This month’s tralac Newsletter focuses on the settlement of trade disputes, emphasizing recent developments in Africa. We do so because this topic has gained in importance and sheds light on the benefits of rules-based trade governance. Certainty about the interpretation and implementation of trade agreements and the availability of remedies obviously bring more predictability and extra legitimacy.
Our discussion of the Dispute Settlement Protocol of the African Continental Free Trade Agreement (AfCFTA) confirms that the Founders shared the same belief. One of the objectives in the AfCFTA Agreement is to “establish a mechanism for the settlement of disputes concerning… rights and obligations”. However, the jury is still out as to whether this system will in fact be used. Only the State Parties may bring applications under this Protocol, which has been adopted in Kigali in March 2018. But, as is known, African States never litigate against each other over trade issues.
That brings us to a new trend, the increase in trade-related cases before domestic courts. The private sector is increasingly prepared to pursue judicial remedies in such disputes. National Courts allow them standing when the law of the land is at stake. We report on some of these cases and show that more and more service-related disputes are now being decided. We report on the Malawi Mobile judgment of the COMESA Court of Justice (also involving a private litigant) and the ruling in Namibia on the powers of the national communications regulator.
The latter judgment discusses important administrative law principles. They are related to what is often called due process requirements in trade law instruments. In some ways these disputes involve more familiar disciplines (compared to trade in goods disputes) such as administrative justice, Constitutional Law and the principles of statutory interpretation. There may also be separation of powers challenges.
We have previously written about design flaws in the legal instruments of the RECs and the political challenges faced by regional Courts and Tribunals. The demise of the SADC Tribunal in 2011 was a significant low-water mark. The SADC Summit unanimously decided to abolish that Tribunal after it had ruled against Zimbabwe when it expropriated private land without compensation. The SADC Summit then adopted a new Protocol for the SADC Tribunal (which is not yet in force), without allowing private parties standing before this forum.
Domestic Courts have since ruled on the consequences of that SADC Summit decision and the fact that citizens’ right of access to justice has been curtailed. They are critical of their Governments’ participation in this development and want remedial action to be taken. One of the blogs in this Newsletter discusses the recent Judgment of the High Court of Tanzania to this effect.
These disputes raise important questions about the scope of judicial review over international affairs and the actions of regional bodies. The Tanzanian judgment suggests certain remedies, which differ to some extent from those ordered earlier by the South African Constitutional Court when it ruled on the same issue. The South African Constitutional Court concluded that the participation of the former South African President in that fateful SADC Summit decision was irrational and invalid.
These cases involve ground-breaking jurisprudential issues, but they are also indicative of the weaknesses in Africa’s regional integration endeavours. Had the legal instruments of the RECs been designed to clarify and bolster Community Law and to provide for institutions to protect the integrity of the regimes in question, national Courts would not have been involved in disputes about the lawfulness of Member States’ acts on the international plane. REC Secretariats would have filed applications in regional Courts to ensure that the founding instruments are protected and enforced. This does not happen; the Secretariats are not allowed to do so.
Member States are apparently still of the belief that their “sovereignty” is paramount. This reasoning is flawed; international trade and integration cannot succeed if a particular Member State can flaunt the rules every time it wants to pursue domestic benefits. It shows that essential building block are missing. We have previously analyzed sovereignty as a legal concept, arguing that the signing and ratification of international agreements are acts of sovereignty.
In one of the cases discussed in a new Trade Brief on the ruling by the EAC Court of Justice on excise duties imposed by the Ugandan Revenue Authority, it is explicitly stated that the Parties to an international Agreement can never invoke their national law (or Constitutions) as justifications for violating their international obligations.
That brings us to our discussion of the concept of Community Law. We offer a detailed discussion of the ruling in this case – a well-reasoned judgment and analysis of all relevant EAC legal instruments. It shows how Governments and national legislatures ignore the dictates of the very Community Law which they have ratified and incorporated into their municipal legal systems.
We are aware of the difficulties faced by Africa’s regional integration arrangements; when States at very different levels of economic development become parties to the same trade agreements. We recognize that they face unique challenges. The RECs cannot be compared to the European Union, from which the Community Law vocabulary has been borrowed. But we are also making the case that when exceptions to mutually agreed rules need to be included (as happens in all such agreements) they should be formulated in clear terms, be conditional and justiciable.
This Newsletter discusses one recent case dealing with a WTO dispute. It deals with the dispute between Ukraine and Russia about the national security exception in Article XXI GATT. This is the first detailed ruling on this provision. It comes at a time when the WTO is in a crisis and the Trump administration has asserted a right to invoke national security as a ground for increasing tariffs on goods beyond its commitments. This judgment makes several important points about the interpretation and application of Article XXI. We list them.
We look forward to your feedback.
The tralac team