Abstract

The article discusses potential jurisdiction conflicts of the newly created ACFTA and its possible resolution method, the Res Judicata principle. The article points out that jurisdiction conflicts have the possibility to break out in ACFTA based on theoretical analysis and case study in other similar RTAs (Regional Trade Agreements), such as NAFTA and MERCOSUR. According to the opinion of this article, principles of Forum non Conveniens, Lis Alibi Pendens, Lex Posterier and Lex Specialis, and Comity are not suitable for resolving the problem at the current stage. The article concludes that the Res Judicata doctrine is more suitable to settle potential jurisdiction conflicts in ACFTA. However, the Res Judicata principle is just able to partially resolve the potential jurisdiction conflicts of ACFTA even with help of the Asian legal culture. It will come across difficulty if jurisdiction conflicts are between ACFTA and the WTO. The article finally indicates that the full resolution of this matter requires the WTO to integrate the principle of Res Judicata into its DSU (Dispute Settlement Understanding) and to put more attention on the “operating” stage of RTAs, which needs support from the development of a uniform legal system for international trade.


I. Introduction

In 2010, the negotiation on economic co-operation between China and the Association of Southeast Asian Nations (“ASEAN”) came to an end. As a result, the ASEAN-China Free Trade Area (“ACFTA”) was established. The ACFTA covers eleven countries, mainly China and ten other ASEAN member states. The negotiation, formulation, and finally the establishment of the ACFTA have drawn the attention of legal academia. Among others, the dispute settlement mechanism of ACFTA is one of the key issues of academic research.

For a regional arrangement like ACFTA, where member states are concurrent members of other international organizations like ASEAN and the WTO, jurisdictions occasionally overlap and conflicts resulting from a multiplicity of memberships have always been a concern of academic research. The Mexico Soft Drink case1 between the World Trade Organization (“WTO”) and the North America Free Trade Area (“NAFTA”), the Argentina Poultry case between the WTO and Mercado Común del Sur, (Southern Common Market in English, “MERCOSUR”) and the Brazil Tyres case between the WTO and MERCOSUR, as discussed below, will explore jurisdictional conflicts between the WTO and the Regional Trade Agreements (“RTA’s”). Besides ACFTA and ASEAN, Brunei Darussalam, China, Indonesia, Malaysia, Philippine, Singapore, Thailand and Vietnam are also member states of the WTO. There are more complicated potential jurisdictional conflicts covering three regional and international arrangements in this region, namely the ACFTA, the ASEAN, and the WTO. As a result, there will be a conflict of jurisdictions if the disputants bring their claims under different jurisdictions.

The Agreement on Dispute Settlement Mechanism of the Framework Agreement on Comprehensive Economic Co-operation between China and ASEAN (“ACFTA DSM Agreement”) touches briefly on the possibility of overlapping jurisdictions. Article 2 of the ACFTA DSM Agreement stipulates the horizontal allocation of jurisdiction between the DSM of ACFTA and those under any other treaties. According to the Agreement, the DSM of the ACFTA does not require compulsory jurisdiction if another jurisdiction is available. However, the ACFTA’s DSM jurisdiction is exclusive once the dispute settlement proceeding is initiated under the DSM according to the disputant’s choice under the ACFTA DSM Agreement. The Agreement also brings the possibility for the coexistence of more than one DSM for a particular dispute if the parties consent. Similarly, the ASEAN framework also accommodates the possible co-existence of multiple dispute settlement fora among member states.

It appears that the ACFTA and ASEAN frameworks are adequate to deal with the issue of conflicting jurisdiction. However, problems arise when they overlap with the jurisdiction of the WTO. The Panels of the WTO usually use indirect stipulation, such as Article 11 Function of Panels, to clarify the matter of jurisdiction conflict. The WTO Panel would not concede their jurisdiction whether the case is undergoing proceedings or is adjudicated. Therefore, the absence of relevant regulations in the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”) may cause jurisdiction conflicts between the WTO and ACFTA in the future. This will be deduced through comparative analysis with other similar RTAs, such as NAFTA and MERCOSUR.

These problems will be illustrated through the utilization of cases and by conducting theoretical analysis in the following four sections. The first section discusses the issue of potential jurisdiction conflicts in ACFTA. The second section explains the non-applicability of four legal doctrines, namely Forum non Conveniens, Lis Alibi Pendens, Lex Posterier and Lex Specialis, and the Comity doctrine, which are often used to deal with jurisdiction conflicts. Subsequently, the third section points out that the principle of Res Judicata is more suitable in settling the jurisdiction conflicts of ACFTA based on its practice in the international community and its legal environment in East and Southeast Asia. The article tries to apply this principle in three distinguished stages, the initial, ongoing and afterward stages respectively. However, the Res Judicata principle is unable to be used to fully resolve the problem of jurisdiction conflicts; a further solution is needed to enhance the consummation of international legal systems, that is, a uniform legal system for international trade as discussed in the fifth section This research paper aims at providing a solution to potential jurisdiction conflicts involving ACFTA. This will be tremendously beneficial to the field if this solution proves viable.