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Text of the Comprehensive Economic and Trade Agreement – Chapter twenty-nine: Dispute settlement

Section A – Initial provisions

Article 29.1 – Cooperation

The Parties shall, at all times, endeavour to agree on the interpretation and application of this Agreement, and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation.

Article 29.2 – Scope

Except as otherwise provided in this Agreement, this Chapter applies to any dispute concerning the interpretation or application of the provisions of this Agreement.

Article 29.3 – Choice of forum

1. Recourse to the dispute settlement provisions of this Chapter is without prejudice to recourse to dispute settlement under the WTO Agreement or under any other agreement to which the Parties are party.

2. Notwithstanding paragraph 1, if an obligation is equivalent in substance under this Agreement and under the WTO Agreement, or under any other agreement to which the Parties are party, a Party may not seek redress for the breach of such an obligation in the two fora. In such case, once a dispute settlement proceeding has been initiated under one agreement, the Party shall not bring a claim seeking redress for the breach of the substantially equivalent obligation under the other agreement, unless the forum selected fails, for procedural or jurisdictional reasons, other than termination under paragraph 20 of Annex 29-A, to make findings on that claim.

3. For the purposes of paragraph 2:

  1. dispute settlement proceedings 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 DSU;
  2. dispute settlement proceedings under this Chapter are deemed to be initiated by a Party's request for the establishment of an arbitration panel under Article 29.6; and
  3. dispute settlement proceedings 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.

4. Nothing in this Agreement shall preclude a Party from implementing the suspension of obligations authorised by the WTO Dispute Settlement Body. A Party may not invoke the WTO Agreement to preclude the other Party from suspending obligations pursuant to this Chapter.

Section B – Consultations and mediation

Article 29.4 – Consultations

1. A Party may request in writing consultations with the other Party regarding any matter referred to in Article 29.2.

2. The requesting Party shall transmit the request to the responding Party, and shall set out the reasons for the request, including the identification of the specific measure at issue and the legal basis for the complaint.

3. Subject to paragraph 4, the Parties shall enter into consultations within 30 days of the date of receipt of the request by the responding Party.

4. In cases of urgency, including those involving perishable or seasonal goods, or services that rapidly lose their trade value, consultations shall commence within 15 days of the date of receipt of the request by the responding Party.

5. The Parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter through consultations. To this end, each Party shall:

  1. provide sufficient information to enable a full examination of the matter at issue;
  2. protect any confidential or proprietary information exchanged in the course of consultations as requested by the Party providing the information; and
  3. make available the personnel of its government agencies or other regulatory bodies who have expertise in the matter that is the subject of the consultations.

6. Consultations are confidential and without prejudice to the rights of the Parties in proceedings under this Chapter.

7. Consultations shall take place in the territory of the responding Party unless the Parties agree otherwise. Consultations may be held in person or by any other means agreed to by the Parties.

8. A Party's proposed measure may be the subject of consultations under this Article but may not be the subject of mediation under Article 29.5 or the dispute settlement procedures under Section C.

Article 29.5 – Mediation

The Parties may have recourse to mediation with regard to a measure if the measure adversely affects trade and investment between the Parties. Mediation procedures are set out in Annex 29-C.

Section C – Dispute settlement procedures and compliance

Sub section A – Dispute settlement procedures

Article 29.6 – Request for the establishment of an arbitration panel

1. Unless the Parties agree otherwise, if a matter referred to in Article 29.4 has not been resolved within:

  1. 45 days of the date of receipt of the request for consultations; or
  2. 25 days of the date of receipt of the request for consultations for matters referred to in Article 29.4.4,

the requesting Party may refer the matter to an arbitration panel by providing its written request for the establishment of an arbitration panel to the responding Party.

2. The requesting Party shall identify in its written request the specific measure at issue and the legal basis for the complaint, including an explanation of how such measure constitutes a breach of the provisions referred to in Article 29.2.

Article 29.7 – Composition of the arbitration panel

1. The arbitration panel shall be composed of three arbitrators.

2. The Parties shall consult with a view to reaching an agreement on the composition of the arbitration panel within 10 working days of the date of receipt by the responding Party of the request for the establishment of an arbitration panel.

3. In the event that the Parties are unable to agree on the composition of the arbitration panel within the time frame set out in paragraph 2, either Party may request the Chair of the CETA Joint Committee, or the Chair's delegate, to draw by lot the arbitrators from the list established under Article 29.8. One arbitrator shall be drawn from the sub-list of the requesting Party, one from the sub-list of the responding Party and one from the sub-list of chairpersons. If the Parties have agreed on one or more of the arbitrators, any remaining arbitrator shall be selected by the same procedure in the applicable sub-list of arbitrators. If the Parties have agreed on an arbitrator, other than the chairperson, who is not a national of either Party, the chairperson and other arbitrator shall be selected from the sub-list of chairpersons.

4. The Chair of the CETA Joint Committee, or the Chair's delegate, shall select the arbitrators as soon as possible and normally within five working days of the request referred to in paragraph 3 by either Party. The Chair, or the Chair's delegate, shall give a reasonable opportunity to representatives of each Party to be present when lots are drawn. One of the Chairpersons can perform the selection by lot alone if the other Chairperson was informed about the date, time and place of the selection by lot and did not accept to participate within five working days of the request referred to in paragraph 3.

5. The date of establishment of the arbitration panel shall be the date on which the last of the three arbitrators is selected.

6. If the list provided for in Article 29.8 is not established or if it does not contain sufficient names at the time a request is made pursuant to paragraph 3, the three arbitrators shall be drawn by lot from the arbitrators who have been proposed by one or both of the Parties in accordance with Article 29.8.1.

7. Replacement of arbitrators shall take place only for the reasons and according to the procedure set out in paragraphs 21 through 25 of Annex 29-A.

Article 29.8 – List of arbitrators

1. The CETA Joint Committee shall, at its first meeting after the entry into force of this Agreement, establish a list of at least 15 individuals, chosen on the basis of objectivity, reliability and sound judgment, who are willing and able to serve as arbitrators. The list shall be composed of three sub-lists: one sub-list for each Party and one sub-list of individuals who are not nationals of either Party to act as chairpersons. Each sub-list shall include at least five individuals. The CETA Joint Committee may review the list at any time and shall ensure that the list conforms with this Article.

2. The arbitrators must have specialised knowledge of international trade law. The arbitrators acting as chairpersons must also have experience as counsel or panellist in dispute settlement proceedings on subject matters within the scope of this Agreement. The arbitrators shall be independent, serve in their individual capacities and not take instructions from any organisation or government, or be affiliated with the government of any of the Parties, and shall comply with the Code of Conduct in Annex 29-B.

Article 29.9 – Interim panel report

1. The arbitration panel shall present to the Parties an interim report within 150 days of the establishment of the arbitration panel. The report shall contain:

  1. findings of fact; and
  2. determinations as to whether the responding Party has conformed with its obligations under this Agreement.

2. Each Party may submit written comments to the arbitration panel on the interim report, subject to any time limits set by the arbitration panel. After considering any such comments, the arbitration panel may:

  1. reconsider its report; or
  2. make any further examination that it considers appropriate.

3. The interim report of the arbitration panel shall be confidential.

Article 29.10 – Final panel report

1. Unless the Parties agree otherwise, the arbitration panel shall issue a report in accordance with this Chapter. The final panel report shall set out the findings of fact, the applicability of the relevant provisions of this Agreement and the basic rationale behind any findings and conclusions that it makes. The ruling of the arbitration panel in the final panel report shall be binding on the Parties.

2. The arbitration panel shall issue to the Parties and to the CETA Joint Committee a final report within 30 days of the interim report.

3. Each Party shall make publicly available the final panel report, subject to paragraph 39 of Annex 29-A.

Article 29.11 – Urgent proceedings

In cases of urgency, including those involving perishable or seasonal goods, or services that rapidly lose their trade value, the arbitration panel and the Parties shall make every effort to accelerate the proceedings to the greatest extent possible. The arbitration panel shall aim at issuing an interim report to the Parties within 75 days of the establishment of the arbitration panel, and a final report within 15 days of the interim report. Upon request of a Party, the arbitration panel shall make a preliminary ruling within 10 days of the request on whether it deems the case to be urgent.

Sub section B – Compliance

Article 29.12 – Compliance with the final panel report

The responding Party shall take any measure necessary to comply with the final panel report. No later than 20 days after the receipt of the final panel report by the Parties, the responding Party shall inform the other Party and the CETA Joint Committee of its intentions in respect of compliance.

Article 29.13 – Reasonable period of time for compliance

1. If immediate compliance is not possible, no later than 20 days after the receipt of the final panel report by the Parties, the responding Party shall notify the requesting Party and the CETA Joint Committee of the period of time it will require for compliance.

2. In the event of disagreement between the Parties on the reasonable period of time in which to comply with the final panel report, the requesting Party shall, within 20 days of the receipt of the notification made under paragraph 1 by the responding Party, request in writing the arbitration panel to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the other Party and to the CETA Joint Committee. The arbitration panel shall issue its ruling to the Parties and to the CETA Joint Committee within 30 days from the date of the request.

3. The reasonable period of time may be extended by mutual agreement of the Parties.

4. At any time after the midpoint in the reasonable period of time and at the request of the requesting Party, the responding Party shall make itself available to discuss the steps it is taking to comply with the final panel report.

5. The responding Party shall notify the other Party and the CETA Joint Committee before the end of the reasonable period of time of measures that it has taken to comply with the final panel report.

Article 29.14 – Temporary remedies in case of non compliance

1. If:

  1. the responding Party fails to notify its intention to comply with the final panel report under Article 29.12 or the time it will require for compliance under Article 29.13.1;
  2. at the expiry of the reasonable period of time, the responding Party fails to notify any measure taken to comply with the final panel report; or
  3. the arbitration panel on compliance referred to in paragraph 6 establishes that a measure taken to comply is inconsistent with that Party's obligations under the provisions referred to in Article 29.2,

the requesting Party shall be entitled to suspend obligations or receive compensation. The level of the nullification and impairment shall be calculated starting from the date of notification of the final panel report to the Parties.

2. Before suspending obligations, the requesting Party shall notify the responding Party and the CETA Joint Committee of its intention to do so, including the level of obligations it intends to suspend.

3. Except as otherwise provided in this Agreement, the suspension of obligations may concern any provision referred to in Article 29.2 and shall be limited at a level equivalent to the nullification or impairment caused by the violation.

4. The requesting Party may implement the suspension 10 working days after the date of receipt of the notification referred to in paragraph 2 by the responding Party, unless a Party has requested arbitration under paragraphs 6 and 7.

5. A disagreement between the Parties concerning the existence of any measure taken to comply or its consistency with the provisions referred to in Article 29.2 ("disagreement on compliance"), or on the equivalence between the level of suspension and the nullification or impairment caused by the violation ("disagreement on equivalence"), shall be referred to the arbitration panel.

6. A Party may reconvene the arbitration panel by providing a written request to the arbitration panel, the other Party and the CETA Joint Committee. In case of a disagreement on compliance, the arbitration panel shall be reconvened by the requesting Party. In case of a disagreement on equivalence, the arbitration panel shall be reconvened by the responding Party. In case of disagreements on both compliance and on equivalence, the arbitration panel shall rule on the disagreement on compliance before ruling on the disagreement on equivalence.

7. The arbitration panel shall notify its ruling to the Parties and to the CETA Joint Committee accordingly:

  1. within 90 days of the request to reconvene the arbitration panel, in case of a disagreement on compliance;
  2. within 30 days of the request to reconvene the arbitration panel, in case of a disagreement on equivalence;
  3. within 120 days of the first request to reconvene the arbitration panel, in case of a disagreement on both compliance and equivalence.

8. The requesting Party shall not suspend obligations until the arbitration panel reconvened under paragraphs 6 and 7 has delivered its ruling. Any suspension shall be consistent with the arbitration panel's ruling.

9. The suspension of obligations shall be temporary and shall be applied only until the measure found to be inconsistent with the provisions referred to in Article 29.2 has been withdrawn or amended so as to bring it into conformity with those provisions, as established under Article 29.15, or until the Parties have settled the dispute.

10. At any time, the requesting Party may request the responding Party to provide an offer for temporary compensation and the responding Party shall present such offer.

Article 29.15 – Review of measures taken to comply after the suspension of obligations

1. When, after the suspension of obligations by the requesting Party, the responding Party takes measures to comply with the final panel report, the responding Party shall notify the other Party and the CETA Joint Committee and request an end to the suspension of obligations applied by the requesting Party.

2. If the Parties do not reach an agreement on the compatibility of the notified measure with the provisions referred to in Article 29.2 within 60 days of the date of receipt of the notification, the requesting Party shall request in writing the arbitration panel to rule on the matter. Such request shall be notified simultaneously to the other Party and to the CETA Joint Committee. The final panel report shall be notified to the Parties and to the CETA Joint Committee within 90 days of the date of submission of the request. If the arbitration panel rules that any measure taken to comply is in conformity with the provisions referred to in Article 29.2, the suspension of obligations shall be terminated.

Section D – General Provisions

Article 29.16 – Rules of procedure

Dispute settlement procedure under this Chapter shall be governed by the rules of procedure for arbitration in Annex 29-A, unless the Parties agree otherwise.

Article 29.17 – General rule of interpretation

The arbitration panel shall interpret the provisions of this Agreement in accordance with customary rules of interpretation of public international law, including those set out in the Vienna Convention on the Law of Treaties. The arbitration panel shall also take into account relevant interpretations in reports of Panels and the Appellate Body adopted by the WTO Dispute Settlement Body.

Article 29.18 – Rulings of the arbitration panel

The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided for in this Agreement.

Article 29.19 – Mutually agreed solutions

The Parties may reach a mutually agreed solution to a dispute under this Chapter at any time. They shall notify the CETA Joint Committee and the arbitration panel of any such solution. Upon notification of the mutually agreed solution, the arbitration panel shall terminate its work and the proceedings shall be terminated.

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