Лист за преговор: Adjudication Strategies in International Law

📋 Course Outline

1. Deep versus shallow integration and adjudication
2. Inquisitorial versus adversarial evidence production
3. Choice of law and judicial interpretation limits
4. International judges and conservative interpretation
5. Principal agent view of judges and incentives
6. Incomplete contracts and judicial role
7. Precedent, consistency, and de facto follow
8. DSU structure: panels, appellate review, adoption
9. WTO dispute settlement: compulsory adjudication and no self-help
10. DSU objectives: withdrawal, compensation, suspension
11. Property versus liability remedies in WTO
12. EU judicial procedure: chambers, grand chamber, urgency

📖 1. Deep versus shallow integration and adjudication

🔑 Key Concepts & Definitions

• Deep integration : Deep integration creates shared market rules by harmonizing competition conditions across jurisdictions.
• Shallow integration : Shallow integration keeps national policy autonomy while requiring non-discrimination across jurisdictions.
• Inquisitorial system : An inquisitorial system gives the judge authority to steer the case and actively produce or obtain evidence.
• Adversarial system : An adversarial system relies on parties to present evidence, with the judge mainly evaluating what the parties submit.
• Choice of law : Choice of law is the mechanism that determines which legal system governs a dispute.

📝 Essential Points

• Deep integration is linked to harmonized competition rules, while shallow integration allows separate national competition policies under non-discrimination commitments.
• The judge’s role differs because inquisitorial judges can generate evidence, whereas adversarial judges depend on evidence produced by parties.
• Inquisitorial adjudication fits a truth-seeking view when the judge is trusted and competent, since the judge can actively clarify the issues.
• Adversarial adjudication fits a system where parties control evidence and the judge is constrained to what is presented, making lawyer choice and rebuttal central.
• Choice of law can create externalities, so applying the same law to the same parties can matter for consistency of outcomes.
• A judge is bound by the contract between the parties, so contractual commitments limit how the judge applies governing law.

💡 Memory Hook

Deep = shared market rules; Shallow = separate rules + non-discrimination; Inquisitorial = judge hunts evidence; Adversarial = parties bring evidence.

📖 2. Inquisitorial versus adversarial evidence production

🔑 Key Concepts & Definitions

• Adverse selection : Adverse selection is a situation with asymmetric information where decision-makers cannot observe the true quality of appointees or parties before choosing them.
• Moral hazard : Moral hazard is a situation where, after a choice is made, the selected actor has incentives to behave in ways that are not aligned with the principal’s interests.
• Asymmetric information : Asymmetric information is an imbalance of knowledge where one side cannot observe what the other side knows or intends to do.
• Incomplete contract : An incomplete contract is an agreement that cannot specify all future contingencies, so later interpretation must fill gaps.
• Stare decisis : Stare decisis is the doctrine requiring courts to follow prior decisions to promote continuity and reduce unpredictability.

📝 Essential Points

• Adverse selection arises when principals cannot verify the qualities or intentions of those they appoint before appointment.
• Judicial life tenure can reduce adverse selection in appointment but can create signaling and persuasion incentives after appointment.
• Moral hazard is the opposite problem: once actors are selected, the principal cannot fully monitor truthful behavior or effort.
• Incomplete contracts cannot be fully completed by general principles alone, so interpretation and precedent become central to resolving gaps.
• Stare decisis has vertical and horizontal dimensions: lower courts are bound vertically, while horizontal deviation requires justification or distinguishing factors.
• Courts may gain credibility by following precedent, but the goal is continuity of legal reasoning rather than identical outcomes in every case.

💡 Memory Hook

Adverse selection = before choosing; moral hazard = after choosing.

📖 3. Choice of law and judicial interpretation limits

🔑 Key Concepts & Definitions

• Precedent without stare decisis : A legal approach where courts follow earlier decisions for guidance while not treating them as binding under stare decisis.
• Institutional balance : A governance principle requiring courts to respect their assigned role so adjudication does not replace legislation and legislation does not replace adjudication.
• In dubio mitius : An interpretation presumption that favors the less burdensome meaning when treaty wording allows more than one plausible reading.
• Vienna Convention on the Law of Treaties : A treaty-interpretation framework that sets interpretive methods and interpretive presumptions for international agreements.
• Effet utile : A purposive interpretive idea that seeks to give treaty terms practical effect rather than reading them in a way that empties their meaning.

📝 Essential Points

• EU and WTO courts both use precedent, but they do so without stare decisis binding effect.
• Courts gain credibility when they promote continuity rather than random shifts in reasoning across cases.
• Institutional balance limits judicial overreach: judges should not legislate and legislators should not act as judges.
• WTO dispute settlement relies on active consent of litigating parties, which can change incentives compared with other jurisdictions.
• Risk of institutional imbalance arises when courts become overly activist or “trigger-happy,” producing too much discretion.
• In dubio mitius is treated as a mitigation tool, but it may be insufficient as a general “insurance policy” for all interpretive uncertainty.

💡 Memory Hook

Continuity over randomness; balance over activism; mitius = less burdensome; VCLT = interpretive “rules of the road”.

📖 4. International judges and conservative interpretation

🔑 Key Concepts & Definitions

• Judicial independence : Judicial independence is the requirement that adjudicators decide without being controlled by the parties or the appointing authority.
• Moral hazard : Moral hazard is a situation where a party’s incentives change after a protection or delegation arrangement, so actions may not align with the principal’s interests.
• Asymmetric information : Asymmetric information is a knowledge imbalance where one side cannot fully observe the other side’s actions or the decision process, creating a “black box” problem.
• GATT two-step procedure : The GATT two-step procedure is the early dispute method that starts with state-to-state consultations and can move to higher-level decision-making if unresolved.
• DSU negative consensus : Negative consensus is the DSU mechanism that prevents the respondent from blocking panel establishment once the required conditions are met.

📝 Essential Points

• Judge selection faces incentive and independence problems because appointing and decision rules can expose parties to moral hazard and strategic behavior.
• There is no perfect solution to judge independence because information about judges’ terms and decision processes is incomplete and can be hard to verify.
• In GATT, disputes begin with bilateral consultations where the respondent must accept the request to proceed.
• If consultations fail under GATT, the complainant can refer the matter to the CONTRACTING PARTIES, whose decisions are taken by consensus.
• Under GATT, consensus also functions as a legitimacy device, but the losing respondent can deny the legal value or force of the issued report.
• GATT’s consensus-based competence means the respondent can block outcomes more easily than in the ICJ, where consent dynamics differ.

💡 Memory Hook

Consensus is the “lock”: it legitimizes GATT outcomes but also lets the respondent keep the door shut.

📖 5. Principal agent view of judges and incentives

🔑 Key Concepts & Definitions

• Principal agent theory : A theory where a principal delegates tasks to an agent whose incentives may diverge from the principal’s goals.
• Judicial scope constraint : A constraint that limits what a judge may decide to the matters framed by the parties’ submissions.
• Exclusive forum WTO : A dispute forum rule requiring WTO trade disputes to be brought only before WTO bodies, not other international courts.
• Two-instance adjudication : A WTO dispute settlement structure where first-instance panels can be followed by an appeal to the Appellate Body.
• Property rules : A remedy logic that aims to restore the status quo ante rather than pay damages as the main outcome.

📝 Essential Points

• WTO dispute settlement is designed so the respondent cannot obstruct justice, enabling panel implementation on a trial basis since 1989.
• WTO disputes must be submitted only to the WTO, creating an exclusive forum for trade disputes rather than recourse to the ICJ.
• Adjudication proceeds in two instances: panels as first instance and the Appellate Body as the appeal stage.
• Appeal requires paying lawyers again, which can disadvantage parties with fewer resources even if many disputes are relatively affordable.
• The DSU objectives prioritize a mutually acceptable solution consistent with covered agreements, then withdrawal of measures, then compensation only if withdrawal is impracticable, and suspension as a last resort.
• Property rules focus on restoring the pre-illegality situation (status quo-ante), which can be difficult when restoration is not feasible in practice.

💡 Memory Hook

Scope is like a courtroom “frame”: parties set the picture, judges can draw inside it but cannot repaint outside it.

📖 6. Incomplete contracts and judicial role

🔑 Key Concepts & Definitions

• DSU panel selection : A DSU mechanism for forming WTO dispute settlement panels through proposed candidates and final appointment by the Secretariat.
• Secretariat proposed panelists : A Secretariat practice where it proposes panelists (roster or non-roster) based on criteria provided by the parties.
• Compelling reasons rejection : A DSU standard allowing parties to reject proposed panelists only when they have compelling reasons.
• No nationals of disputing parties : A DSU constraint that normally prevents appointing panelists who are nationals of either disputing party unless the parties agree otherwise.
• Ad hoc WTO adjudication : A WTO adjudication model where adjudicators are appointed for a specific dispute rather than holding permanent office.

📝 Essential Points

• Panels are normally composed of 3 members unless the parties prefer 5 under the DSU.
• If parties cannot agree after 20 days, the complaining party may request the Secretariat to appoint the missing panelists.
• The Secretariat decides the appointment after receiving the parties’ (open-ended) criteria for selection.
• If parties reject one or more proposed panelists, the Director-General can decide on the remaining appointment(s) upon request by a party(-ies).
• The Director-General nominates after consulting the Chair of the DSB.
• Panelists are chosen from a roster of potential panelists, but in practice the Secretariat may appoint non-roster panelists.

💡 Memory Hook

Secretariat fills the gaps: parties propose, parties can block only with compelling reasons, then the Secretariat (and DG) appoints.

📖 7. Precedent, consistency, and de facto follow

🔑 Key Concepts & Definitions

• Public international order : A concept of a general public international legal order that would guide all interpretation, which is treated as largely absent in the discussed approach except for very narrow jus cogens norms.
• Choice of law : The selection of which legal rules a decision-maker applies to a dispute, which can be restricted by limiting the judge’s mandate.
• Interpretation of treaties : The process of deriving meaning from a treaty’s text, object, purpose, and related PIL rules, which can remain relatively open even when choice of law is restricted.
• Issue of law : A dispute about the meaning or legal effect of rules, such as interpreting treaty provisions and identifying legislative intent behind specific wording.
• Issue of fact : A dispute about factual circumstances, such as whether a party conducted an investigation, which must be proven through evidence.

📝 Essential Points

• In most European domestic systems, there is no single statutory provision listing sources of law, leaving judges freedom to move within the law under their mandate.
• In international law, there is no broad public international order to rely on, so a judge should not apply rules the parties did not mandate him to judge.
• Restricting the judge’s mandate limits both the choice of law and, to some extent, interpretation, but interpretation can still range over treaty text, object, purpose, and relevant PIL rules.
• Domestic law is treated as a fact rather than as a source of law in this framework, creating a sharp distinction between legal interpretation and factual proof.
• The open part is interpretation rather than choice of law: the judge may interpret within the restricted set of applicable rules.
• Issue of law examples include interpreting specific treaty articles (e.g., taxation coverage) and inferring legislative intent from the provision’s legal canon and context.

💡 Memory Hook

Mandate limits choice; interpretation still roams (text→object→purpose).

📖 8. DSU structure: panels, appellate review, adoption

🔑 Key Concepts & Definitions

• Panel recommendations : Panel recommendations are non-binding suggestions on how a respondent could comply with WTO obligations.
• Compliance panel : A compliance panel is the DSU body that examines whether the respondent has implemented the recommendations and rulings within the compliance period.
• Appellate Body review : Appellate review is the DSU mechanism that can correct legal errors in panel reports through the Appellate Body.
• Adoption by the DSB : Adoption is the step where the Dispute Settlement Body (DSB) formally accepts a panel or Appellate Body report.
• Countermeasures in DSU : Countermeasures are WTO-authorized retaliatory actions used when a respondent does not comply within the required period.

📝 Essential Points

• Panels may suggest ways to comply, but in practice suggestions are rarely issued.
• Case law treats panel suggestions as non-binding, so disagreements about compliance can still arise.
• If compliance is disputed, the process can restart with a new panel after the compliance period.
• If there is no implementation, the complainant can draw up a list of countermeasures.
• An arbitrator sets the permissible level of retaliation, and the level cannot exceed the amount requested.
• The DSB reviews implementation during the post-retaliation period and the respondent may request withdrawal of countermeasures; if the complainant disagrees, a panel is possible.

💡 Memory Hook

Compliance dispute → new panel; non-compliance → countermeasures capped by arbitrator; DSB adopts/reviews.

📖 9. WTO dispute settlement: compulsory adjudication and no self-help

🔑 Key Concepts & Definitions

• Compulsory adjudication : A dispute-settlement model where parties must accept an adjudicatory decision rather than relying on unilateral action.
• No self-help : A principle requiring states not to use unilateral measures to resolve a trade dispute while the formal settlement process is available.
• Government adjudication discretion : A situation where granting adjudicatory authority to governments shifts the focus toward national welfare rather than private welfare.
• Countermeasures : Trade-restricting responses used in disputes, typically linked to the outcome of the dispute-settlement system rather than unilateral retaliation.
• Private actors vs states litigation : A contrast between systems where private parties can litigate alongside states and systems where litigation is limited to states.

📝 Essential Points

• WTO-style adjudication aims to replace unilateral retaliation with a rules-based decision process for resolving disputes.
• If adjudication is assigned to governments, the adjudicators may prioritize national welfare over private welfare considerations.
• Self-help is discouraged because unilateral action can undermine a common rules-based trading environment.
• Countermeasures are presented as a response in disputes, but the logic is tied to the dispute-settlement framework rather than pure self-help.
• The source contrasts systems by noting that, unlike the WTO, the EU allows both private parties and states to litigate before EU courts.

💡 Memory Hook

Think “WTO = court, not retaliation”: compulsory adjudication replaces self-help; governments decide, so private welfare may be sidelined.

📖 10. DSU objectives: withdrawal, compensation, suspension

🔑 Key Concepts & Definitions

• Withdrawal of unlawful act : A remedy that removes an EU measure from effect when it is unlawful.
• Compensation for damage : A remedy that grants monetary reparation when unlawful EU conduct causes compensable harm.
• Suspension of operation : A remedy that temporarily stops an EU measure from producing effects while the legality is assessed.
• Interim measures : Procedural tools that can provide urgent protection before the final judgment in EU litigation.

📝 Essential Points

• Withdrawal aims to eliminate the legal effects of the unlawful EU measure for the future.
• Compensation targets financial loss caused by unlawful EU action, linking liability to damage.
• Suspension provides temporary relief so that rights are not irreversibly harmed during the proceedings.
• Interim measures are used for urgency and can be requested before the final decision.
• The choice between withdrawal, compensation, and suspension depends on whether the problem is ongoing effects, irreparable harm, or past damage.

💡 Memory Hook

Think “WCS”: Withdrawal removes effects, Compensation pays for harm, Suspension pauses the measure.

📖 11. Property versus liability remedies in WTO

🔑 Key Concepts & Definitions

• WTO law as benchmark : WTO law is generally not used as the yardstick for judging the legality of EU law, except in narrowly defined situations.
• Exceptional circumstances : Exceptional circumstances are the limited cases where WTO rules can be used to assess legality of EU measures.
• EU intent to implement WTO : EU intent to implement WTO law is a requirement that must be shown before WTO provisions can be treated as relevant for legality review.
• Explicit reference to WTO provisions : Explicit reference to WTO provisions is a condition where EU law clearly cites specific WTO rules, supporting WTO relevance in review.
• Rusal Armenal criteria : Rusal Armenal refers to the two-part approach requiring both explicit WTO reference and proof of EU intent to implement WTO law.

📝 Essential Points

• WTO law is not the general benchmark for evaluating legality of EU law, so WTO arguments usually fail unless the exceptional test is met.
• The exceptional test requires (1) an explicit reference to WTO provisions in the EU measure and (2) evidence of EU intent to implement WTO rules.
• If both Rusal Armenal conditions are not satisfied, the EU measure is not assessed for legality by reference to WTO law.
• The EU position is that, even after signing WTO agreements, it is for the EU to interpret WTO rules rather than defer to WTO interpretations.
• The source highlights that the court has not produced a clear example where the two Rusal Armenal criteria were found satisfied.

💡 Memory Hook

Rusal Armenal = “Name + Intent”: WTO relevance needs explicit WTO citation and proof the EU meant to implement WTO.

📖 12. EU judicial procedure: chambers, grand chamber, urgency

🔑 Key Concepts & Definitions

• Chambers of the CJEU : A CJEU formation that hears many cases and delivers judgments without the full court sitting.
• Grand Chamber of the CJEU : A larger CJEU formation used for selected cases, typically when the matter warrants heightened attention.
• Urgency procedure : A procedural track that accelerates the handling of a case when time-sensitive harm is at stake.
• Supervisory role of the Court : A function where the CJEU oversees the legality of EU action while leaving key choices to the litigating parties.
• Parties decide the quantum and quality : A litigation principle where the parties control what they claim and how they frame the factual and legal basis.

📝 Essential Points

• Litigating parties control the substance of their case, while the Court’s role is to supervise legality rather than to run the dispute for them.
• The Court can be asked to review how evidence is handled, but it does not replace the parties’ evidentiary work.
• Urgency is relevant when waiting for a full judgment would likely cause serious harm to the parties.
• Chambers are the default CJEU formation for many matters, while the Grand Chamber is reserved for cases that justify a higher level of scrutiny.
• The procedural choice (chambers vs Grand Chamber vs urgency) affects how quickly and intensely the Court will address the dispute.

💡 Memory Hook

Chambers = “default speed”, Grand Chamber = “big scrutiny”, urgency = “time-critical harm”.

📊 Synthesis Tables

Inquisitorial vs adversarial adjudication

Aspect	Inquisitorial	Adversarial
Evidence production	Judge has power to produce evidence and guide the process	Parties present evidence; judge mainly evaluates what parties submit
Judge role	Judge can actively clarify issues and steer the case	Judge is constrained to what parties submit; rebuttal is central
Truth-seeking fit	Better if we care about truth and trust a competent judge	Better if parties control evidence and choose lawyers/judge

WTO DSU remedies logic (property vs liability)

Remedy type	Core idea	When it matters
Property rules	Restore status quo ante	Often difficult to restore in practice; focuses on pre-illegality situation
Liability rules	Pay damages/compensation based on quantified harm	Used when restoration is not feasible; requires counterfactual damage quantification
DSU objective sequence	Withdrawal first; compensation only if withdrawal impracticable; suspension last resort	Implements the DSU objectives in order

⚠️ Common Pitfalls & Confusions

1. Confusing deep vs shallow integration: deep harmonizes competition conditions across jurisdictions, while shallow keeps national autonomy but adds non-discrimination commitments.
2. Mixing up inquisitorial and adversarial evidence: in inquisitorial systems the judge can produce evidence and steer issues, while in adversarial systems parties control evidence and rebuttal.
3. Thinking choice of law is always free: choice of law can be restricted by limiting the judge’s mandate, and the judge is bound by the contract between the parties.
4. Believing precedent guarantees identical outcomes: precedent is about continuity of legal reasoning, and courts must explain why they deviate rather than follow blindly.
5. Treating WTO adjudication as “self-help” or as optional retaliation: WTO-style adjudication replaces unilateral retaliation with compulsory adjudication and countermeasures tied to the system.
6. Assuming WTO law is the general benchmark for EU legality: WTO arguments usually fail unless the exceptional Rusal Armenal conditions (explicit reference + EU intent) are met.
7. Confusing EU and WTO institutional balance: EU courts are constrained by institutional balance and mandate/scope, while WTO competence and legitimacy rely on consensus/negative consensus dynamics.

✅ Exam Checklist

1. Define deep integration and shallow integration and explain how each affects competition policy autonomy and non-discrimination.
2. Contrast inquisitorial and adversarial adjudication by stating who produces evidence, who steers the case, and how truth-seeking assumptions differ.
3. Explain how choice of law can create externalities and why applying the same law to the same parties can matter for consistency of outcomes.
4. State why the judge is bound by the contract between the parties and how that limits the judge’s application of governing law.
5. Define adverse selection and moral hazard in the principal-agent framing of judge selection, and link each to “before” vs “after” appointment.
6. Explain how incomplete contracts make interpretation and precedent central, and why general principles alone cannot fully complete gaps.
7. Describe stare decisis vs de facto precedent in the course’s account, including vertical vs horizontal dimensions and the need to justify deviations.
8. Apply institutional balance: explain why courts should not legislate and legislators should not act as judges, and connect this to activism/trigger-happy risk.
9. Summarize the principal-agent problems for international judges (asymmetric information, non-observability) and why there is no perfect solution to judicial independence.
10. Explain the GATT two-step procedure (bilateral consultations then CONTRACTING PARTIES consensus) and how consensus can both legitimize outcomes and allow blocking legal value.
11. Describe DSU structure in order: panels, possible Appellate Body review, adoption by the DSB, compliance panels, and the countermeasures/arbitrator cap logic.
12. State DSU objectives in sequence (mutually acceptable solution; withdrawal first; compensation only if withdrawal impracticable; suspension last resort) and connect them to property vs liability remedies.
13. Explain why WTO adjudication is compulsory and “no self-help,” and how decentralized enforcement and negative consensus operate.
14. For DSU panel selection, state the default panel size, the 20-day disagreement trigger, the Secretariat’s role, compelling reasons rejection, and the DG nomination after consulting the DSB Chair (as described).