THE CRISIS OF THE WTO DISPUTE SETTLEMENT SYSTEM

This article examines the crisis of the World Trade Organization (WTO) dispute settlement system, with particular focus on the paralysis of the Appellate Body since December 2019. The main objective of the study is to analyse the legal, institutional, political, and geopolitical factors contributing to the Appellate Body crisis, assess its implications for the effectiveness and predictability of WTO dispute settlement, and examine possible approaches to reforming the system. The research employs legal analysis, institutional analysis, document analysis, comparative analysis, and a review of relevant WTO practice and scholarly literature. Particular attention is given to the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), including the Appellate Body’s mandate, the ninety-day requirement for appellate reports, concerns regarding judicial overreach, the development of de facto precedent, and the consequences of the loss of the required quorum. The study also considers the broader relationship between the Appellate Body crisis, the stagnation of WTO negotiations, and increasing geopolitical tensions within the multilateral trading system. The findings indicate that the paralysis of the Appellate Body has weakened the enforceability, predictability, and credibility of WTO dispute settlement, while temporary mechanisms such as the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) provide only a partial response. The article further examines alternative reform approaches, including the restoration of a reformed Appellate Body, arbitration-based mechanisms, and hybrid models combining adjudication with greater political oversight. It concludes that sustainable reform should preserve the rules-based and binding character of WTO dispute settlement while addressing concerns regarding institutional balance, interpretative authority, inclusiveness, and the effective participation of WTO Members.