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. Impact Factor = 3.133 (Scientific Journal Impact Factor Value for 2012 by Inno Space Scientific Journal Impact Factor) Global Impact Factor (2013)= 0.326 (By GIF) Indexing: 1
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 thereto 1. 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 2
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 3
PUBLIC INTERNATIONAL LAW 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 arbitrator 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 wellknown phrase. 2 Equity in International Law, Author(s): Louis B. SohnSource: Proceedings of the Annual Meeting (American Society 4
of International Law), Vol. 82(APRIL 20-23, 1988), pp. 277-291 Published by: American Society of International Law PUBLIC 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 5
3 Ibid. 6
PUBLIC INTERNATIONAL LAW 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. 7
4 Ibid 8
PUBLIC INTERNATIONAL LAW 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 5 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. 9
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PUBLIC INTERNATIONAL LAW sense and vice versa. Some states only recognize amiable compositeur procedures 7, whereas other countries rely exclusively on decision making ex aequo et bono 8. 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 2005 10 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 jurisdiction 11, 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 11
approaches applied in proceedings before the ICC International Court of Arbitration. 12
PUBLIC INTERNATIONAL LAW 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. 13
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PUBLIC INTERNATIONAL LAW 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 Law 12 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 Law 13 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 Law 14 12 http://www.jstor.org/stable/25658357 13 http://www.jstor.org/stable/758525 14 http://www.jstor.org/stable/25658429 10 P a g e