India appeals on certain issues of law and legal interpretations developed in the Panel Report, India – Measures Concerning the Importation of Certain Agricultural Products (Panel Report). The Panel was established to consider a complaint by the United States with respect to measures taken by India concerning the importation of certain agricultural products.
This dispute concerns measures consisting of prohibitions that India imposes on the importation of various agricultural products, primarily poultry products, because of concerns related to avian influenza (AI).India maintains its AI measures through two legislations:-
• The Live-Stock Importation Act, as amended4 (Livestock Act), and
• Statutory Order 1663(E) (S.O. 1663(E))
India, on 26 January 2015, notified the Dispute Settlement Body, pursuant to Articles 16.4 and 17 of the DSU, of its intention to appeal on certain issues of law covered by the Panel Report and certain legal interpretations developed by the Panel and filed a Notice of Appeal.
Issues raised in Appeal:
1) Whether the Panel erred in its interpretation and application of Article 2.2
India raises claim of error that the Panel erred in interpreting and applying Article 2.2 of the SPS Agreement as it did not distinguish between Article 2.2 and Article 5.1 of the SPS Agreement as independent legal provisions setting out distinct obligations. India claims that, by equating Article 2.2 with Articles 5.1 and 5.2, the Panel has rendered Article 2.2 redundant. It also considers that a proper interpretation of Article 2.2 and Article 5.1 says that a Member can either base its SPS measure under Article 2.2 by directly establishing a link between the SPS measure and the scientific principles and sufficient scientific evidence, or, alternatively, a Member can follow the process under Article 5.1 by conducting a risk assessment and thus also comply with Article 2.2.
Further, it submits that, although the Panel correctly identified that an SPS measure that does not comply with Articles 5.1 and 5.2 is "presumed" to be inconsistent with Article 2.2, the Panel "incorrectly ignored that obligations under Article 2.2 … can also be independently fulfilled without resorting to Article 5.1".
India has based its "defense" under Article 2.2, and submits that the Panel should therefore have started its analysis with Article 2.2.3 Due to these errors, India requests to reverse the Panel's finding under Article 2.2 of the SPS Agreement
The United States argues and considers India's argument to be "a non sequitur", stressing that, before the Panel, it alleged that Article 2.2 was violated both as a consequence of the inconsistency of India's AI measures with Articles 5.1 and 5.2, and independently with respect to the requirements under Article 2.2. According to the United States, there is nothing in the text of Article 2.2, 5.1, or 5.2 that suggests that, when a party asserts that Article 2.2 has been violated consequentially as a result of violating Articles 5.1 and 5.2, and also for another independent reason, the "consequential claims" are somehow converted into "subsidiary claims" dependent for their success on the "independent claim".
However, there is nothing in the text of Article 2.2 that precludes multiple bases for breaching that obligation, and the fact that the United States also advanced an independent claim cannot change the fact that India's measures are inconsistent with Articles 5.1 and 5.2 and that, as a consequence, India breached Article 2.2. The United States also asserts that India's contention that the Panel improperly "conflated" Articles 2.2 and 5.1 "lacks any basis in the record or logic". The Appellate found that the Panel's analysis, the United States submits that the Panel did not render these provisions "redundant" but, instead, correctly recognized that Article 2.2 could be breached even in the absence of a breach of Articles 5.1 and 5.2.
1.1) Whether panel erred under Article 11 of the DSU
India also puts forth three claims of error under Article 11 of the DSU.
• First, India submits that the Panel failed to make an objective assessment of the matter by disregarding India's arguments and evidence that sought to establish that India's AI measures are based on scientific principles and are not maintained without sufficient scientific evidence, as required by Article 2.2.
• Second, India asserts that the Panel failed to make an objective assessment of the matter because it ruled on a claim that was not argued by the United States, insofar as the Panel's finding of inconsistency under Article 2.2 covered the import prohibitions upon occurrence of both HPNAI and LPNAI for India's AI measures. India clarifies that it is not arguing that the United States' claim under Article 2.2 is not within the Panel's terms of reference. Instead, India argues that merely impugning a measure in the panel request does not absolve the complaining party of presenting arguments and evidence with respect to that claim. India highlights that the United States made arguments and presented evidence only with respect to import restrictions against eggs and fresh meat of poultry on account of occurrence of LPNAI under Article 2.2, and that, therefore, the United States accepted that the import prohibitions against the other eight product categories, and against all relevant product categories upon occurrence of HPNAI, are "legitimate".
• Third, It asserts that the Panel failed to make an objective assessment of the matter in its analysis under Articles 5.1 and 5.2 because it did not address India's argument that, because its AI measures are based on scientific principles and are not maintained without scientific evidence, they meet the requirements of Article 2.2, and India is therefore under no obligation to conduct a separate risk assessment under Article 5.1 in the present case. On this basis, India requests us to reverse the Panel's findings under Articles 5.1 and 5.2.
The United States argues that
• First, India's claims under Article 11 of the DSU does not relate to the objectivity of the Panel's assessment of the matter, but, instead, go to the Panel's interpretation and application of Article 2.2. Recalling that claims under Article 11 and claims relating to errors in interpreting or applying provisions of the covered agreements are distinct and should not be pleaded in the alternative, the United States submits that India has erred in claiming a breach of Article 11 as it fails to explain how the evidence put forth by it is relevant, let alone so material as to call into question the objectivity of the Panel's analysis of whether India's measures are based on a risk assessment.
• Second claim under Article 11, the United States argues, inter alia, that, since the Panel found a breach of Article 2.2 as a result of the violation of Article 5.1, it did not need to address the United States' additional argument alleging an independent breach of Article 2.2 at all. Moreover, the United States' position has always been that India failed to base its AI measures on a risk assessment with respect to all products covered by the measure. Thus, the limitation on product scope under Article 2.2 that India asserts does not exist.
• Third, the United States submits that the Panel did, in its analysis under Articles 5.1 and 5.2 acknowledge India's argument that it was not required to conduct a risk assessment, and India has therefore presented no basis for a claim under Article 11.
On the basis of the above contentions raised by The Appellate Body agreed with the Panel that it’s finding that India's AI measures are inconsistent with Articles 5.1 and 5.2 because they are not based on a risk assessment, raised a presumption that those measures are also inconsistent with Article 2.2. However, the Appellate Body found that, by failing to consider whether such presumption had been rebutted by arguments and evidence presented by India to establish a scientific basis for its import prohibitions on fresh poultry meat and eggs from countries reporting low pathogenicity AI (LPNAI), the Panel erred in its application of Article 2.2. The Appellate Body thus reversed, in part, the Panel's findings that India's AI measures are inconsistent with Article 2.2 insofar as those findings concern India's import prohibitions on fresh poultry meat and eggs from countries reporting LPNAI. The Appellate Body was unable to complete the legal analysis under Article 2.2. The Appellate Body also upheld the Panel's findings that India's AI measures are inconsistent with Articles 5.1 and 5.2.
2) Whether the panel’s finding are inconsistent with Articles 3.1 and 3.2 of the SPS Agreement
India's appeal of the Panel's findings that India's AI measures are inconsistent with Article 3.1 of the SPS Agreement and that India is not entitled to benefit from the presumption of consistency of its AI measures with the other relevant provisions of the SPS Agreement and the GATT 1994, as provided for under Article 3.2 of the SPS Agreement. India claims that the Panel exceeded the permissible scope of consultation with the OIE as prescribed by Article 11.2 of the SPS Agreement and Article 13.2 of the DSU.
India requests reverse the Panel's findings under Articles 3.1 and 3.2 of the SPS Agreement, and to complete the legal analysis in respect of these provisions.
The Appellate body looked into the panel findings which considered that India's AI measures amounted to a departure from fundamentals and also was in contradiction to the OIE Code. In the process of analyzing this contradiction, the Panel found that India's AI measures are not "based on" the relevant international standard within the meaning of Article 3.1 of the SPS Agreement, and therefore inconsistent with that provision. Thus it also concluded that India's AI measures do not "conform to" the OIE Code within the meaning of Article 3.2 of the SPS Agreement. The Panel therefore found that India is not entitled to benefit from the presumption of consistency of its AI measures with the other relevant provisions of the SPS Agreement and the GATT 1994.
The appellate body found that the language used by the Panel created some ambiguity regarding its findings on the scope and meaning of the recommendations 4 of the OIE Code, and this had led to some misunderstanding. The appellate body then interpreted the use mainly basing upon two situation i.e. one possible reading of this language, the Panel could be understood to have addressed whether the OIE Code precludes OIE members from restricting or banning the importation of products in circumstances where there is no applicable recommendation under the OIE Code, or where the risk mitigation conditions prescribed in the applicable recommendation have not been met. India raises arguments on appeal that appear premised on this reading of the Panel's language regarding the OIE Code. Secondly, while using this language, the Panel could be understood to have addressed whether, in circumstances where the product-specific recommendations of the OIE Code apply, the OIE Code itself prescribes prohibitions on the importation of products. The appellate body was of view that the Panel's analysis is consistent with this latter understanding, which reflects the nature of the comparative assessment it performed in seeking to determine whether the import prohibitions imposed by India's AI measures could be said to be "based on" the OIE Code within the meaning of Article 3.1 of the SPS Agreement.
It was noted that Article 3.1 of the SPS Agreement establishes that Members shall base their
SPS measures on international standards, guidelines, or recommendations, where they exist.
As the Appellate Body recognized in EC –Sardines, the term "as a basis for" in Article 2.4 of the TBT Agreement is similar to the language used in Article 3.1 of the SPS Agreement.
Further it was noted that Article 3.2 provides that SPS measures that conform to international
Standards, guidelines, or recommendations shall be deemed to be necessary to protect human,
Animal or plant life or health, and presumed to be consistent with the relevant provisions of the
SPS Agreement and the GATT 1994. In addition, Article 3.3 identifies the circumstances in which Members may impose SPS measures resulting in a higher level of protection than would be achieved by measures based on the relevant international standards, guidelines, or
Recommendations.
2.1) whether the Panel erred under Article 11.2 of the SPS Agreement and Article 13.2
Of the DSU in its consultation with the OIE
By referring to appellate body’s decision in US-Shrimp decision the appellate body observed that the authority of a panel to consult with experts is, as a general matter, governed by Article 13 of the DSU, entitled "Right to Seek Information".414 Article 13.1 provides that a panel "shall have the right to seek information and technical advice from any individual or body which it deems appropriate". Article 13.2 additionally provides that a panel "may seek information from any relevant source and may consult experts to obtain their opinion on certain aspects of the matter".
Therefore, the Appellate Body concluded that the Panel did not, as India contended, act inconsistently with Article 11.2 of the SPS Agreement or Article 13.2 of the DSU in consulting with the OIE regarding the meaning of the OIE Terrestrial Code. After also rejecting claims raised by India under Article 11 of the DSU, the Appellate Body upheld the Panel's findings under Articles 3.1 and 3.2 that India's AI measures are neither “based on”, nor “conform to”, the relevant international standard (i.e., Chapter 10.4 of the OIE Terrestrial Code).