Common use of Compensation and the Suspension of Concessions Clause in Contracts

Compensation and the Suspension of Concessions. 1. Compensation and the suspension of concessions or other obligations under this Agreement are temporary measures available in the event that the award is not implemented within a reasonable period of time. However, neither compensation nor the suspension of concessions or other obligations under this Agreement is preferred to full implementation of the award to bring a measure into conformity with this Agreement. Compensation, if granted, shall be consistent with this Agreement. 2. The application of concessions or other obligations under this Agreement shall not be suspended before the commencement and during the course of the proceedings under paragraphs 3 and 4 of Article 71. 3. The suspension of the application of concessions or other obligations under paragraphs 3 and 4 of Article 71 may only be implemented after the complaining party notifies the party complained against and the rest of the Parties that the complaining party intends to suspend the application to the party complained against of concessions or other obligations under this Agreement. The party complained against and the rest of the Parties shall be informed of the commencement of the suspension and which concessions or other obligations under this Agreement would be suspended. 4. In considering what concessions or other obligations under this Agreement to be suspended under paragraphs 3 and 4 of Article 71, such suspension shall: (a) be temporary, and be discontinued when the parties to the dispute reach a mutually satisfactory resolution or where compliance with the award is effected; (b) be restricted to the same level of nullification or impairment that is attributable to the failure to comply with the award; and (c) be restricted to the same sector or sectors as those in which the arbitral tribunal has found the nullification or impairment, unless it is not practicable or effective to suspend the application of concessions or obligations in such sector or sectors, in which case, the complaining party may suspend concessions or benefits in other sectors under this Agreement. 5. If the party complained against considers that the suspension of concessions or other obligations under this Agreement by the complaining party is inconsistent with the provisions of paragraph 4, the matter shall be referred to an arbitral tribunal. For the purposes of the arbitral tribunal established under this Article, paragraph 5 of Article 71 shall apply, mutatis mutandis. 6. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under this Article shall issue its award within sixty (60) days after the date when the matter is referred to it. Such award shall be binding on all the parties to the dispute.

Compensation and the Suspension of Concessions. 1. Compensation and the suspension of concessions or other obligations under this Agreement are temporary measures available in the event that the award is not implemented within a reasonable period of time. However, neither compensation nor the suspension of concessions or other obligations under this Agreement is preferred to full implementation of the award to bring a measure into conformity with this Agreement. Compensation, if granted, shall be consistent with this Agreement. 2. The application of concessions or other obligations under this Agreement shall not be suspended before the commencement and during the course of the proceedings under paragraphs 3 and 4 of Article 71. 3. The suspension of the application of concessions or other obligations under paragraphs 3 and 4 of Article 71 may only be implemented after the complaining party notifies the party complained against and the rest of the Parties that the complaining party intends to suspend the application to the party complained against of concessions or other obligations under this Agreement. The party complained against and the rest of the Parties shall be informed of the commencement of the suspension and which concessions or other obligations under this Agreement would be suspended. 4. In considering what concessions or other obligations under this Agreement to be suspended under paragraphs 3 and 4 of Article 71, such suspension shall: (a) : be temporary, and be discontinued when the parties to the dispute reach a mutually satisfactory resolution or where compliance with the award is effected; (b) ; be restricted to the same level of nullification or impairment that is attributable to the failure to comply with the award; and (c) and be restricted to the same sector or sectors as those in which the arbitral tribunal has found the nullification or impairment, unless it is not practicable or effective to suspend the application of concessions or obligations in such sector or sectors, in which case, the complaining party may suspend concessions or benefits in other sectors under this Agreement. 5. If the party complained against considers that the suspension of concessions or other obligations under this Agreement by the complaining party is inconsistent with the provisions of paragraph 4, the matter shall be referred to an arbitral tribunal. For the purposes of the arbitral tribunal established under this Article, paragraph 5 of Article 71 shall apply, mutatis mutandis. 6. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under this Article shall issue its award within sixty (60) days after the date when the matter is referred to it. Such award shall be binding on all the parties to the dispute.

Compensation and the Suspension of Concessions. or any other Obligations 1. It is the duty of the State Parties to fully implement the recommendations and rulings of the DSB. Compensation and the suspension of concessions or other obligations under this Agreement are temporary measures available to the aggrieved Party in the event that the award is accepted recommendations and rulings of the DSB are not implemented within a reasonable period of time. However, Provided that neither compensation nor the suspension of concessions or other obligations under this Agreement is preferred to full implementation of the award to bring a measure into conformity with this Agreementaccepted recommendations. CompensationHowever, compensation is voluntary and, if granted, shall be consistent with this the Agreement. 2. The suspension of concessions or other obligations shall be temporary and shall only be applied in as far as it is consistent with this Agreement and shall subsist until such a time as the inconsistency with the Agreement, or any other determined breach is removed, or that the State Party implements recommendations, or provides a solution to the injury caused, or occasioned by the non-compliance, or that a mutual satisfactory solution is reached. 3. In the event that the rulings and recommendations of the DSB are not implemented within a reasonable period of time, the aggrieved Party may request the DSB to impose temporary measures which include compensation and the suspension of concessions. 4. If the State Party concerned fails to bring the measure found to be inconsistent with the Agreement into compliance therewith or otherwise comply with the decisions and rulings within the reasonable period of time determined pursuant to Paragraph 3 of Article 24 of this Protocol, such State Party shall, if so requested, enter into negotiations with a Complaining Party, with a view to developing mutually acceptable compensation. If no satisfactory compensation has been agreed upon within twenty (20) days, a Complaining Party may request authorisation from the DSB to suspend the application to the State Party concerned of concessions or other obligations under this Agreement shall not be suspended before the commencement and during the course of the proceedings under paragraphs 3 and 4 of Article 71Agreement. 3. The suspension of the application of concessions or other obligations under paragraphs 3 and 4 of Article 71 may only be implemented after the complaining party notifies the party complained against and the rest of the Parties that the complaining party intends to suspend the application to the party complained against of concessions or other obligations under this Agreement. The party complained against and the rest of the Parties shall be informed of the commencement of the suspension and which concessions or other obligations under this Agreement would be suspended. 45. In considering what concessions or other obligations under this Agreement to be suspended under paragraphs 3 suspend, the Complaining Party shall apply the following principles and 4 of Article 71, such suspension shallprocedures: (a) be temporary, and be discontinued when the parties general principle is that the Complaining Party should first seek to suspend concessions or other obligations with respect to the dispute reach same sector(s) as that in which the Panel or AB has found a mutually satisfactory resolution violation or where compliance with the award is effectedother nullification or impairment; (b) be restricted to the same level of nullification or impairment if that is attributable to the failure to comply with the award; and (c) be restricted to the same sector or sectors as those in which the arbitral tribunal has found the nullification or impairment, unless Party considers that it is not practicable or effective to suspend the application of concessions or other obligations in such sector or sectorswith respect to the same sector(s), in which case, the complaining party it may seek to suspend concessions or benefits other obligations in other sectors under the Agreement; (c) if that Party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under this agreement, and that the circumstances are serious enough, it may seek to suspend concessions or other obligations under the Agreement; and (d) if that Party to a dispute decides to request authorisation to suspend concessions or other obligations pursuant to subparagraphs (b) or (c), it shall state the reasons thereof in its request to the DSB. 56. If In applying the above principles that party complained against considers shall take into account: (a) the trade in the sector under which the Panel or Appellate Body has found a violation or other nullification or impairment, and the importance of such trade to that party; and (b) the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension of concessions or other obligations. 7. The level of the suspension of concessions or other obligations under this Agreement authorised by the DSB shall be equivalent to the level of the nullification or impairment. 8. When the situation described in paragraph 4 of this Article occurs, the DSB, shall grant authorisation to suspend concessions or other obligations within thirty (30) days from the date of request unless the DSB decides by consensus to reject the request. However, if the State Party concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 5 have not been followed where a complaining party is inconsistent with the provisions has requested authorisation to suspend concessions or other obligations pursuant to paragraph 5(b) or (c) of paragraph 4this Article, the matter shall be referred to arbitration. Such arbitration shall be carried out by the original Panel, if Panellists are available, or by an arbitral tribunal. For arbitrator appointed by the purposes chairperson of the arbitral tribunal established under this Article, paragraph 5 of Article 71 DSB and shall apply, mutatis mutandis. 6. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under this Article shall issue its award be completed within sixty (60) days after from the date when of appointment of the arbitrator. Concessions or other obligations shall not be suspended during the course of the arbitration. 9. The arbitrator acting pursuant to paragraph 7 of this Article, shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. The arbitrator may also determine if the proposed suspension of concessions or other obligations is allowed under the Agreement. However, if the matter is referred to itarbitration includes a claim that the principles and procedures set forth in paragraph 3 of this Article, have not been followed, the arbitrator shall examine that claim. Such award In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 5 of this Article. The Parties to a dispute shall accept the arbitrator's decision as final and the parties concerned shall not seek a second arbitration. The DSB shall be binding on all informed promptly of the parties decision of the arbitrator and shall upon request, grant authorisation to suspend concessions or other obligations where the disputerequest is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request.

Compensation and the Suspension of Concessions. 1. Compensation and the suspension of concessions or other obligations under this Agreement are temporary measures available in the event that the award is recommendations and rulings are not implemented within a reasonable period of time. However, neither compensation nor the suspension of concessions or other obligations under this Agreement is preferred to full implementation of the award a recommendation to bring a measure into conformity with this Agreementthe covered agreements. CompensationCompensation is voluntary and, if granted, shall be consistent with this Agreementthe covered agreements. 2. The If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance therewith or otherwise comply with the recommendations and rulings within the reasonable period of time determined pursuant to paragraph 3 of Article 21, such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation. If no satisfactory compensation has been agreed within 20 days after the date of expiry of the reasonable period of time, any party having invoked the dispute settlement procedures may request authorization from the DSB to suspend the application to the Member concerned of concessions or other obligations under this Agreement shall not be suspended before the commencement and during the course of the proceedings under paragraphs 3 and 4 of Article 71covered agreements. 3. The suspension of the application of concessions or other obligations under paragraphs 3 and 4 of Article 71 may only be implemented after the complaining party notifies the party complained against and the rest of the Parties that the complaining party intends to suspend the application to the party complained against of concessions or other obligations under this Agreement. The party complained against and the rest of the Parties shall be informed of the commencement of the suspension and which concessions or other obligations under this Agreement would be suspended. 4. In considering what concessions or other obligations under this Agreement to be suspended under paragraphs 3 suspend, the complaining party shall apply the following principles and 4 of Article 71, such suspension shallprocedures: (a) be temporary, and be discontinued when the parties general principle is that the complaining party should first seek to suspend concessions or other obligations with respect to the dispute reach same sector(s) as that in which the panel or Appellate Body has found a mutually satisfactory resolution violation or where compliance with the award is effectedother nullification or impairment; (b) be restricted to the same level of nullification or impairment if that is attributable to the failure to comply with the award; and (c) be restricted to the same sector or sectors as those in which the arbitral tribunal has found the nullification or impairment, unless party considers that it is not practicable or effective to suspend the application of concessions or other obligations in such sector or sectorswith respect to the same sector(s), in which case, the complaining party it may seek to suspend concessions or benefits other obligations in other sectors under the same agreement; (c) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under the same agreement, and that the circumstances are serious enough, it may seek to suspend concessions or other obligations under another covered agreement; (d) in applying the above principles, that party shall take into account: (i) the trade in the sector or under the agreement under which the panel or Appellate Body has found a violation or other nullification or impairment, and the importance of such trade to that party; (ii) the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension of concessions or other obligations; (e) if that party decides to request authorization to suspend concessions or other obligations pursuant to subparagraphs (b) or (c), it shall state the reasons therefor in its request. At the same time as the request is forwarded to the DSB, it also shall be forwarded to the relevant Councils and also, in the case of a request pursuant to subparagraph (b), the relevant sectoral bodies; (f) for purposes of this paragraph, "sector" means: (i) with respect to goods, all goods; (ii) with respect to services, a principal sector as identified in the current "Services Sectoral Classification List" which identifies such sectors;28 (iii) with respect to trade-related intellectual property rights, each of the categories of intellectual property rights covered in Section 1, or Section 2, or Section 3, or Section 4, or Section 5, or Section 6, or Section 7 of Part II, or the obligations under Part III, or Part IV of the Agreement on TRIPS; (g) for purposes of this paragraph, "agreement" means: (i) with respect to goods, the agreements listed in Annex 1A of the WTO Agreement, taken as a whole as well as the Plurilateral Trade Agreements in so far as the relevant parties to the dispute are parties to these agreements; (ii) with respect to services, the GATS; (iii) with respect to intellectual property rights, the Agreement on TRIPS. 54. If the party complained against considers that The level of the suspension of concessions or other obligations under this Agreement authorized by the DSB shall be equivalent to the level of the nullification or impairment. 5. The DSB shall not authorize suspension of concessions or other obligations if a covered agreement prohibits such suspension. 6. When the situation described in paragraph 2 occurs, the DSB, upon request, shall grant authorization to suspend concessions or other obligations within 30 days of the expiry of the reasonable period of time unless the DSB decides by consensus to reject the request. However, if the Member concerned objects to the level of suspension proposed, or claims that the principles and procedures set forth in paragraph 3 have not been followed where a complaining party is inconsistent with the provisions of has requested 28 The list in document MTN.GNS/W/120 identifies eleven sectors. authorization to suspend concessions or other obligations pursuant to paragraph 43(b) or (c), the matter shall be referred to arbitration. Such arbitration shall be carried out by the original panel, if members are available, or by an arbitral tribunal. For arbitrator29 appointed by the purposes of the arbitral tribunal established under this Article, paragraph 5 of Article 71 Director-General and shall apply, mutatis mutandis. 6. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under this Article shall issue its award be completed within sixty (60) 60 days after the date when of expiry of the reasonable period of time. Concessions or other obligations shall not be suspended during the course of the arbitration. 7. The arbitrator30 acting pursuant to paragraph 6 shall not examine the nature of the concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the level of nullification or impairment. The arbitrator may also determine if the proposed suspension of concessions or other obligations is allowed under the covered agreement. However, if the matter is referred to itarbitration includes a claim that the principles and procedures set forth in paragraph 3 have not been followed, the arbitrator shall examine that claim. Such award In the event the arbitrator determines that those principles and procedures have not been followed, the complaining party shall apply them consistent with paragraph 3. The parties shall accept the arbitrator's decision as final and the parties concerned shall not seek a second arbitration. The DSB shall be binding on all informed promptly of the parties decision of the arbitrator and shall upon request, grant authorization to suspend concessions or other obligations where the request is consistent with the decision of the arbitrator, unless the DSB decides by consensus to reject the request. 8. The suspension of concessions or other obligations shall be temporary and shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the disputenullification or impairment of benefits, or a mutually satisfactory solution is reached. In accordance with paragraph 6 of Article 21, the DSB shall continue to keep under surveillance the implementation of adopted recommendations or rulings, including those cases where compensation has been provided or concessions or other obligations have been suspended but the recommendations to bring a measure into conformity with the covered agreements have not been implemented. 9. The dispute settlement provisions of the covered agreements may be invoked in respect of measures affecting their observance taken by regional or local governments or authorities within the territory of a Member. When the DSB has ruled that a provision of a covered agreement has not been observed, the responsible Member shall take such reasonable measures as may be available to it to ensure its observance. The provisions of the covered agreements and this Understanding relating to compensation and suspension of concessions or other obligations apply in cases where it has not been possible to secure such observance.31