Approval of the Rules of Procedure under the Olivos Protocol for the Settlement of Disputes in Mercosur

On July 12, 2004, the MERCOSUR/CMC/DEC Decision No 37/03 was published in the Official Gazette. This Decision contains the provisions of the “Rules of Procedure under the Olivos Protocol for the Resolution of Controversies in the Mercosur”.

The Olivos Protocol, ratified by Uruguay, Paraguay, Brazil and Argentina on February 18, 2002, establishes the applicable procedure for the settlement of disputes that may arise among the member states of Mercosur regarding the interpretation, application or breach of the Treaty of Asunción, the decisions of the Common Market Council, the resolutions of the Common Market Group and/or the guidelines of the Mercosur Commerce Commission.

The Rules provide that, in order to choose the system of settlement of disputes provided for in the Olivos Protocol, the member state shall initiate the process of direct negotiations with the other member state involved in the dispute. The Administrative Secretariat of Mercosur must inform the Common Market Group about the negotiations. If direct negotiations fail, the parties can request the constitution of an ad hoc Tribunal. This Tribunal will have jurisdiction to analyse the subject matter of the dispute, which shall be established by the applicant and the respondent’s briefs. The awards of the Tribunal are binding for the parties. Either of the parties can appeal the award of the Tribunal before the Permanent Revision Tribunal. The appeal is limited to cases where a question of law is involved or where there is a disagreement relating to the Tribunal’s interpretation of a legal provision. The awards of the Revision Tribunal may not be appealed and are binding on the states parties in the dispute.

Furthermore, the Rules set the procedure applicable for the request of advisory opinions by the Revision Tribunal. Advisory opinions must be based on the provisions of the Treaty of Asunción, the Ouro Preto Protocol, the protocols and agreements related to the Treaty of Asunción, the decisions of the Common Market Council, the resolutions of the Common Market Group and the guidelines of the Mercosur Commerce Commission, as well as on the applicable principles of international law. Advisory opinions are not binding and will only be used as guidelines.

The Rules also address the procedure that has to be followed by individuals or legal entities who wish to file a complaint against a member state for their acts or omissions that have a restrictive or discriminatory effect and result in a breach of the Treaty of Asunción, the Ouro Preto Protocol, the protocols and agreements related to the Treaty of Asunción, the decisions of the Common Market Council, the resolutions of the Common Market Group or the guidelines of the Mercosur Commerce Commission.

For further details on the procedure established by the Olivos Protocol, please see the article “Ratification of the Olivos Protocol for the Resolution of Controversies in the Mercosur”, published in Marval News # 11 of October 31, 2002.