Resolving Potential Jurisdiction Conflicts in ACFTA: The Principle of Res Judicata

AuthorYang Songling
YANG 335 (DO NOT DELETE) 2011-9-2 2:21 PM
YANG Songling*
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 RTA(Regional Trade Agreement)’s, 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.
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 case2
between the WTO and Mercado Común del Sur, (Southern Common
* JSD Candidate, City University of Hong Kong. Chinese practising lawyer.
1 Panel Report, Tax Measures on Soft Drinks and Other Beverages, WT/DS308/R (Oct. 7, 2005).
2 Panel Report, Argentina — Definitive Anti-Dumping Duties on Poultry from Brazil,
WT/DS241/R (Apr. 22, 2003).
YANG 335 (DO NOT DELETE) 2011-9-2 2:21 PM
Market in English, “MERCOSUR”) and the Brazil Tyres case3
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. 4 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.5 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.6 The Agreement also brings the possibility for the co-
existence of more than one DSM for a particular dispute if the parties
consent.7 Similarly, the ASEAN framework also accommodates the
possible co-existence of multiple dispute settlement fora among
member states.8
Panel Report, Brazil--Measures Affecting Imports of Retreaded Tyres, WT/DS332/R (Jun. 20,
WTO (July 23, 2008),
Agreement on Dispute Settlement Mechanism of the Framework Agreement on Comprehensive
Economic Co-operation, ASEAN-China, art. 2, para. 5, opened for signature Nov. 4, 2002, ASEAN.T.S
(entered into force Jan.1, 2005) (“Subject to paragraph 6, nothing in this Agreement shall prejudice any
right of the Parties to have recourse to dispute settlement procedures available under any other treaty to
which they are parties.”).
See id. art. 2, para. 6 (“Once dispute settlement proceedings have been initiated under this
Agreement or under any other treaty to which the parties to a dispute are parties concerning a particular
right or obligation of such parties arising under the Framework Agreement or that other treaty, the
forum selected by the complaining party shall be used to the exclusion of any other for such dispute.”).
See id. art. 2, para. 7 (“Paragraphs 5 and 6 above shall not apply where the parties to a dispute
expressly agree to the use of more than one dispute settlement forum in respect of that particular
Protocol on Enhanced Dispute Settlement Mechanism, Nov. 20, 1996, ASEAN.T.S [hereinafter
ASEAN Protocol] (“The provisions of this Protocol are without prejudice to the rights of Member
States to seek recourse to other fora for the settlement of disputes involving other Member States. A
Member State involved in a dispute can resort to other fora at any stage before a party has made a
YANG 335 (DO NOT DELETE) 2011-9-2 2:21 PM
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.9 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
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.
Since ACFTA is a relatively new free trade area, there is no
dispute arising under the DSM of ACFTA. Therefore, there is no
specific case that illustrates the problem of jurisdiction conflicts
under this specific context. However, it can be found that the
request to the Senior Economic Officials Meeting (“SEOM”) to establish a panel pursuant to paragraph
1 Article 5 of this Protocol.”).
See Undestanding on Rules and Procedures Governing the Settlement of Disputes, art. 11, Apr.
15,1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S.
401 [hereinafter DSU].

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