Over the last century, the international legal community has expanded by creating many treaties, agreements and inter-governmental organizations. With increased collaboration and relations, countries have incorporated various dispute resolution mechanisms to enforce this new law and procedure. These devices include regional tribunals, such as the European Court of Human Rights; dispute-specific tribunals, such as the International Criminal Tribunal for the former Yugoslavia; thematic tribunals, such as the International Criminal Court; treaty specific tribunals, such as the World Trade Organization (WTO) Dispute Settlement Understanding (DSU); and generalized tribunals, such as the International Court of Justice (ICJ).

International legal community advocates grapple with how the judgments and declarations by these tribunals can be enforced effectively and how to encourage states to comply with the decisions. This paper will focus on two of these bodies, the WTO DSU and the ICJ, examining their different methods of enforcement, the consequences resulting from a violation and the advantages and disadvantages of each tribunal.

II. Overview of the Tribunals

a. International Court of Justice

The Statute of the ICJ (“Statute”) does not directly discuss how judgments will be enforced nor does it affirmatively declare the binding nature of its judgments. Article 59 of the Statute indirectly binds parties to Court decisions by specifically excluding application of the decisions to non-parties: “The decision of the Court has no binding force except between the parties and in respect of that particular case.” Statute of the ICJ, Article 59. Furthermore, Article 60 states that, “The judgment is final and without appeal.” As a body under the auspices of the United Nations (UN), the UN Charter (to which the Statute is annexed) constitutes a source for additional clarification of the intention of the Statute. In Article 94(1), the UN Charter declares, “Each member undertakes to comply with the decision of the International Court in any case to which it is a party.” The ICJ statute neither foresees nor addresses the possibility of noncompliance. Neither the Statute nor the UN Charter enumerates specific consequences of a judgment or of a failure to comply with a judgment. Nonetheless, the inclusion of Article 94(1) in the UN Charter suggests that creditor parties (i.e. the winner) can present evidence of the breach to the UN Security Council (UNSC) for monitoring and enforcement. The UNSC has never actually implemented measures based on Article 94(1) of the UN Charter and has rarely intervened in the enforcement of an ICJ case. Constanze Schulte, Compliance with Decisions of the International Court of Justice 44 (2004). When a winning party refers a non-compliance case to the UNSC, the UNSC may respond in one of four ways: (1) it may decide not to take any action; (2) it may call for compliance by the creditor country thereby adding credibility to the ICJ judgment; (3) it may make recommendations to facilitate implementation of the judgment, including intervention through economic or diplomatic sanctions or, in an extreme situation, by use of force; or (4) it may call upon member states to exert political pressure upon the debtor. Nevertheless, the UNSC does not have the right to appellate review of ICJ decisions nor does it serve as an automatic enforcement agency. The Charter merely authorizes the UNSC to use its discretion of review as a way of serving its mandate of maintaining international peace and security. In addition to appealing to the UNSC, a winning state may request neutral third parties to exert political pressure on the loser for compliance, or may seek a judgment from a national court of the debtor or a third party ordering compliance.

b. World Trade Organization Dispute Settlement Understanding

Unlike the ICJ, the WTO foresees and predicts possible noncompliance, and therefore explicitly describes procedures for dispute resolution, compliance and enforcement in General Agreement on Tariffs and Trade (GATT) Article XXIII and Annex II, the Dispute Settlement Understanding (DSU). By acceding to the WTO, member states automatically become bound to the prescribed procedures and subject to mandatory jurisdiction. A dispute under the agreement is defined as the nullification or impairment of any benefit under the agreement. If members cannot agree upon a solution through bi- or multilateral consultations, the DSU stipulates that parties must then submit any disagreement to the Dispute Settlement Body (DSB) comprised of the Member states. WTO jurisprudence has found that nullification or impairment need not cause actual damage because the nullification or impairment relates to the expectation of a competitive relationship rather than to actual trade conditions. Upon the request of member states, the DSB creates panels to hear the particular issue in dispute and to make recommendations which are then adopted by the DSB. Article 17 of the DSU also provides for a standing appellate body as part of the permanent structure of the WTO dispute resolution system. In addition, Article 2(1) of the DSU mandates the DSB to, “maintain surveillance of implementation of rulings and recommendations and authorize suspension of concessions and other obligations covered under the agreements.” DSU Article 21 elaborates on the supervision of implementation of recommendations and rulings of the panels by explicitly calling for “prompt compliance with recommendations or rulings” as “essential in order to ensure effective resolution of disputes to the benefits of all Members.” Additionally, DSU Article 21(3) requires the DSB to review a Member’s intentions for implementation of the recommendations and rulings by requiring the Member to submit a proposal within thirty days of the adoption of the panel report. During the implementation period, the DSB continues to monitor a Member’s progress by requiring Members to file mandatory progress reports under Article 21(6).

The primary objective of the WTO is to minimize disruptions to free trade; therefore, the dispute settlement system emphasizes the correction of wrongs or the removal of barriers rather than restitution or compensation to the affected party. Instead of a monetary judgment, compliance with the panel recommendation requires the effective removal of trade barriers “within a reasonable time” less than eighteen months. Under DSU Art. 22, if a party does not comply within the agreed upon time period, the complainant may petition the DSB to create an enforcement panel to determine whether there was compliance or to negotiate voluntary compensation by the violator to the affected party. This rarely succeeds as most countries are unwilling to simply volunteer monetary compensation. If the violator continues to defy the recommendation, the complainant may petition the DSB for approval of suspension of concessions as a means of “re-leveling the playing field.” If approved, these suspensions must be comparable to that of the original violation both in terms of amount and type of affected product, and should serve only as a temporary measure until the violator changes its policies.

III. Analysis

As applied, the primary enforcement mechanism for both the ICJ and the WTO is political and/or economic pressure from other countries. No direct, immediate response is permitted under either system. If the losing party fails to rectify the dispute, then the winning party is reliant on the international community for enforcement. This may include enforcement through domestic courts. Domestic litigation is especially effective where the international commitment and the domestic law are closely aligned. Furthermore, if the judgment of the ICJ reflects the domestic laws and policies of a defendant country, that country is more likely to comply. In either tribunal, the winning party must file a motion to compel compliance.

The ICJ may respond to this motion by reaffirming the decision and requesting that members freeze assets of the losing party unless the judgment is paid. However, members are under no obligation to do so. If this fails, and the Security Council declines action, then no effective, legal enforcement mechanism exists. Early ICJ decisions resulted in not just dissatisfaction, but also in blatant defiance. For example, the judgment of the Corfu Channel case did not become effective until forty-seven years after its declaration. After the ICJ issued a judgment in favor of the UK over Albania, Albania failed to pay the required compensation. The UK declined to appeal to the Security Council due to the imminent Soviet veto. Despite the economic differences, the UK refused to write off Albania’s debt in order to prevent setting a precedent that would undermine the ICJ’s authority. Schulte at 97. In Military and Paramilitary Activities in and against Nicaragua, the victor, Nicaragua, likewise faced the weakness of enforcement using the Security Council. After the ICJ entered judgment for Nicaragua on jurisdiction, the U.S. failed to participate further in the case. After hearing the case on the merits, the ICJ ordered the U.S. to cease breaches of the legal violations of the Friendship, Commerce and Navigation treaty with Nicaragua and to pay reparations to Nicaragua. The U.S. refused to pay reparations and continued to openly support the Contras in the precise manner prohibited by the judgment. In response, Nicaragua sent the U.S. Secretary of State a letter via the president of the UNSC and attempted to enforce the judgment through the UNSC, the UN General Assembly (UNGA) and the ICJ. After discussions of the situation by the UNSC and the drafting of a resolution ordering compliance, the U.S. invoked its veto power thereby effectively preventing passage of the resolution. In this case, the role of the ICJ was highly significant: it allowed a small nation, Nicaragua, to confront a superpower, the U.S., and to present its grievances in an international forum. Despite the possibility of non-compliance, use of the ICJ has, on occasion, increased the political support of the international community for the complainant. For example, Iran’s refusal to comply with the Court’s order to release hostages, the U.S. “achieved greater legitimacy in pursuing its claims” and “gathering international support and applying pressure to a diplomatically isolated opponent.” Schulte at 172. Consequently, the pressure of the international community—rather than the judgment of the ICJ—prompted a resolution. This case, as well as the Corfu Channel case, demonstrates the power of a permanent UNSC member (or very close ally or enemy) to unilaterally prevent the UNSC from taking any steps to enforce an ICJ decision.
Unlike the ICJ, the WTO seeks to create neutral DSU panels. No panel member may be of the same nationality as a party to the dispute, and a representative from a developing country must serve on the panel where a developing country is a party. This contrasts with the ICJ where each party is entitled to a judge of its nationality either from the standing court or on an ad hoc basis. Additionally, the DSU provides for appellate review as a check on the panels ensuring that no material flaws occur in the interpretation of law or in the application of the facts to the law. As the DSU functions on a reverse consensus basis, one country cannot independently block issuance of a judgment or an order to comply. This permits developing countries and small countries to challenge the primary players such as the U.S. and European Union (EU).

The WTO depends on a system of reciprocity where the penalty for noncompliance is unfavorable treatment toward the violator by the debtor with the support of the international community. As the cliché avers, “Money talks.” Unlike the ICJ, the WTO does not revolve around political status; it centers on economic policy with politics serving as a collateral matter. Unfortunately, many disputes under the WTO that had succeeded in reaching the DSU panel and DSB are ineffective because they are “stranded against the wall of noncompliance.” Joost Pauwelyn, Enforcement and Countermeasures in the WTO, 94 A.J.I.L. 335, 338 (2000). Pauwelyn hypothesizes that one reason for this noncompliance may be that when the power-based GATT system shifted to the rule-based WTO system, member states failed to adapt available remedies. Id. Despite the focus away from political motivation, political will continues to play an enormous role in the WTO system: countries are unable to change their domestic policies to conform to WTO requirements when the political will does not exist.

To powerful economic units such as the U.S. and the EU, challenges by small states are easily ignored. As seen in the ICJ case between the U.S. and Nicaragua, political pressure frequently fails to result in a change of policy. On the other hand, when a small weak country provides important resources to the more powerful ones, the weak country has more leverage against the powerful one. For example, in order to avoid the risk that an oil producing country would impede access to oil importation, the U.S. would be more likely to amend its restrictions as a result of a challenge by Venezuela or Saudi Arabia than it would if challenged by Cameroon or Jamaica. More importantly, if the U.S. limits access to its market by imposing high tariffs or other non-tariff barriers, then it risks reciprocal action from its trading partners which would limit the markets for U.S. exports. Consequently, the U.S. would lose the benefit of increased economic activity, business and market access provided by the open trade system promoted by the WTO. If the U.S. fails to implement a judgment against it, then the U.S. will be unable to force another country to do so when that country’s actions nullify and impair U.S. interests. Nonetheless, countries falling into the least developed country category (LDC) as defined by the UN rarely become involved in WTO panel proceedings “not due to a lack of disputes but rather to a preference for settling disputes involving LDCs without recourse to costly WTO dispute settlement procedures.” Ernst-Ulrich Petersmann, Justice as Conflict Resolution: Proliferation, Fragmentation, and Decentralization of Dispute Settlement in International Trade, 27 U. Pa. J. Int’l Econ. L. 273, 307 (2006). LDCs see prospective WTO remedies as less attractive than other solutions negotiated through bilateral negotiation which may result in financial reparations.

Unlike the ICJ, the WTO DSU presents a legal procedure to be implemented in the case of violation that includes disclosure through reports to and monitoring by the DSB. DSU, Article 21(6). The DSB reviews the progress of the parties in a biannual written status report submitted by the parties regarding their progress implementing the recommendations of the panel until the dispute is resolved. The parties to a WTO dispute, along with the panel and/or the DSB, negotiate an acceptable timeline—usually fifteen to eighteen months—for execution of the panel’s judgment by rectifying the violation. DSU, Article 21(3). If, after this “reasonable implementation period” has expired, the violation has not been corrected, the petitioner-creditor may appeal to the DSB. Article 21.5 of the DSU, the Recourse Provision, provides that, “Where there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel.” The panel will then reconvene and must determine within ninety days whether the violation continues to exist. If the panel finds that the violation has not been corrected and the violator continues to be noncompliant, the petitioner may propose concessions to suspend against the debtor country. The DSB ensures that the level of concession suspension proposed is proportional to the level of nullification and impairment of the original violation. Although the DSB has authorized retaliation through the suspension of concessions in several cases, the prevailing party is usually hesitant to actually impose them. For example, in the European Communities Banana case (recourse by Ecuador) and Brazil Aircraft (recourse by Canada), the DSB authorized retaliation; however, neither Ecuador nor Canada chose to exercise their option of suspending benefits.

A major advantage of the built-in review mechanism under DSU Article 21.5 is that the process prevents indefinite stalling of a country required to implement changes because it does not permit a new panel to be instated for a continuing violation. Jason Kearns and Steve Charnovitz, Adjudicating Compliance in the WTO 5(2) JIEL 331, 334 (2002). This continuity does not allow the time line to recommence for an issue already under examination simply because the defendant country makes a nominal change in its regulations in order to get a new panel. The possibility of returning to a panel—usually the same panel—provides an incentive for defendant countries not only to comply with DSB recommendations, but also to submit truthful and accurate reports.

Former WTO appellate body member David Bacchus asserts that although the WTO DSU is the most effective international dispute resolution mechanism at this time, it can still be greatly improved. David Bacchus, Lecture at Washington College of Law American University, April 1, 2008. Bacchus suggests that enforcement and compliance with WTO obligations could be improved by imposing more effective remedies such as monetary damages or the use of multiple complainants so that concessions suspended in response to a country’s failure to implement the panel decision and correct the violation would pose a more significant harm upon the respondent.

IV. Conclusion

Neither the ICJ nor the WTO DSU offers an ideal method of international dispute resolution. Nevertheless, each provides a forum that allows for peaceful resolution of common tensions between states. Although under the ICJ Statute all ICJ judgments are final and binding, in reality, states frequently are noncompliant. If the matter relates to peace and security, then the Security Council may, upon petition, step in to pressure the defiant country to adhere to the judgment. However, this enforcement mechanism has never worked due to the refusal of the UNSC to review cases and the power of the member states represented on the UNSC to veto proposals for resolutions demanding enforcement. In contrast, the WTO DSU prohibits citizens of a country to serve on a panel where their country is a party (direct or interested) to the case. This allows for increased neutrality and a more just solution. In addition to political pressure to abide by the judgment as found in the ICJ, the WTO also contains explicit economic pressures that allow for comparable suspension of benefits by the affected member. When money is involved and countries feel a threat to access to other markets for export, they are more motivated to abide by the judgment. Although reciprocity weighs heavily on the compliance of states, the WTO manipulates the reciprocity to work with the global economic system and encourage members to comply.

A major advantage of the WTO that has no counterpart in the ICJ is a procedure for follow up if a country violates or fails to abide by the judgment. The DSB serves as an additional check on countries that are more likely to abide by the judgment knowing their progress will be regularly examined. Furthermore, the DSU describes consequences against the defiant state for noncompliance by allowing the state whose interests have been affected to take recourse and retaliation by the suspension of concessions. This alone may act as a deterrent for states who desire access to markets for their exported items.

International legal practitioners have exerted great effort in designing and implementing peaceful mechanisms of dispute resolution. Despite these efforts, the inter-governmental dispute resolution systems found in the ICJ and the WTO DSU pose significant difficulties in implementation of judgments. Neither the ICJ nor the WTO DSU effectively resolves all disputes that fall within their jurisdictions because of the inherent unenforceability of sovereign governments and the inability of the international community to interfere therein. Now that inter-governmental and international organizations have been well established for nearly a century, the challenge facing international lawyers is to find the balance between international cooperation and national sovereignty when creating, interpreting and amending dispute resolution mechanisms.