a critical study on power of the icj to decide a case ex

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SHIV SHAKTI

International Journal of in Multidisciplinary and

Academic Research (SSIJMAR)

Vol. 5, No. 2, April 2016 (ISSN 2278 – 5973)

A CRITICAL STUDY ON POWER OF THE ICJ TO DECIDE A

CASE EX AEQUO ET BONO UNDER ARTICLE 38 (2)

Ms. Bharti Sharma

Amity Law School, Amity University Madhya Pradesh, Gwalior.

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Abstract:

Ex Aequo Et Bono is a Latin term which means what is just and fair or according to equity and

good conscience. Something to be decided ex aequo et bono is something that is to be decided by

principles of what is fair and just. It is a term used in international law when a matter is to be

decided according to principles of equity rather than by points of law. Article 38(2) of the Statute

of the International Court of Justice provides that the court may decide cases ex aequo et bono, if

the parties agree thereto1. The distinction between equitable principles and decisions taken ex

aequo et bono, by what is fair and good are:

Judges are allowed to use principles of equity when making decisions in international

law.

The use of ex aequo et bono allows a judge to use whatever avenue he sees fit i.e., natural

law, custom, equity.

The provisions on ruling ex aequo et bono appear in almost all contemporary national and

international arbitration law.

In this article, I will be dealing with the history of the ruling ex aequo et bono, the concept, its

application and case laws dealing with the same concept, most importantly I will be dealing with

distinction between ex aequo et bono and other concepts of equity in natural law.

1 www.definitions.uslegal.com/Ex Aequo Et Bono, visited on 08/03/2016

http://www.definitions.uslegal.com/Ex

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PUBLIC INTERNATIONAL LAW

Article:

The ICJ is the primary judicial branch of the United Nations, with the primary function of

settling disputes between nations which submit their issues before the ICJ. ICJ has two types of

jurisdictions – advisory and contentious. When deciding cases, the Court applies international

law as summarized in Article 38 of the ICJ Statute, which provides that in arriving at its

decisions the Court shall apply international conventions, international custom, and the "general

principles of law recognized by civilized nations". Article 38(2) of the Statute of the

International Court of Justice (ICJ) provides that the court may decide cases ‗ex aequo et bono‗,

but only where the parties agree thereto.

Ex aequo et bono means a judgment based on considerations of fairness, not on considerations of

existing law. Such a judgment is rendered beside or against the law (contra legem), and not

within the law (intra legem). Article 38(2) of the I.C.J. Statute permits the Court to render a

judgment on these grounds. The very famous ruling of the principle of Ex aequo et bono is

―CASE CONCERNING DELIMITATION OF THE MARITIME BOUNDARY IN THE GULF

OF MAINE AREA‖, popularly known as Canada v. United States of America.

The application of the principle of ―ex aequo et bono‖ is seen in:

Article 38(2) of the Statute of the International Court of Justice (ICJ). In 1984 the ICJ

decided a case using "equitable criteria" in creating a boundary in the Gulf of Maine for

Canada and the US.

Article 33 of the United Nations Commission on International Trade Law's Arbitration

Rules (1976). It provides that the arbitrators shall consider only the applicable law,

unless the arbitral agreement allows the arbitrators to consider ex aequo et bono, or

amiable compositeur, instead.

Lex mercatoria (from the Latin for "merchant law") is the body of commercial law used by

merchants throughout Europe during the medieval period. It evolved similar to English common

law as a system of custom and best practice, which was enforced through a system of merchant

courts along the main trade routes. It functioned as the international law of commerce. It

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emphasised contractual freedom and alienability of property, while shunning legal technicalities

and deciding cases ex aequo et bono.

Lex mercatoria precepts have been reaffirmed in new international mercantile law. National trade

barriers are torn down in order to induce commerce. The new commercial law is grounded on

commercial practice directed at market efficiency and privacy. Dispute resolution has also

evolved and functional methods like international commercial arbitration is now available. The

principles of the medieval lex mercatoria — efficiency, party autonomy, and choice of

arbi t rator

— are applied, and arbitrators often render judgments based on customs. The new merchant law

encompasses a huge body of international commercial law.

Equity was used frequently in international law during the 19th century. Much international

arbitration provided for decision according to international law and equity. Then somehow at the

beginning of the 20th century things quieted down and equity was used much less.2

The Court would state it was well known that a particular principle existed as a general principle

of international law accepted by most nations and then would apply it, never mentioning equity.

In the 1960s when the Court began to consider disputes related to maritime boundaries in the

North Sea Continental Shelf Cases, it rediscovered equitable principles, however. There, the

Court relied on the Truman Proclamation that said that if the United States had any disputes

about the continental shelf, it would be solved by agreement with the other country concerned, in

accordance with equitable principles. Because the Proclamation was followed by a number of

other states, the Court cited it as the beginning of the trend that established the principle the

Court would follow. Of course, in the North Seas Continental Shelf Cases and a number of

following cases, various problems arose about what is equity, what are "equitable principles,"

and third, what is an equitable result. The first problem we have is the old distinction between

equity meaning principles of general international law and equity meaning that the court should

decide according to what is just and proper, which some call ex aequo et bono, an old well-

known phrase.

2 Equity in International Law, Author(s): Louis B. SohnSource: Proceedings of the Annual Meeting (American Society

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of International Law), Vol. 82(APRIL 20-23, 1988), pp. 277-291 Published by: American Society of International Law


The phrase "ex aequo et bono" was used in a large number of treaties, starting with the General

Act of Geneva in 1928, and the arbitration treaties that followed it. Those treaties provided that,

in principle, cases sent to the International Court of Justice should be decided according to article

38, paragraph 1, of the Statute of the Court, namely, the four basic sources of international law.

There was also article 38, paragraph 2, however, which allows the Court to decide ex aequo et

bono when the parties agree and, of course, some of those treaties amounted to fuch agreement.

The majority of those treaties did not provide, however, for the Court to decide ex aequo et bono;

they provided instead for an arbitral tribunal to deal ex aequo et bono with disputes that were not

legal. There was a second group of treaties, including the European Treaty on Peaceful

Settlement in the 1950s, that provided that if a tribunal could not find a rule of international law

on the subject, it might deal with the subject ex aequo et bono.3

There are theoretically three kinds of equity: one is equity intra legem, as the Romans used to

say; the second is equity praeter legem; and the third is equity contra legem.

Equity intra legem refers to the power of the court to select from one of several possible

interpretations of the law so as to achieve the most equitable result. It is equity within the law.

The second one, equity praeter legem, refers to the use of equity to fill a gap, or logical lacuna, in

the law. This is similar to the concept used by the European Convention. The third one, which is

the closest to ex aequo et bono, is equity contra legem.

The use of equity in derogation of the law, where an exception from the law is needed, given the

circumstances of the case, in order to achieve an equitable and just result. Some say that is what

the Court is doing at times, and it could have been implied perhaps from the early Court cases,

but in recent times the Court has started saying no, it is not doing that, it is always acting within

the law, intra legem. The Court said there is no principle on the settlement of boundary disputes

from which it may be necessary to depart. There is only the balancing of various circumstances,

various rules of equity, and the Court simply decides which of them is most appropriate in a

particular situation. This was the result of the Court's strong opposition to the idea, which of

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3 Ibid.

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course has been presented in every dispute, that equidistance is the basic, crucial rule about the

delimitation of boundaries. You divide everything half and half, more or less, on the basis of the

distance between the two coasts of the states whose boundaries are in dispute. Recently we saw

this argument being made by Malta in the case with Libya, but the Court repeatedly said, no, this

is not the problem. The problem is not that there is a rule of international law about equidistance

from which we must depart given special circumstances. Rather, it said, equidistance is just one

of the special rules that we could apply, other rules being for instance the natural prolongation of

land territory, or drawing a line from the boundary between two states, or even drawing the geo

graphical line following longitudinal or latitudinal parallels. As a result, the contra legem idea

was more or less abolished by the Court, though it comes back to some extent when the Court

starts talking about equitable results, or rather, about avoiding inequitable results, a distinction

made in the recent cases.4

Application of equity infra legem: In many cases where it is impossible to quantify the

damages precisely, international tribunals have made an equitable estimate of the compensation

to which the claimant is entitled.' The role played by equity in these cases is a modest one. It is

not used to determine entitlement to relief or remoteness of damage, but only to calculate the

measure of damages. If there is a rule of law entitling the claimant to compensation for pain and

suffering (to take one example), the law obviously does not intend the claimant to be deprived of

compensation solely because damages for pain and suffering cannot be calculated with the same

degree of precision as loss of earnings; by implication, therefore, the law itself requires the

tribunal to make an equitable estimate of the compensation due.

Similar decisions have been reached concerning interest and costs. The right to interest is not

based on equity but (usually) on a general principle of law; however, it is within the tribunal's

discretion to fix what it regards as a fair rate of interest." Similarly, a tribunal's power to award

costs is not derived from equity, but a tribunal has discretion to make what it regards as a fair

order concerning costs.

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4 Ibid

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In the British Guiana-Brazil Boundary arbitration, the arbitrator was required to determine the

boundary between British Guiana and Brazil. He found that there was insufficient evidence to

decide the controversy over certain parts of the disputed territory, and accepted as a rule of

necessity that he should make the division, taking account of lines traced by nature and giving

preference to the line which, being best defined throughout its entire course, afforded the most

equitable partition of the disputed territory. Here again, as in the cases concerning damages,

interest and costs, recourse to equity was essential in order to enable the arbitrator to discharge

his legal functions; if he had not relied on equity, he would have been unable to determine the

boundary, as the arbitration agreement required him to do.

A somewhat bolder use of equity was advocated in the Romberg case, where the tribunal

proclaimed its right to decide by "taking account of what it deems just and equitable rather than

minutely observing legal procedures and formalities‖; however, the legal formalities which were

disregarded were rules of municipal law, not rules of international law.'5

Application of Ex aequo et bono in Arbitration: The doctrinal, normative and practical

approach to decision making according to the principles of equity varies considerably in various

countries. There are even differences in the way this term is interpreted. In principle, it is

possible to distinguish two concepts, which are (i) the ability to make decisions as an amiable

compositeur, or (ii) decision making according to the principles of equity. In legal theory,

although these decision-making methods are two different concepts, in practice they clash with

each other, and sometimes it is somewhat difficult to tell them apart. Nevertheless, they can be

identified as two separate approaches, as follows from foreign and international rules and the

standards governing them.6

As these are sui generis unmistakable concepts, the allowance to

decide the merits ex aequo et bono does not mean to act as amiable compositeur in the strict

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Equity and General Principles of Law Author(s): Michael Akehurst Source: The International and Comparative

Law Quarterly, Vol. 25, No. 4 (Oct., 1976), pp. 801-825 Published by: Cambridge University Press on behalf of the

British Institute of International andComparative Law 6 ICC Rules – Article 21(3): ―The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex

aequo et bono only if the parties have agreed to give it such powers.‖ For the former wording, see Article 17(3) of

the ICC Rules. This wording implies a qualitative difference between the two procedures as the amiable compositeur

is a ―procedural approach‖, while ex aequo et bono entails ―decision making‖.

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sense and vice versa. Some states only recognize amiable compositeur procedures7, whereas

other countries rely exclusively on decision making ex aequo et bono8.

The settlement of a dispute where the parties empower a particular entity (an arbitrator) to act as

an amiable compositeur is not decision making in the strict sense and the whole process of

arbitration thus loses its adversary character, but is a sort of quasi-settlement proceeding. The

term compositeur is derived from the word composition, which is still used in many languages to

mean agree or settle, rather than decide. An arbitrator acting as an amiable compositeur is thus

viewed as a representative authorized to resolve the dispute. It is important not to lose sight of

the fact that some jurisdictions may allow for such a construct, even if exceptionally, referring

for example to the concept under Italian law known as arbitrato irrituale,9

along with arbitraje

informal and impropio o libre in spain.

International institutions involved in arbitration are also aware of the problem with the definition

of the terms amiable compositeur and ex aequo et bono. A working group was set up at the ICC

in 200510

to: (i) identify the basic characteristics of the concepts in question, and (ii) study the

role of arbitrators making decisions based on principles of equity (whether in relation to

questions of jurisdiction11

, procedures or issues related to the assessment of the merits).

7 For example, France and Quebec.

8 For example, in Switzerland and Italy, as well as the Czech Republic and Slovakia.

9 ALEXANDER BĚLOHLÁVEK, ROZHODČÍ ŘÍZENÍ, ORDRE PUBLIC A TRESTNÍ, This is a case where the

arbitrators, in the form of an arbitration agreement as an enforceable instrument, confirm the parties‘ agreement on

the content

of their obligations, e.g. the equivalent of an award with a contractually agreed content (cf. analogous treatment

under the ZPOG) or the issuance of an arbitral award consistent with the content of the parties‘ agreement at the

request of the participants in the arbitration proceedings. 10

Headed by Edouard Bertrand [FRA] and Ronald King [GBR]. 11

It should be noted that in some jurisdictions the issue of authority (jurisdiction) is regarded as a subject of

substantive law, i.e. as part of the merits of the case. This can be attributed, in particular, to the influence of

common law, to which the concept inherently pertains and which, in many respects, is reflected in a number of

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approaches applied in proceedings before the ICC International Court of Arbitration.

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Conclusion:

The principle of Ex aequo et bono has always been questioned, because judgment rendered under

this principle is not based on existing law. Article 33 of UNCITRAL and Article 38(2) of Statute

of International Court of Justice talks about moving away from substantive law and gives power

to decide a case on its fairness, and on the principles of equity and customs.

Though many may not confide their belief in ruling of ex aequo et bono, researcher found that

many times existing law (Positive Law) may not be able to provide a good decision, because it is

a code of conduct and has a limit from the source which delegates the power on it.

International law is a synthesis of Public law and Domestic law, unlike Domestic law it cannot

be bound to a set of laws. Natural law, customs, equity are based on morality and values, the case

is decided on its merits. Therefore the principle of ex aequo et bono which has not been used for

quite a long time, should be brought into practice.

‗International law office‗issues an online newsletter, according to which there have been no

recent cases decided on principle of ex aequo et bono.

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Bibliography:

Articles Referred:

Czech (& Central European) Yearbook of Arbitration, By JurisNet LLC, 2013

Equity in International Law, Author(s): Ruth Lapidoth, Source: Proceedings of the

Annual Meeting (American Society of International Law), Vol. 81 (APRIL 8-11, 1987),

pp. 138-147 Published by: American Society of International Law12

Equity and General Principles of Law, Author(s): Michael Akehurst, Source: The

International and Comparative Law Quarterly, Vol. 25, No. 4 (Oct., 1976), pp. 801-825

Published by: Cambridge University Press on behalf of the British Institute of

International and Comparative Law13

Equity in International Law, Author(s): Louis B. Sohn Source: Proceedings of the Annual

Meeting (American Society of International Law), Vol. 82(APRIL 20-23, 1988), pp. 277-

291 Published by: American Society of International Law14

12 http://www.jstor.org/stable/25658357



http://www.jstor.org/stable/25658357



a critical study on power of the icj to decide a case ex

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