ..."; "Such a dispute shall be referred to ..."). The Articles therefore did not make clear to whom they were addressed: were the obligations established for the organs and officers of the WTO - in particular, the DSB and the Director-General - or for the Members of the WTO, or for both? This interpretative issue must be resolved in the light of the purpose of these provisions, which was to avoid unnecessary re-litigation. This purpose could not be achieved if the responsibility to ensure the joint or concurrent examination of multiple complaints fell exclusively on the organs and officers of the WTO. The DSB must establish a panel "if the complaining party so requests" whether or not that request was justified, and the DSB could therefore not effectively prevent unnecessary re-litigation. Equally, the Director-General was obliged under Article 8.7 to determine the composition of a panel "at the request of either party" irrespective of the nature of the complaint.

• The Panel had the responsability to determine the admissability of the EC complaints in the light of the provisions of Articles 9.1 and 10.4 of the DSU. In this regard, it should be recalled that the WTO panel on European Communities - Regime for the Importation, Sale and Distribution of Bananas had examined whether the authority to determine whether a request for the establishment of a panel met the requirements of Article 6.2 of the DSU rested with the DSB or with the panel. The panel had ruled that it had the authority:

The reasoning of that panel applied equally to the question of whether a complaint met the requirements of Articles 9.1 and 10.4 of the DSU.

• It might therefore be concluded that Articles 9.1 and 10.4 could achieve their purpose only if the duty to submit multiple complaints to a single panel whenever possible was interpreted as a duty falling on both the WTO and its membership, and panels declared complaints that did not meet the requirements of these provisions as inadmissible. The present Panel was the first to address this issue and therefore had the important task of resolving it in the light of its broad systemic implications.

• It should be noted that India was not arguing against the submission of successive complaints on the same matter by different WTO Members in all cases. Successive complaints might be unavoidable and therefore legitimate for a variety of reasons. There might be legal reasons. For instance, the complainant might wish to make claims that went further than those made in the earlier proceeding. There might be procedural reasons. Thus, the complainant might not have been a WTO Member when the original complaint had been brought, as noted above for Panama in the Bananas case. There might be factual reasons. For instance, the parties to the earlier dispute might have reached a settlement. The interpretation of Articles 9 and 10 suggested above would not curtail the legitimate exercise of the fundamental right of a WTO Member to a new and separate examination of its complaint when the need arose but would prevent only the needless, and therefore abusive, delay in the exercise of this right.

• The EC's exercise of the right to bring a new complaint on the same matter that had already been the subject of an earlier proceeding was abusive. As the EC itself admitted, its complaint was "in all aspects identical, from a legal point of view, with the earlier complaint submitted by the United States". Not a single new fact, claim or argument was presented by the EC. India had obligations under Article 70.8 and Article 70.9 not only with respect to the United States but with respect to all Members of the WTO, including the EC. Moreover, Article 4 of the TRIPS Agreement obliged India to implement its obligations under these provisions on a most-favoured-nation basis. India could therefore have only one "mailbox" system and only one mechanism for the granting of exclusive marketing rights, and these must be equally applicable to all Members of the WTO. Any change that India might make to implement the recommendations of the Panel in the earlier dispute, as modified by the Appellate Body, would therefore necessarily benefit not only the United States but also the European Communities and their member States. The only purpose of the EC's complaint was thus to obtain rights under Article 22.2 of the DSU, which the EC could easily have obtained by submitting its complaint jointly or concurrently with the United States. The EC had presented no reasons of a legal, procedural or factual nature that justified its decision to seek these rights belatedly in a separate proceeding.

• The question before the Panel was essentially the following: do complainants have an unlimited right to delay the initiation of proceedings or do defendants and the WTO have the right to be protected against unnecessary re-litigation? The EC's complaints amounted to unwarranted harassment, entailing a waste of the WTO's limited human and financial resources, as well as those of India. If the EC's approach to re-litigation were sanctioned by this Panel, and if Articles 9 and 10 of the DSU provided no point at which judicial proceedings in the WTO must stop, the WTO could easily become one vast scene of litigation, disturbance and ill will.

• The Appellate Body had stated in another context that "The WTO rules are not so rigid or so inflexible as not to leave room for reasoned judgements in confronting the endless and ever-changing ebb and flow of real facts in real cases in the real world".¹⁸ India invited the Panel to approach the novel and important interpretative issue before it in that spirit.

Continuation: Articles 9.1 and 10.4 of the DSU

⁹ The term "mailbox system" is used in this Panel report as shorthand for the means to be put in place which allow for the filing of patent applications for pharmaceutical and agricultural chemical products as required by Article 70.8.

¹⁰ Documents WT/DS50/R and WT/DS50/AB/R, respectively

¹¹ Document C/M/248, pages 9-16 

¹² Document WT/DS105/1. Panama became a Member of the WTO on 6 September 1997. The panel which examined the Bananas case was established on 8 May 1996 (WT/DS27/7).

¹³ The WTO currently does not levy any fees on complainants that might induce them not to engage in re-litigation. The Member which fails to bring its complaint jointly or concurrently with another Member can therefore now impose the financial consequences of its inaction on the WTO and its membership. 

¹⁴ See, for example, Robert C. Casad, Res Judicata, West Publishing Co., St. Paul, Minn.,1976, page 2. 

¹⁵ BISD 36S/123-124 

¹⁶ Appellate Body report on Japan - Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, Section E

¹⁷ Report of the panel on European Communities - Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/R/ECU, paragraph 7.26

¹⁸ Appellate Body Report on Japan - Taxes on Alcoholic Beverages, (WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R)