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TITLE
DISPUTE SETTLEMENT
CHAPTER I
OBJECTIVE AND SCOPE
Article 1
Objective
The objective of this Title is to establish an effective and efficient mechanism to avoid and settle disputes between the Parties regarding Part [X] of the Agreement with a view to arrive at, where possible, a mutually satisfactory resolution of the dispute.
Article 2
Parties
1. For the purposes of this Title, the EU, MERCOSUR or one or more of its signatory Member States, may be parties to a dispute. The parties to the dispute shall be hereinafter referred to as “party” or “parties”.
2. The EU may initiate a dispute settlement proceeding against a measure of MERCOSUR that concerns the EU or one or more of its Member States.
3. The EU may initiate a dispute settlement proceeding against one or more of the signatory Member States of MERCOSUR that concerns the EU or one or more of its Member States whenever the measure at issue is a measure of such individual signatory Member State(s).
4. MERCOSUR may initiate a dispute settlement proceeding against the EU whenever the measure at issue is a measure of the EU[1] that concerns MERCOSUR as a whole or all of its signatory Member States.
5. One or more signatory Member States of MERCOSUR may individually initiate a dispute settlement proceeding against the EU whenever the measure at issue is a measure of the EU[2] that concerns such individual signatory Member State(s).
6. When MERCOSUR has requested the establishment of a panel under Article X of this Title, a signatory MERCOSUR Member State shall not initiate another proceeding on the same matter under this same forum.
Article 3
Scope
The provisions of this Title shall apply with respect to any dispute concerning the interpretation and application of the provision of Part [X] of this Agreement, except where otherwise expressly provided.
CHAPTER II
DISPUTE AVOIDANCE
CONSULTATIONS AND MEDIATION
Article 4
Consultations
1. The Parties shall endeavour to resolve any dispute regarding the alleged non-compliance with the provisions referred to in Article 3 by entering into good faith consultations with the aim of reaching a mutually agreed solution.
2. A Party shall seek consultations through a written request to the other Party, copied to the [Trade Committee], giving the reasons for the request, including the identification of the measure at issue and the relevant provisions referred to in Article 3 that it considers applicable.
3. Consultations shall be held within fifteen (15) days of the request being received, and shall, unless the parties agree otherwise, be held on the territory of the consulted party. The consultations shall be deemed concluded within thirty (30) days from the date of the receipt of the consultation request, unless both parties agree to continue consultations. Consultations, in particular the positions taken by the parties therein, shall be confidential and without prejudice to the rights of any Party in any further proceedings.
4. If consultations are not held within the timeframe laid down in paragraph [3 or 5], as the case may be, or if consultations are concluded and no agreement is reached on a mutually agreed solution, then the party which has requested consultations may proceed directly to request the establishment of an arbitration panel in accordance with Article 6 of this Title.
5. Consultations on matters of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time shall be held within fifteen (15) days of the date of receipt of the request by the consulted Party and shall be deemed concluded within those fifteen (15) days, unless both Parties agree to continue consultations.
6. During consultations, each Party shall provide factual information, so as to allow for the complete examination of the manner in which the measure at issue could affect the operation and application of Part [X] of this Agreement.
Article 5
Mediation
Any Party may request the other Party to enter into a mediation procedure with respect to any measure adversely affecting trade between the Parties pursuant to [Annex X] (Mediation Mechanism) of this Agreement. The mediation procedure may only be initiated by mutual agreement of the Parties.
CHAPTER III
DISPUTE SETTLEMENT PROCEDURES
Article 6
Initiation of arbitration panel proceedings
1. Where the parties have failed to resolve the dispute by recourse to consultations as detailed in Article 4, or if the complaining party considers that the defending party has failed to comply with a solution mutually agreed during consultations , the complaining party may seek the establishment of an arbitration panel upon written request to the defending party and simultaneously to the [Trade Committee].
2. The complaining party shall give the reasons for the request, identifying the measure it considers to be in breach of this Part which has been the subject of consultations[3], and indicating the provisions referred to in Article 3 that it considers applicable, in a manner that the legal basis of the complaint is presented clearly.
Article 7
Appointment of arbitrators
1. Arbitrators shall have specialised knowledge or experience in law and international trade. Additionally, non-national arbitrators shall be jurists.
2. Arbitrators shall be independent, serve in their individual capacities and not take instructions from any organisation or government or be affiliated to a government, including governmental organisation, of a Party to the Agreement, and shall comply with the Code of Conduct set out in [Annex No. X].
3. The [Trade Committee] shall, no later than six months after the entry into force of this Agreement, establish a list of thirty-two (32) individuals who are willing and able to serve as arbitrators. This list shall be composed of three sub-lists: one composed by twelve (12) individuals proposed by the EU, another composed by twelve (12) individuals proposed by MERCOSUR and a third one composed by eight (8) individuals agreed by both Parties that are not nationals of either Party and who shall act as chairperson to the arbitration panel. The [Trade Committee] will ensure that the list contains this number of individuals. The [Trade Committee] may amend the list of arbitrators, in accordance with [Rule X (between 27 and 28)] of the Rules of Procedure.
4. In the event that, at the moment of the composition of a particular arbitration panel in accordance with Article [8], the list provided for in paragraph [4] is not established or, once established, not all individuals included in a particular sub-list could serve as arbitrator in a dispute, the co-Chair of the [Trade Committee] of the complaining Party shall draw by lot the arbitrators in accordance with [Rule 13a bis] of the Rules of Procedure established in Annex [XX].
Article 8
Composition of arbitration panel
[1.] An arbitration panel shall be composed of three arbitrators
1. Within ten (10) days from the request for a panel being submitted to the defending party and simultaneously to the [Trade Committee] the parties shall consult in order to agree on the composition of the arbitration panel. Expertise relevant to the subject matter of the dispute may be taken into consideration by the parties for the selection of arbitrators according to this paragraph. The arbitration panel shall always be composed of at least a non-national of either Party, who will act as the chairperson.
2. If there is no agreement on the composition within this timeframe, each party shall appoint one member of the panel from the sub-list of that party established in [paragraph 4 of Article 7] within ten (10) days from the expiry of the timeframe established in paragraph 1 of this Article. If a party fails to appoint an arbitrator within such period, and upon request of either party to the dispute, the Chairperson of the [Trade Committee] or the Chairperson's designee shall, within five days from the date of that request, select the arbitrator by lot from the sub-list of that party established in [paragraph 4 of Article 7].
3. During the timeframe established in paragraph [1], the parties shall endeavour to agree on the chairperson of the panel. If they are unable to agree, either party shall ask the chairperson of the [Trade Committee] to select the chairperson of the panel by lot from the sub-list established in [paragraph 4 of Article 7] within five days from that request.
4. The parties shall notify the Chairperson of the [Trade Committee] of the arbitrators appointed by them under this Article that have accepted their appointment in accordance with paragraph[ 6] of this Article.
5. Notwithstanding the preceding provisions, the parties may, by mutual agreement, select as arbitrators persons who are not included in the list of arbitrators, as well as establish different criteria and/or procedures for the appointment of the members of the arbitration panel, provided that the latter comply the provisions of [paragraph 3 of Article 7].
6. The date of the establishment of the arbitration panel shall be the date on which all three arbitrators are selected and have accepted the appointment according to the Rules of Procedure established in Annex [XX].
7. Where a party considers that an arbitrator does not comply with the requirements of the Code of Conduct, the procedures provided for in the Rules of Procedure shall apply.
8. If an arbitrator is unable to participate in the proceeding, withdraws or needs to be replaced, a replacement shall be selected within ten (10) days in accordance with the selection procedures set out in this Article. The panel proceedings will be suspended for the period this procedure is undertaken up to a maximum of 25 days.
9. The parties shall accept as binding, ipso facto and with no need for a special agreement, the authority of any arbitration panel established in accordance with this Title.
Article 9
Hearings
The hearings of the arbitration panel shall be open to the public, unless the parties to the dispute decide otherwise. The hearings of the arbitration panel shall be partially or completely closed to the public when the submission and arguments of a party contains information which that party has designated as confidential.
Article 10
Information and technical advice
1. The arbitration panel may request the opinion of experts or obtain information from any source deemed relevant in accordance with the Rules of Procedures.
2. The opinions of experts as well as information obtained from any relevant source shall be non-binding.
3. Experts shall be persons of professional standing and experience in the relevant field. The arbitration panel shall consult the parties before choosing such experts.
4. The arbitration panel shall set a reasonable time limit for the submission of information or the report of the experts.
5. Persons of the Parties shall be authorised to submit amicus curiae briefs to the arbitration panels under conditions to be defined in the Rules of Procedures. These conditions shall ensure that the amicus curiae briefs do not create undue burden to the parties to the dispute nor unduly delay or complicate the panel proceedings.
6. Any information obtained under this Article shall be disclosed to each of the parties and submitted for their comments.
Article 11
Applicable Law
1. The arbitration panel shall resolve the dispute according to the provisions referred to in [Article 3].
2. The arbitration panel shall interpret the provisions referred to Article 3 in accordance with the customary rules of interpretation of public international law. When interpreting an obligation under this Agreement which is identical to an obligation under the WTO Agreement, the arbitration panel shall take into consideration any relevant interpretation established in the rulings of the WTO Dispute Settlement Body (hereinafter referred to as "DSB").
Article 12
Arbitral award
1. The arbitration panel shall deliver an interim arbitral report to the Parties not later than ninety (90) days of the date of establishment of the arbitration panel. The interim report shall set out the findings of fact, the applicability of relevant provisions and the basic rationale behind any findings and recommendations that the panel makes.
2. When the panel considers that the 90-day deadline cannot be met, the chairperson of the arbitration panel shall notify the Parties and the [Trade Committee] in writing, stating the reasons for the delay and the date on which the panel plans to deliver its interim arbitral report. Under no circumstances should the interim arbitral report be delivered later than one hundred twenty (120) days after the date of establishment of the arbitration panel.
In cases of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time, the arbitration panel shall make every effort to deliver its interim arbitral report within forty-five (45) days and, in any case, no later than sixty (60) days after the date of establishment of the arbitration panel.
3. Any party may deliver a written request to the arbitration panel to review precise aspects of the interim arbitral report within fourteen (14) days of its receipt or, in cases of urgency, including those involving perishable goods or seasonal goods or services, within seven (7) days of its receipt. After considering any written comments by the Parties on the interim arbitral report, the arbitration panel may modify its arbitral report and make any further examination it considers appropriate.
4. The arbitration panel shall issue its final report constituting the arbitral award to the parties and the [Trade Committee] within one hundred twenty (120) days following the establishment of the panel. Where it considers that this deadline cannot be met, the chairperson of the panel shall notify the [Trade Committee] and the parties in writing, stating the reasons for the delay. Under no circumstances should the arbitral award be issued later than one hundred fifty (150) days following the establishment of the panel.
[X] In cases of urgency, including those regarding perishable goods or other goods or services that rapidly lose their quality, current condition or commercial value in a short period of time, the arbitration panel shall make every effort to transmit its arbitral award within sixty (60) days from the date of its establishment. Under no circumstances should it take longer than seventy-five (75) days from such date. If a party so requests, the arbitration panel shall give a preliminary ruling within ten (10) days of its establishment on whether it deems the case to be urgent.
5. The arbitral award shall set out the findings of fact, the applicable law and the basic rationale behind the findings and conclusions. The arbitral award shall include a sufficient discussion of the arguments made at the interim review stage, and shall answer clearly to the questions and observations of both parties.
[X] The arbitration panel shall make an objective assessment of the matter before it including an objective assessment of the facts of the case and of the arguments and evidence presented by both parties and the applicability of and conformity with the provisions referred to in [Article 3].
6. The arbitration panel shall make every effort to take any decision by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote. The arbitrators shall not issue dissenting or separate opinions and must maintain confidentiality as regards the voting.
7. The [Trade Committee] shall make the arbitral award of the arbitration panel publicly available in its entirety, unless the parties decide, by mutual agreement, not to make public parts thereof which contain confidential information.
8. The arbitral award is binding on the parties from the date it is issued and is not subject to appeal.
9. The arbitral award cannot add to or diminish the rights and obligations provided in the provisions referred to in [Article 3]. The arbitral award shall not be construed as conferring rights or imposing obligations for natural or legal persons, other than those provided under MERCOSUR countries' domestic law.
10. [Paragraphs 2, 3, 4, 5 and 6] shall be applicable to the rulings of the arbitration panel referred to in [Articles 16, 17, 18 and 19].
Article 13
Withdrawal, Settlement or Suspension of a Dispute
1. The complaining party may, with the consent of the defending party, withdraw its complaint before the award has been issued.
2. In the event that the parties reach a settlement at any time either before or following the issuance of the arbitral award, the [Trade Committee] will be so notified in writing by both parties.
3. The arbitration panel shall, at the request of both parties, suspend its work at any time, before the award has been issued, for a period agreed by the Parties and not exceeding twelve (12) consecutive months. Within this period, the arbitration panel shall resume its work only at the written request of both parties. The request shall be notified to the chairperson of the [Trade Committee]. The procedures shall be resumed from the stage they have been suspended twenty (20) days after the date of receipt of the request. If the work of the panel has been suspended for more than twelve (12) months, the authority for establishment of the panel shall lapse, without prejudice to the right of the complaining party to request at a later point in time the establishment of a panel on the same subject matter.
Article XX
Mutually Agreed Solution
1. The Parties may reach a mutually agreed solution at any time with respect to any dispute settlement procedure.
2. If a mutually agreed solution is reached during the panel procedure, the parties shall jointly notify that solution to the chairperson of the panel. Upon such notification, the panel procedure shall be terminated.
3. Each party shall take measures necessary to implement the mutually agreed solution mentioned in the present Article with respect to disputes referred within the agreed time period.
4. No later than at the expiry of the agreed time period the implementing party shall inform the other party, in writing, of any measure that it has taken to implement the mutually agreed solution.
Article 14
Request for Clarification
Within ten (10) days following the notification of the arbitral award, either party may request in writing to the arbitration panel, with copy to the other party and the [Trade Committee], to clarify certain specific aspects of any determination or recommendation in the arbitral award that the requesting party considers ambiguous. The other party to the dispute may submit comments on such request to the arbitration panel within five days following its receipt. The arbitration panel shall answer a request for clarification of the arbitral award within fifteen (15) days following its receipt. Requests for clarification shall not be used as a means to review the arbitral award.
Article 15
Compliance with the Arbitral Award
1. The defending party shall take any measure necessary to comply promptly and in good faith with the arbitral award.
2. If it is impracticable to comply immediately with the arbitral award, the defending party shall have a reasonable period of time in which to do so.
Article 16
Reasonable period time for compliance
1. In cases under [paragraph 2 of Article 15], the defending party shall, notify the complaining party and the [Trade Committee] of the time it will require for compliance, no later than thirty (30) days after the issuance of the arbitral award.
2. If there is disagreement between the parties on the reasonable period of time to comply with the arbitral award, the complaining party shall, within twenty (20) days of the notification made under [paragraph 1] by the defending party, request in writing the original arbitration panel to determine the length of the reasonable period of time. Such request shall be notified to the other party and to the [Trade Committee]. The arbitration panel shall issue its ruling to the parties and to the [Trade Committee] within twenty (20) days of the date of the submission of the request.
3. The defending party shall inform the complaining party in writing of its progress to comply with the arbitral award at least one month before the expiry of the reasonable period of time.
4. The reasonable period of time may be extended by mutual agreement of the parties.
Article 17
Review of any measure taken to comply with the arbitral award
1. Before the expiry of the period for implementation as determined according to [Article 16], the defending party will notify the other party and the [Trade Committee] of the action it has taken to comply.
2. Where there is disagreement between the parties as to the existence or the conformity of the measure notified by the defending party under [paragraph 1] with the arbitral award and/or with the provisions referred to in [Article 3], the complaining party shall refer the matter to the original arbitration panel. Such request shall identify the specific measure at issue and explain how such measure does not comply with the arbitral award and/or is inconsistent with the provisions referred to in [Article 3] in a manner to present the legal basis for the complaint clearly. The panel shall issue its ruling forty-five (45) days after the date of referral of the matter to it.
Article 18
Temporary remedies in case of non-compliance
1. If the defending party has not notified the action it has taken to comply within the period determined according to [Article 16], or if the panel makes a ruling under [Article 17 paragraph 2] to the effect that no measure taken to comply exists or that the measure notified under [Article 17] paragraph 1 is inconsistent with the arbitral award and/or with the defending party's obligations under the provisions referred to in [Article 3], the defending party shall, if so requested by the complaining party, present an offer for temporary compensation.
2. If the complaining Party decides not to request an offer for temporary compensation under paragraph 1, or if such request is made and no agreement on compensation is reached within thirty (30) days after the end of the period determined according to [Article 16] or after the issuance of the arbitral award pursuant to [Article 17 paragraph 2] that no measure taken to comply exists or that the measure notified under [Article 17 paragraph 1] is inconsistent with the arbitral award and/or with the provisions referred to in [Article 3], the complaining party may, upon notification to the defending party and the [Trade Committee], suspend concessions or other obligations arising from the provisions referred to in [Article 3] equivalent to the nullification or impairment of benefits accruing to the Party under this Agreement suffered as a result of the violation. The complaining party shall notify the other Party the concessions or other obligations it intends to suspend thirty (30) days before the date on which the suspension is due to enter into force.
3. The suspension of concessions or other obligations shall be at a level equivalent to the nullification or impairment that is caused by the failure of the Party complained against to comply with the final award. In considering the concessions or other obligations to suspend, a complaining party should first seek to suspend concessions or other obligations within the same sector or sectors as the measure found to be in violation with the covered legal instruments. The suspension of concessions may be applied to other sectors covered by the scope of this Title pursuant to [Article 3 (Scope)] than the sector or sectors in which the panel has found nullification or impairment, in particular if the complaining Party is of the view that such suspension is effective in inducing compliance.
4. If the defending party considers that the suspension of concessions or other obligations does comply with [paragraph 3], it may request the arbitration panel to rule on the matter. Such request shall be notified to the complaining party and to the [Trade Committee] within thirty (30) days as from the date of the receipt of the notification referred to in [paragraph 2]. Within ten (10) days from the date of the request for the arbitration panel, the complaining party shall present a document indicating the methodology it has used to calculate the level of the suspension of concessions or other obligations. The arbitration panel will issue its ruling within thirty (30) days from the request. During this period the complaining party shall not suspend any concessions or other obligations.
5. The suspension of concessions or other obligations against the Party complained against shall be a temporary measure, and is not intended to replace the agreed objective of full compliance with the arbitral award. Concessions or other obligations shall only be suspended until:
(a) the measure that the arbitration panel under [paragraph 2 of Article 17] has found to violate the provisions referred to in [Article 3] has been withdrawn or amended so as to bring it into conformity with those provisions;
(b) the parties have agreed that the measure notified under [paragraph 1 of Article 17] brings the complaining party into conformity with the provisions referred to in Article 3; or
(c) the parties have reached agreement on the resolution of the dispute pursuant to [Article XX (mutually agreed solutions)].
Article 19
Review of any measure taken to comply after the adoption of temporary remedies for non-compliance
1. The defending party shall notify the complaining party and the [Trade Committee] of any measure it has taken to comply with the arbitration award following the suspension of concessions or other obligations or following the application of temporary compensation, as the case may be. With the exception of cases under [paragraph 2], the complaining party shall terminate the suspension of concessions or other obligations within thirty (30) days from the receipt of the notification. In cases where compensation has been applied, and with the exception of cases under [paragraph 2], the defending party may terminate the application of such compensation within thirty (30) days from its notification that it has complied with the arbitration award.
2. If the parties disagree on whether the notified measure brings the defending party into conformity with the arbitral award and/or the provisions referred to in Article any of the parties may, within thirty (30) days from the receipt of the notification of the measure(s), request in writing the arbitration panel to rule on the matte, failing which the suspension of concessions or the compensation, as the case may be, shall be terminated. Such request shall be notified to the other party and to the [Trade Committee]. The arbitration panel shall notify its ruling to the parties and to the [Trade Committee] within forty-five (45) days from the request. If the arbitration panel rules that any measure(s) taken to comply is in conformity with the arbitral award and with the provisions referred to in [Article 3], the suspension of concessions or other obligations or compensation, as the case may be, shall be terminated. Where relevant, the complaining party shall adapt the level of suspension of concessions or other obligations to the level determined by the arbitration panel.
Article 20
Rules of Procedure
1. Disputes under this Title shall be conducted in accordance with the Rules of Procedures established in [Annex XX] and by Code of Conduct established in [Annex XX] to this Agreement.
2. The [Trade Committee] may amend the Rules of Procedures and the Code of Conduct when it deems necessary.
CHAPTER IV
GENERAL PROVISIONS
Article 21
Choice of Forum
1. The disputes related to the same matter arising under the scope of [Article 3] and under the WTO agreement or under any other agreement to which the relevant Parties are party, may be settled under this Title or under the WTO Dispute Settlement Understanding or the dispute settlement of that other agreement at the discretion of the complaining Party.
For the purposes of this Article:
- dispute settlement procedures under the WTO Agreement are deemed to be initiated by a party’s request for the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO (DSU);
- dispute settlement procedures under any other agreement are deemed to be initiated by a Party’s request for the establishment of a dispute settlement panel or tribunal in accordance with the provisions of that agreement; and
- dispute settlement procedures under this Title are deemed to be initiated by a party’s request for the establishment of an arbitration panel under Article 6.
2. Nevertheless, when a Party has requested the establishment of a panel under Article 6 of the WTO Dispute Settlement Understanding or under the relevant provisions of another agreement to which the relevant Parties are party, or an arbitration panel pursuant to Article [X] (Establishment of the Arbitration Panel), that Party may not initiate another proceeding on the same matter in the other forum, except when the competent body in the forum chosen has not taken a decision on the substance of the matter due to jurisdictional or procedural reasons other than termination of the proceedings following a request for withdrawal or suspension of the proceedings.
3. The Parties understand that two or more disputes concern the same matter when they involve the same parties to the dispute, refer to the same measure and deal with the alleged violation of the same substantive obligation.
4. Without prejudice to [paragraph 2], nothing in this Agreement shall preclude a Party from suspending obligations authorized by the Dispute Settlement Body of the WTO or authorized under the dispute settlement procedure of another international agreement to which the disputing parties are party. The WTO Agreement or the other international agreement between the parties shall not be invoked to preclude a Party from suspending obligations under this Title.
Article 22
Time Periods
1. All time periods established under this Title shall be counted in calendar days from the day following the act or fact to which they refer.
2. The arbitration panel or the mediator may at any time propose to the Parties to modify any time period referred to in this Title, stating the reasons for the proposal.
3. Any time period mentioned in this Title may be extended by mutual agreement of the parties.
Article 23
Confidentiality
The deliberations of the panel shall be confidential. The panel and the Parties shall treat as confidential any information submitted by a party to the panel which that party has designated as confidential. Where that Party submits a confidential version of its written submissions to the panel, it shall also, upon request of the other party, provide a non-confidential summary of the information contained in its submissions that could be disclosed to the public.
Article 24
Costs
1. Each Party shall bear its own expenses derived from the participation in the panel or mediation procedure.
2. The Parties shall share jointly and equally the expenses derived from organisational matters, including the remuneration and expenses of the arbitrators and of the mediator in accordance with Annex [X] (Rules of Procedure).
[1] For greater certainty, a measure(s) of the EU would also cover measure(s) of one or more of its Member States.
[2] For greater certainty, a measure(s) of the EU would also cover measure(s) of one or more of its Member States.
[3] In cases where recourse to arbitration is made following a failure to comply with a mutually agreed solution reached during consultations, the request for arbitration shall refer to the subject matter on which consultations were requested.
ANNEX I
RULES OF PROCEDURE FOR ARBITRATION
General Provisions
1. In Title [XX] of this Agreement and under these rules:
“adviser” means a person retained by a party to a dispute to advise or assist that party in connection with the arbitration panel proceeding;
“arbitrator” means a member of an arbitration panel established under Article 8 of Title [XX] of this Agreement;
“assistant” means a person who, under the terms of appointment of an arbitrator, conducts research or provides assistance to that arbitrator;
“complaining party” means any [P]arty that requests the establishment of an arbitration panel under Article [6 ]of Title [XX] of this Agreement;
“defending party” means the [P]arty against whom a dispute is brought under Article [6 ] of Title [XX] of this Agreement;[
“arbitration panel” means a panel established under Article [8 ] of Title [XX] of the Agreement;
“representative of a party” means an employee or any person appointed by a government department or agency or any other public entity of a party who represents the party for the purposes of a dispute under this Agreement;
Costs
The remuneration paid to the arbitrators shall include all remuneration and expenses due to their assistant(s). The [Trade Committee] shall agree on rules regarding the remuneration and expenses of arbitrators at its first meeting. To the extent that the [Trade Committee] has not established such rules, the remuneration and expenses of arbitrators shall be determined in accordance with WTO practice.
Notifications
5[1]. The parties to a dispute and the arbitration panel shall deliver any request, notice, written submission or other document by e-mail or other electronic means that provides a record of the sending thereof. Unless proven otherwise, the notification shall be deemed to be delivered on the date of its sending. A copy of the documents shall also be provided by post or other means agreed by the parties, including a notification of the date of its sending.
6. Any request, notice, written submission or other document of:
a) the panel, shall be sent to both parties at the same time,
b) a party, which is addressed to the panel, shall be copied to the other party at the same time,
c) a party, which is addressed to the other party, shall be copied to the panel at the same time, as appropriate;
d) a co-chair of the Trade Committee which is addressed to the arbitrators pursuant to rules 13 and 14 shall be copied to the other co-chair and to the parties to the dispute.
7. All notifications shall be addressed to the Pro Tempore Presidency or to the National Coordinators of the Common Market Group in the case of MERCOSUR or its Member States, as the case may be, and to the Directorate-General for Trade of the Commission of the European Union, respectively. If the parties have already appointed their representatives to the dispute, all notifications shall be also addressed to them.
8. Minor errors of a clerical nature in any request, notice, written submission or other document related to the arbitration panel proceeding may be corrected by delivery of a new document clearly indicating the changes.
9. The documents submitted by the parties shall be signed by their duly authorized representatives in order to be considered officially submitted to the Arbitration Panel.
10. If the last day for delivery of a document falls on an official legal holiday of the party responsible for such delivery, such party may deliver the document in the next business day. The parties shall notify the Arbitration Panel their respective calendars of official legal holidays at the meeting of the Arbitration Panel with the parties, provided for in rule 13 (d).
11. The Chairperson of the arbitration panel shall be responsible for the internal and external communications of the panel, including notifications between the parties and the panel.
12. The Chairperson of the arbitration panel shall be responsible for keeping the file of the proceedings.
The Chairperson shall provide to any of the parties, upon its request, a copy of the file of the proceedings after the issuing of the arbitral award or ruling. The Chairperson shall keep the original file during five years after the date of issuing of the award or ruling. At the end of this period, the Chairperson shall transmit the original file to the complaining party. The complaining party shall provide a copy of the file to the defending party on its request.
Commencing the Arbitration
13. (a) If pursuant to [Article 8 of Title VIII] of this Agreement or to [rules 30, 31 or 64] of these Rules of Procedure, any member of the arbitration panel is selected by lot, representatives of both parties shall be invited with due anticipation to be present when lots are drawn. In any case, the lot shall be carried out with any disputing party present at the time. The co-chair of the Trade Committee of the complaining party shall promptly inform the co-chair of the party complained against of the date, time and venue of the lot.
(a bis) The co-chair of the Trade Committee of the complaining Party shall select by lot the arbitrator within 5 days from the request referred to in Article X (Establishment of a Panel), if any of the sub-lists referred in paragraph X of Article X (List of Arbitrators):
i) is not established, amongst those individuals who have been formally proposed by one or both Parties for the establishment of that particular sub-list; or
ii) once established, not all individuals included in a particular sub-list could serve as arbitrator in a dispute, amongst those individuals that integrate that particular sub-list.
(b) The co-Chair of the [Trade Committee] of the complaining party shall notify arbitrators regarding their appointment.
(c) An arbitrator who has been appointed according to the procedure established in Article [8] of Title [XX] shall confirm in writing his/her availability to serve as member of the arbitration panel to the co-Chairs of the [Trade Committee]within five days of the date in which s/he was informed of his/her appointment. In this notification, the arbitrator shall also explicitly confirm that s/he complies and commits to comply with the provisions of the Code of Conduct.
(d) Unless the parties to the dispute agree otherwise, they shall meet the arbitration panel within seven days of its establishment in order to determine such matters that the parties or the arbitration panel deem appropriate. Members of the arbitration panel and representatives of the parties to the dispute may take part in this meeting via telephone or video conference. Before this meeting, the parties shall notify their appointed representatives to the arbitration panel, as well as the address, telephone numbers and e-mail addresses to which communications arising in the course of the proceeding shall be sent.
14. (a) Unless the parties agree otherwise within five days from the date of the selection of the arbitrators, the terms of reference of the arbitration panel shall be:
“to examine, in the light of the relevant provisions of the Agreement cited by the parties, the matter referred to in the request for establishment of the arbitration panel, to rule on the compatibility of the measure in question with the provisions referred to in Article [3] of Title [XX] of this Agreement and to issue an award in accordance with Article [12] of Title [XX] of this Agreement.”
(b) The Parties must notify the agreed terms of reference to the arbitration panel within three days of their agreement.
Initial Submissions
15. The complaining party shall deliver its initial written submission no later than thirty (30) days after the date of establishment of the arbitration panel. The defending party shall deliver its written counter-submission no later than thirty (30) days after the date of receipt of the initial written submission.
16. The initial submission shall state clearly the party’s claim, including the identification of the measures at issue and the legal basis for the complaint and shall also include a summary of the relevant facts and circumstances.
17. The counter-submission shall state the facts and arguments of the defending party upon which its defense is based.
Evidence
18. The initial submission and the counter-submission shall include any available supporting evidence, including any expert or technical opinion. The parties shall otherwise submit all factual evidence to the arbitration panel as early as possible and not later than 5 days prior to the date of the first hearing, except with respect to evidence necessary for purposes of rebuttals, answers to questions, or comments to answers provided by the other party. Upon good cause being shown, the arbitration panel may grant exceptions to this rule. In such cases, the other party shall be accorded the opportunity to comment on the newly submitted evidence.
19. In all cases, each party shall be accorded the opportunity to comment on the evidence submitted by the other party.
20. All the evidence submitted by the parties shall be kept in the files of the proceedings.
21. The arbitration panel may hear witnesses and/or experts only in the presence of both parties.
Working of Arbitration Panels
22. The chairperson of the arbitration panel shall preside at all its meetings. An arbitration panel may delegate to the chairperson authority to make administrative and procedural decisions. These decisions shall be notified to the other arbitrators and, where appropriate, to the parties.
23. The arbitration panel may conduct its activities by any means, including telephone, facsimile transmissions or computer links or video-conference.
24. Only arbitrators may take part in the deliberations of the arbitration panel, but the arbitration panel may permit its assistants to be present at its deliberations.
25. The drafting of any ruling shall remain the exclusive responsibility of the arbitration panel and must not be delegated.
26. Where a procedural question arises that is not covered by the provisions of Title [XX] of Part [X] of this Agreement and these Rules of Procedure, the arbitration panel, after consulting the parties, may adopt an appropriate procedure that is compatible with those provisions.
27. When the arbitration panel considers that there is a need to modify any time limit applicable in the proceedings or to make any other procedural or administrative adjustment, it shall inform the parties to the dispute in writing of the reasons for the change or adjustment and of the period of time or adjustment needed. The arbitration panel may adopt such change or adjustment after consulting the parties. The time limits of Article [12] of Title [XX] of this Agreement shall not be modified.
Amendment of the list
X. The list of arbitrators may be amended at any time by initiative of any Party. Any Party can present new candidates by notifying the other Party of the proposed names. The Parties shall discuss the proposal within one month of the delivery (receipt) of the notification of the proposed names. The Trade Committee shall take the decision to amend the list within six months of such notification.
Replacement of arbitrators
28. If an arbitrator is unable to participate in the proceeding, withdraws, or must be replaced, a replacement shall be selected in accordance with Article [8] of Title [XX] of this Agreement and Rule [13] of these Rules of Procedure.
29. Where a party to the dispute considers that an arbitrator does not comply with the requirements of the Code of Conduct and for this reason should be replaced, this party should notify the other party to the dispute within fifteen (15) days from the time at which it obtained evidence of the circumstances underlying the arbitrator's material violation of the Code of Conduct.
30. Where a party to the dispute considers that an arbitrator other than the chairperson does not comply with the requirements of the Code of Conduct, the parties to the dispute shall consult and, if they so agree, replace the arbitrator and select a replacement following the procedure set out in Article [8] of Title [XX] of Part [X] of this Agreement and Rule [13] of these Rules of Procedure. If the parties to the dispute fail to agree on the need to replace an arbitrator within five days from the date of the notification referred to in Rule [19], any party to the dispute may request that such matter be referred to the chairperson of the arbitration panel, whose decision shall be final.
In case an arbitrator other than the chairperson has to be replaced, and if the party concerned fails to select the replacement of an arbitrator, the chairperson shall select a new arbitrator by lot among the pool of individuals referred to under Article [7] paragraph [4] of Title [XX] of which the original arbitrator was a member. The selection of the new arbitrator shall be done within five days of the date of the submission of the request to the chairperson of the arbitration panel.
31. Where a party considers that the chairperson of the arbitration panel does not comply with the requirements of the Code of Conduct, the parties shall consult and, if they so agree, replace the chairperson and select a replacement following the procedure set out in Article [8] of Title [XX] of this Agreement and Rule [13] of these Rules of Procedure.
If the parties fail to agree on the need to replace the chairperson within five days from the date of the notification referred to in rule 29, a new chairperson shall, unless the parties agree otherwise, be selected by lot by the co-Chairperson of the [Trade Committee] or the Chair´s delegate from the relevant part of the list referred to under Article [7], paragraph [4] of Title [XX]. The selection of the new chairperson shall be done within five days of the date of the request to the Chairperson(s) of the [Trade Committee] to that effect.
32. The arbitration panel proceedings shall be suspended for the period taken to carry out the procedures provided for in Rules[ 28, 29, 30 and 31].
Hearings
33. The defending party shall be in charge of the logistical administration of dispute settlement hearings, unless otherwise agreed. The chairperson of the arbitration panel shall fix the date and time of the hearing in consultation with the parties to the dispute and the other members of the arbitration panel, and shall confirm this in writing to the parties to the dispute. This information shall also be made publicly available by the party in charge of the logistical administration of the hearing unless the hearing is closed to the public. Unless a party disagrees, the arbitration panel may decide not to convene a hearing.
34. Unless the parties agree otherwise, the hearing shall be held:
(a) if the defending party is the EU, in Brussels;
(b) if the defending party is MERCOSUR, in Asunción; and
(c) if the defending party is one or more Member States of MERCOSUR, in the place indicated by such Member State/s.
35. The arbitration panel may convene additional hearings if the parties to the dispute so agree.
36. All arbitrators shall be present during the entirety of any hearings.
37. The following persons may attend the hearing, irrespective of whether the proceedings are open to the public or not:
(a) representatives of the parties to the dispute;
(b) advisers to the parties to the dispute;
(c) administrative staff, interpreters, translators; and
(d) arbitrators’ assistants.
Only the representatives and advisers of the parties to the dispute may address the arbitration panel.
38. No later than five days before the date of a hearing, each party to the dispute shall deliver to the arbitration panel a list of the names of persons who will make oral arguments or presentations at the hearing on behalf of that party and of other representatives or advisers who will be attending the hearing. Upon good cause being shown, the parties may modify their lists after that time limit.
39. The hearings of the arbitration panel shall be open to the public, unless the parties to the dispute decide otherwise. The hearings of the arbitration panel shall be partially or completely closed to the public when the submission and arguments of a party contains information which that party has designated as confidential.
40. The arbitration panel shall conduct the hearing in the following manner, ensuring that the complaining party and the defending party are afforded equal time:
Argument
(a) argument of the complaining party
(b) argument of the defending party
Rebuttal Argument
(a) argument of the complaining party
(b) argument of the defending party
41. The arbitration panel may direct questions to either party to the dispute at any time during the hearing.
42. The arbitration panel shall arrange for a transcript or audio recording of each hearing to be prepared and delivered as soon as possible to the parties to the dispute. The parties to the dispute may comment on the accuracy of the transcript and the arbitration panel may consider those comments.
43. Each party to the dispute may deliver to the arbitration panel, with a copy to the other party, a supplementary written submission concerning any matter that arose during the hearing within ten (10) days of the date of the hearing.
Questions in writing
44. The arbitration panel may at any time during the proceedings address questions in writing to one or both parties to the dispute and set a reasonable time limit for the submission of their responses. Each of the parties to the dispute shall receive a copy of any questions put by the arbitration panel.
45. A party to the dispute shall also provide a copy of its written response to the arbitration panel’s questions to the other party. Each party to the dispute shall be given the opportunity to provide written comments on the other party’s reply within seven (7) days of the date of receipt of such reply.
Confidentiality
46. The parties to the dispute and their advisers shall maintain the confidentiality of the arbitration panel hearings where the hearings are held in closed session, in accordance with rule 39. Each party to the dispute and its advisers shall treat as confidential any information submitted by the other party to the arbitration panel which that party has designated as confidential. Where a Party to the dispute submits a confidential version of its written submissions to the arbitration panel, it shall also, upon request of the other Party, provide a non-confidential summary of the information contained in its submissions that could be disclosed to the public as soon as possible but not later than thirty (30) days after the date of either the request or the submission, whichever is later. Nothing in these rules shall preclude a Party to the dispute from disclosing statements of its own positions to the public to the extent that, when making reference to information submitted by the other Party, it does not disclose any information designated by the other Party as confidential.
Ex parte contacts
47. The arbitration panel shall not meet or communicate with a party in the absence of the other party.
48. No member of the arbitration panel may discuss any aspect of the subject matter of the proceedings with one party or both parties to the dispute in the absence of the other arbitrators.
Information and Technical Advice
49. The arbitration panel shall notify to the parties of its intention to request the opinion of experts or information from any relevant source. For greater certainty, the opinion or information obtained pursuant this provision do not discharge the parties of their corresponding burden of proof.
50. The arbitration panel will take into account the cost of any request for information or opinion of experts in order not to excessively increase the costs of the dispute settlement procedure.
51. The arbitration panel shall provide the parties with a copy of the information or the expert’s opinion received and shall grant them a reasonable time to present their comments.
Amicus curiae briefs
54. Unless the parties agree otherwise within five (5) days of the date of the establishment of the arbitration panel, the arbitration panel shall receive unsolicited written briefs from interested natural persons of a Party or legal persons established in the territory of a party and which are independent from the government of any of the Parties, provided that they are received by the panel within 10 days of the date of the establishment of the arbitration panel.
55. Amicus curiae submission shall:
(a) be concise and in no case longer than twenty-two thousand five hundred (22,500) characters typed, including spaces, footnotes, notes at the end of the text and any attachment;
(b) be directly relevant to the issue under consideration by the arbitration panel;
(c) contain a description of the person making the submission, whether natural or legal, including its nationality or place of establishment, the nature of their activities and, in the case of legal persons, information on its members, its legal status, general objectives;
(d) provide information on any source of financing;
(d) specify the nature of the interest that the person has in the arbitration proceeding.
(e) be drafted in the languages chosen by the parties in accordance with Rules 58 and 59 of these Rules of Procedure.
56. The arbitration panel shall list in its ruling all the submissions it has received that conform to Rules 54 and 55. The arbitration panel shall not be obliged to address in its ruling the arguments made in such submissions. The arbitration panel shall ensure that the parties have the opportunity to comment in written on any amicus curiae submission before the date of the hearing. The comments of the parties to the dispute shall be delivered within ten (10) days of receipt of the submission, and any such comments shall be taken into consideration by the arbitration panel.
Urgent cases
57. In cases of urgency referred to in Title [XX] of Part [X] of the Agreement, the arbitration panel, after consulting the parties, shall adjust the time limits referred to in these rules as appropriate and shall notify the parties of such adjustments.
Translation and interpretation
58. During the consultations referred to in Article [4] of Title [XX] of this Agreement, and no later than the meeting referred to in Rule [13(d)], the parties shall endeavour to agree on a common working language for the proceedings before the arbitration panel.
59. If the parties are unable to agree on a common working language, each party may choose any of its official languages as its working language for the proceedings.
However, if a party chooses a language that is not an official language of the WTO, it shall provide, at the time of filing, a translated version of all its written submissions into the language chosen by the other party and shall arrange for and bear the costs of interpretation of its oral submissions to and from the language chosen by the other party.
60 Arbitral awards and rulings shall be issued in the common working language chosen by the parties. If the parties are unable to agree on a common working language, the arbitral panel awards and panel rulings shall be issued in any of the official languages of the WTO chosen by the panel. Any costs incurred for translation of an arbitration awards and rulings shall be borne equally by the parties.
61. Any party may provide, within five (5) days of its receipt, comments on the accuracy of the translation of any translated version of a document drawn up in accordance with these rules.
Calculation of the time-limits
62. Where, a party receives a document on a date other than the date on which this document is received by the other Party, any period of time that is calculated on the basis of the date of receipt of that document shall be calculated from the last date of receipt of that document.
Other procedures
63. These Rules of Procedure are also applicable to procedures established under Articles [16, 17, 18 and 19] of Title [XX] of Part [X] of this Agreement. However, the time‑limits laid down in these Rules of Procedure shall be adjusted in line with the special time‑limits provided for the adoption of a ruling by the arbitration panel in those other procedures.
64. In the event of the original panel, or some of its members, being unable to reconvene for the procedures established under Articles [16, 17, 18 and 19] of Title [XX], the procedures set out in Article [8] of Title [XX] shall apply.
Arbitral awards
65. The arbitral award must contain the following details, in addition to any other elements which the arbitration panel may consider appropriate for inclusion:
a) the parties;
b) the name of each of the members of the arbitration panel and the date of its establishment;
c) the terms of reference of the arbitration panel, including a description of the measure at issue;
d) the arguments of each of the parties;
e) a description of the development of the arbitration procedure, including a summary of the actions taken
c) description of the factual elements of the dispute;
d) the decision reached in relation to the dispute, indicating the factual and legal grounds;
e) the date of issue; and
f) the signature of all the members of the arbitration panel.
ANNEX II
CODE OF CONDUCT FOR MEMBERS OF ARBITRATION PANELS AND MEDIATORS
Definitions
1. In this Code of Conduct:
(a) “arbitrator” means a member of an arbitration panel effectively established under Article [8] of Title [XX] of this Agreement;
(b) "mediator" means a person who conducts a mediation procedure in accordance with Article [5] of Title [XX] of Part [X] of this Agreement;
(b) "candidate" means an individual whose name is on the list of arbitrators referred to in Article [7] paragraph [2] of Title [XX] and who is under consideration for selection as a member of an arbitration panel under Article [8] of Title [XX] of Part [X] of this Agreement;
(c) "assistant" means a person who, under the terms of appointment of an arbitrator, conducts, researches or provides assistance to that arbitrator;
(d) "proceeding", unless otherwise specified, means an arbitration panel proceeding under Title [XX] of the Agreement;
(e) "staff", in respect of an arbitrator, means persons under the direction and control of the arbitrator, other than assistants;
(f) “expert”: means a person with specialized and recognized knowledge and experience in the field in question that is requested by an arbitration panel or mediator, or whose opinion is submitted to or requested by any of the parties.
Responsibilities to the Process
2. Every candidate and arbitrator shall avoid impropriety and the appearance of impropriety, shall be independent and impartial, shall avoid direct and indirect conflicts of interests and shall observe high standards of conduct so that the integrity and impartiality of the dispute settlement mechanism is preserved. Former arbitrators must comply with the obligations established in paragraphs [15, 16, 17 and 18] of this Code of Conduct.
Disclosure obligations
3. Prior to confirmation of her or his selection as an arbitrator under Article [8] of Title [XX] of the Agreement, a candidate shall disclose any interest, relationship or matter that is likely to affect his or her independence or impartiality or that might reasonably create an appearance of impropriety or bias in the proceeding. To this end, a candidate shall make all reasonable efforts to become aware of any such interests, relationships and matters.
4. A candidate or arbitrator shall communicate matters concerning actual or potential violations of this Code of Conduct to the [Trade Committee] for consideration by the Parties.
5. Once selected, an arbitrator shall continue to make all reasonable efforts to become aware of any interests, relationships or matters referred to in paragraph 3 of this Code of Conduct and shall disclose them. The disclosure obligation is a continuing duty which requires an arbitrator to disclose any such interests, relationships or matters that may arise during any stage of the proceeding. The arbitrator shall disclose such interests, relationships or matters by informing the [Trade Committee], in writing, for consideration by the parties.
Duties of arbitrators
6. Upon confirmation of his or her selection an arbitrator shall be available to perform and shall perform her or his duties thoroughly and expeditiously throughout the course of the proceeding, including any proceedings on the same dispute under Articles [16, 17, 18 and 19] of Title [XX], and with fairness and diligence.
7. An arbitrator shall consider only those issues raised in the proceeding and necessary for a ruling and shall not delegate this duty to any other person.
8. An arbitrator shall take all appropriate steps to ensure that his or her assistant and staff are aware of, and comply with the relevant provisions of this Code of Conduct, mutatis mutandis
9. An arbitrator shall not engage in ex parte contacts concerning the proceeding.
Independence and impartiality of arbitrators
10. An arbitrator shall be independent and impartial and avoid creating an appearance of impropriety or bias and shall not be influenced by self-interest, outside pressure, political considerations, public opinion, and loyalty to a Party or fear of criticism. An arbitrator shall not take instructions from any organisation or government or be affiliated to a government, including governmental organization, of a Party to the Agreement.
11. An arbitrator shall not, directly or indirectly, incur any obligation or accept any benefit that would in any way interfere, or appear to interfere, with the proper performance of her or his duties.
12. An arbitrator may not use her or his position in the arbitration panel to advance any personal or private interests and shall avoid actions that may create the impression that others are in a special position to influence her or him.
13. An arbitrator may not allow financial, business, professional, family or social relationships or responsibilities to influence her or his conduct or judgement.
14. An arbitrator must avoid entering into any relationship or acquiring any financial interest that is likely to affect her or his impartiality or that might reasonably create an appearance of impropriety or bias.
Obligations of former members
15. All former arbitrators must avoid actions that may create the appearance that they were biased in carrying out their duties or derived advantage from the decision or ruling of the arbitration panel.
Confidentiality
16. No arbitrator or former arbitrator shall at any time disclose or use any non-public information concerning a proceeding or acquired during a proceeding except for the purposes of that proceeding and shall not, in any case, disclose or use any such information to gain personal advantage or advantage for others or to adversely affect the interest of others.
17. An arbitrator shall not disclose an arbitration panel ruling or parts thereof prior to its publication in accordance with Article [12 paragraph 4] of Title [XX].
18. An arbitrator or former arbitrator shall not disclose the deliberations of an arbitration panel, or any member's view at any time.
Expenses
19. Each arbitrator shall keep a record and render a final account of her or his expenses, as well as the expenses of his or her assistant.
Mediators
20. The disciplines described in this Code of Conduct as applying to arbitrators or former arbitrators shall apply, mutatis mutandis, to mediators and, where applicable, to former mediators.
Experts
21. The following rules apply to the experts whose opinion is requested by the arbitration panel.
a) They shall disclose any interest, relationship or matter that could affect their independence or impartiality. Such experts shall act in their own capacity and shall not accept or seek instructions from any government or organization in delivering their opinion.
b) They shall not engage in ex parte contacts in the course of the proceeding for which their opinion is requested.
c) They shall not disclose or use any non-public information acquired during a proceeding for which their opinion is requested except for the purposes of the proceeding and shall not, in any case, disclose or use any such information to gain personal advantage or advantage for others or to adversely affect the interest of others.
d) Unless otherwise agreed by the parties, they shall not disclose their opinion or parts thereof prior to the publication of the arbitration panel award.
e) They shall keep a record and render a final account of their expenses.
22. The opinions of experts presented to the arbitration panel shall be accompanied, or preceded, by a declaration by the expert confirming its commitment to abide by the obligations described in paragraph [21], as applicable.
ANNEX III
MEDIATION
Article 1
Objective
The objective of this Annex is to facilitate the finding of a mutually agreed solution through a comprehensive and expeditious procedure with the assistance of a mediator.
Article [X]
Provision of Information
1. At the request of a Party, the other Party shall promptly provide information and respond to questions pertaining to any existing or proposed measure that materially affects the operation of Part X [Trade] of this Agreement.
2. Information provided under this Article is without prejudice as to whether the measure is consistent with the Part X [Trade] of this Agreement.
Article 3
Initiation of the Procedure
1. A Party may request that the Parties enter into a mediation procedure at any time, by means of a written request delivered to the other Party. The request shall be sufficiently detailed to present the concerns of the requesting Party clearly and shall:
(a) identify the specific measure at issue;
(b) provide a statement of the alleged adverse effects that the requesting Party believes the measure has, or will have, on trade between the Parties; and
(c) explain how the requesting Party considers that those effects are linked to the measure.
2. The mediation procedure may only be initiated by mutual agreement of the Parties. When a request is made pursuant to paragraph 1, the Party to which the request is made shall give sympathetic consideration to the request and deliver its written acceptance or rejection to the requesting Party within 10 days of its receipt.
3. Consultations, including under the Dispute Settlement Title [XX], are not required before initiating the mediation procedure. However, a Party should normally avail itself of the other relevant cooperation or consultation provisions provided for in this Agreement before initiating the mediation procedure.
Article 4
Selection of the Mediator
1. The Parties shall endeavour to agree on a mediator within 15 days of the delivery of the acceptance referred to in Article 3 paragraph 2.
2. A mediator shall not be a national of either Party, unless the Parties agree otherwise.
3. In the event that the Parties are unable to agree on the mediator within the time frame laid down in paragraph [1], either Party may request the chair of the [Trade Committee], or the chair's delegate, to select the mediator by lot from the list established under Article [7 paragraph 4] of the Dispute Settlement Title. Representatives of both Parties shall be invited, with sufficient advance notice, to be present when the lots are drawn. In any event, the drawing of lots shall be carried out with the Party/Parties that are present.
4. The chair of the [Trade Committee], or the chair's designee, shall select the mediator within five days of the request made pursuant to paragraph 2 of this Article.
5. Should the list referred to in Article [7 paragraph 4] of the Dispute Settlement Title not be established at the time a request is made pursuant to Article [3], the mediator shall be drawn by lot from the individuals which have been formally proposed by one or both of the Parties.
6. The mediator shall, in an impartial and transparent manner, assist the Parties in bringing clarity to the measure and its possible trade effects, and in reaching a mutually agreed solution.
7. The Code of Conduct for Members of Arbitration Panels and Mediators set out in Annex XX shall apply to mediators, mutatis mutandis.
8. [Rules 5 to 12 (Notifications) and 58 to 61] (Translation and interpretation) of the Rules of Procedure for Arbitration set out in Annex [XX] shall apply, mutatis mutandis.
Article 5
Rules of the Mediation Procedure
1. Within 10 days of the appointment of the mediator, the Party which invoked the mediation procedure shall deliver a detailed, written description of its concerns to the mediator and to the other Party, in particular of the operation of the measure at issue and its trade effects. Within 20 days of the receipt of this description, the other Party may deliver written comments on the description. Either Party may include any information that it deems relevant in its description or comments.
2. The mediator may decide on the most appropriate way of bringing clarity to the measure concerned and its possible trade effects. In particular, the mediator may organize meetings between the Parties, consult them jointly or individually and provide any additional support requested by the Parties. The mediator shall seek the assistance of, or consult with, relevant experts and stakeholders upon agreement of the Parties.
3. The mediator shall not advise or comment on the consistency of the measure at issue with this Agreement. The mediator may offer advice and propose a solution for the consideration of the Parties. The Parties may accept or reject the proposed solution, or agree on a different solution.
4. The mediation procedure shall take place in the territory of the Party to which the request was addressed, or by mutual agreement in any other location or by any other means.
5. The Parties shall endeavour to reach a mutually agreed solution within 60 days of the appointment of the mediator. Pending a final agreement, the Parties may consider possible interim solutions, particularly if the measure relates to perishable goods.
6. Either Party may make the solution subject to the completion of any necessary internal procedures. Mutually agreed solutions shall be made publicly available. The version disclosed to the public shall not contain any information a Party has designated as confidential.
7. On request of the Parties, the mediator shall deliver a draft factual report to the Parties, providing a brief summary of (1) the measure at issue; (2) the procedures followed; and (3) any mutually agreed solution reached, including possible interim solutions. The mediator shall allow the Parties 15 days to comment on the draft report. After considering the comments of the Parties received within that period, the mediator shall, within 15 days, deliver a final factual report to the Parties. The factual report shall not include any interpretation of this Agreement.
8. The procedure shall be terminated:
(a) by the adoption of a mutually agreed solution by the Parties, on the date of the adoption thereof;
(b) by mutual agreement of the Parties at any stage of the procedure, on the date of that agreement;
(c) by a written declaration of the mediator, after consultation with the Parties, that further efforts at mediation would be to no avail, on the date of that declaration; or
(d) by a written declaration of a Party after exploring any possible mutually agreed solutions under the mediation procedure and after having considered any advice and proposed solutions by the mediator, on the date of that declaration.
Article 6
Implementation of a Mutually Agreed Solution
1. Where the Parties reached agreement on a solution, each Party shall take the measures it considers necessary to implement the mutually agreed solution within the agreed timeframe.
2. The implementing Party shall notify the other Party, in writing, of any steps or measures taken to implement the mutually agreed solution.
Article 7
Confidentiality
Unless the Parties agree otherwise, and without prejudice to Article 5(6), all steps of the procedure, including any advice or proposed solution, are confidential. However, any Party may disclose to the public the fact that mediation is taking place.
Article 8
Relationship to Dispute Settlement Procedures
1. The mediation procedure is without prejudice to the Parties’ rights and obligations under the provisions on Dispute Settlement in this Agreement, or any other agreement.
2. A Party shall not rely on, or introduce as evidence, in other dispute settlement procedures under this, or any other Agreement, nor shall a panel take into consideration:
(a) positions taken by the other Party in the course of the mediation procedure or information gathered under Article 5.2;
(b) the fact that the other Party has indicated its willingness to accept a solution to the measure subject to mediation; or
(c) advice given or proposals made by the mediator.
3. A mediator may not serve as a member of a panel in a dispute settlement proceeding under this Agreement or under the WTO Agreement, or other agreement to which the Parties are party, involving the same matter for which they have been a mediator.
Article [X]
Costs
1. Each Party shall bear its own expenses derived from the participation in the panel or mediation procedure.
2. The Parties shall share jointly and equally the expenses derived from organisational matters, including the remuneration and expenses of the arbitrators and of the mediator in accordance with Annex [X] (Rules of Procedure).
[1] Note - numbering to be modified and cross-references to be checked and modified