New developments in the implementation of the Olivos Protocol for the Resolution of Controversies in the Mercosur

In “Ratification of the Olivos Protocol for the Resolution of Controversies in the Mercosur” (see Marval News # 11 of October 31, 2002), we informed about the ratification by the Argentine Congress of the Olivos Protocol for the Solution of Controversies in the Mercosur signed by the Governments of Uruguay, Paraguay, Brazil and Argentina on February 18, 2002 (“the Protocol”).

At that moment we emphasised on the fact that Argentina was the first Mercosur member to ratify the Protocol and that the other countries had submitted it to their respective Congresses for urgent approval. In practice, that meant that the Protocol would only come into force thirty days after the forth member state had deposited the ratification instrument with the Government of Paraguay.

Since then, we have confirmed that the Protocol ratified by Argentina by Law No 25,663, published in the Official Gazette on October 21, 2002, and promulgated by Decree No 2,091/02 was deposited with the Government of Paraguay on January 29, 2003.

During that time, the Protocol was approved in Paraguay by Law No 2,070 on February 3, 2003 and it was deposited on February 20, 2003. In Uruguay, the Protocol was approved by Law No 17,692 on April 11, 2003 and deposited on July 11, 2003.

Even though Brazil has yet to ratify the Protocol, they have already taken the first step in that direction. The Protocol has been recently approved by Legislative Decree No 712/03. It is now missing a decree by the Brazilian Executive Branch and the subsequent deposit of the ratified Protocol before the Government of the Republic of Paraguay.

The implementation of the Protocol in the near future will regulate the controversies that may arise between member states regarding the interpretation of, application of or non-compliance with the Treaty of Asunción, the Ouro Preto Protocol, the protocols and agreements entered into under the umbrella of the Treaty of Asunción, the Decisions of the Common Market Council, the Resolutions of the Common Market Group and the Directives of the Mercosur Trade Commission.

As of its entry into force, the Protocol will revoke the Brasilia Protocol for the Resolution of Controversies, signed on December 17, 1991, and the Regulation of the Brasilia Protocol by CMC Decision No 17/98, which is applied to the resolution of controversies among member states. Nevertheless, while the controversies already raised under the Brasilia Protocol are not fully settled, and until the procedures for the appointment of arbitrators and experts provided for in the Protocol have been completed, the Brasilia Protocol and its Regulations will continue to be applied when appropriate.

The Protocol maintains the institution of the Ad Hoc Tribunal (“the Tribunal”), with jurisdiction to analyze the object of the controversy as determined by the written submissions and the replies submitted thereto, and which cannot be broadened later. Analysis of the controversy by the Tribunal will be preceded by a stage of direct negotiation between the parties which shall not last longer than 15 days as of the date in which one of the parties notifies the other of the decision to bring proceedings for the resolution of the controversy before the Tribunal. Countries party to a controversy must inform the Common Market Group of the proceedings carried out during the negotiation stage and also of their outcome.

For further information on the proceedings and the legal framework provided for by the Protocol we refer to our article “Ratification of the Olivos Protocol for the Resolution of Controversies in the Mercosur” published in Marval News # 11.