MJIEL Vol 1 Issue 2 2004 - A4


Abstract:

Of what importance is the international law principle of Pacta Sunt Servanda in the obligations arising from inter-State contracts? Is this a valid principle in the context of the World Trade Organization (WTO) dispute settlement system? If so, can good faith obligations stemming from the principle of Pacta Sunt Servanda be a valid ground for a complaint before the WTO panel and or Appellate Body? This paper aims at resolving these difficult questions. No straightforward answer can be found in the WTO jurisprudence. But, grappling with these questions may produce a number of ramifications (though there seem to be a general consensus that the WTO enters the system of international law, it has some characteristics that sufficiently distinguish it from other branches of international law e.g., the idea of situation complaint). While Pacta Sunt Servanda may be regarded as the first foundation of classical international law, its development into the WTO treaty system seems to have been slow, but represents a significant step towards the enhancement of the security and predictability objectives of the multilateral trading system.


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