On September 30, 2003, the European Court of Justice (ECJ) contemplated the possibility of holding the European Community liable for the non-implementation of World Trade Organization (WTO) Dispute Settlement Body (DSB) decisions. The implications of the ECJ’s reasoning in these judgments could be revolutionary not only for the EC legal order, but also for the legal systems of all WTO members. To date, no court of a WTO member state has recognized a private party’s right to rely on DSB rulings to initiate a claim of liability against a member state. Since WTO rules lack direct effect, member states typically prevent private parties from invoking DSB rulings before domestic courts. Hence private business operators are barred from recovering the damages suffered from non-compliance with DSB rulings.
The case at hand arose when a French meat trading company, Biret International, and its holding company, Etablissement Biret et Cie SA, filed actions before the Court of First Instance (CFI) of the European Communities seeking compensation for damages allegedly suffered as a result of the adoption and continuing enforcement of an EC ban on hormone-treated beef. The ban had already been condemned by the WTO in the well-known Beef Hormones cases. Biret, relying on WTO rulings in the Beef Hormones cases, asked the court to hold the European Community liable for failing to implement the decision within the prescribed period of time. In line with the ECJ’s longstanding tradition of denying the direct effect of General Agreement on Tariffs and Trade (GATT) and WTO law, the CFI rejected the claim on the ground that neither WTO agreements nor rulings could create rights for private individuals. In an appeal of this judgment, the ECJ dismissed the action on factual grounds, but did not rule that the plaintiff’s claim was unfounded. In this way, the ECJ left open the possibility that a WTO dispute settlement ruling could provide grounds for imposing liability on the European Community.
The objective of this Recent Development is to provide the reader with an analysis of the Biret judgments and their possible legal implications. Part I provides the necessary framework to understand the legal context underlying the Biret judgments. The Part briefly discusses the direct effect of WTO law, the functioning of the WTO dispute settlement system, the (non-) role of private parties, and the historical background of the Beef Hormones cases. Part II examines the Biret judgments by the CFI and the ECJ, and also the opinion of Advocate General Alber. Part III focuses on the legal implications of the Biret cases and their potential impact on the EC legal order and on other WTO member countries.