he chapter on dispute resolution sets out a process for settling disputes over how to interpret or apply the agreement correctly. EFTA FTAs stipulate that differences between the parties are to be resolved by diplomatic means as far as possible. However, they also provide for an arbitration procedure for disputes that cannot be settled in this way. An arbitration tribunal of this kind is set up for each individual case and is made up of three experienced arbitrators. The tribunal will issue a binding and final ruling as to whether the measure being disputed is compatible with the FTA.
FAQs on dispute resolution
So far, there have not been any disputes against or instigated by Switzerland. Consultation within the joint committee has always been sufficient to resolve any dispute. The possibility of having a procedure for settling disputes has primarily a preventive effect in that it allows a degree of pressure to be applied to find a consensus. Unlike arbitration, which results in a binding ruling imposed by a third party, consultation allows pragmatic solutions to be found that the defendant will agree to put into action.
A plaintiff can only call for an arbitration tribunal to be convened after the consultation period has ended without the dispute having been resolved. Each party to the proceedings appoints an arbitrator. The two arbitrators then select a third, who will preside over the arbitration tribunal.
Yes, unless the parties decide otherwise.
Switzerland is keen to have proceedings conducted in public unless confidential information is being discussed. However, some FTAs, like the WTO, require cases to be heard behind closed doors.
An individual is not permitted to instigate dispute resolution proceedings under a FTA. This can only be done by the parties to that agreement, i.e. the countries that signed it. The competent Swiss authorities will decide on a case-by-case basis whether there are grounds for initiating arbitration proceedings. As well as the likely chances of success from a legal perspective, they will also need to take political considerations into account.
The arbitration tribunal assesses whether the measure being disputed complies with the FTA and can, where appropriate, order the defendant to modify it to render it compliant. It cannot punish a party that violates an FTA. If the defendant fails to adapt the measure, further proceedings may be initiated which may lead to compensation or suspension of benefits.
Yes, proceedings can be initiated at the WTO, provided that the disputed provisions in the FTA are consistent with those in the WTO Agreement. Switzerland's FTAs generally provide that a dispute can be settled in one forum or another at the free choice of the complaining party. The choice of one forum excludes the use of the other forum. However, if the provisions in question differ from those of the WTO Agreement, only the forum of the FTA is available.
Last modification 09.09.2020