EquityinInternationalLaw
FrancescoFrancioni
Contenttype:
EncyclopediaEntries
Articlelastupdated: June
2013
Product: MaxPlanck
EncyclopediaofPublic
InternationalLaw[MPEPIL]
Subject(s):
Equity—Softlaw—Continentalshelf—UNCLOS(UNConventionontheLawoftheSea)—Exclusive
economiczone—Exclusivefisherieszone—Sustainabledevelopment—Endangeredspecies—
Internationalwatercourses—Equitableprinciples—Exaequoetbonojurisdiction
PublishedundertheauspicesoftheMaxPlanckFoundationforInternationalPeaceandtheRuleofLaw
underthedirectionofRüdigerWolfrum.
From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2013. All Rights Reserved. Subscriber:
Universita di Bologna; date: 17 March 2015
A.Definitions
1Equityisapolymorphousconcepteveninthenarrowconfinesoflegallanguage.Initsmost
generalmeaningitreferstowhatisfairandreasonableintheadministrationofjustice,aconcept
thatinRomanLawisaptlyexpressedbythetermaequitas.Inanarrowerandmoretechnical
meaning,equityreferstothepowerconferredontheInternationalCourtofJustice(ICJ)underArt.
38(2)StatuteoftheInternationalCourtofJustice,oronotherinternationalcourtsandtribunals,to
decideacaseexaequoetbono,iewithoutbeingrequiredtoapplyrulesoflaw(JudicialSettlement
ofInternationalDisputes;PeacefulSettlementofInternationalDisputes).Finally,athirdmeaningof
equityreferstotheseparatesystemofrulesandjurisprudencethathasdevelopedintheAngloAmericantraditioninparallelwiththedevelopmentofthecommonlaw.Thislatterconceptofequity
connotesasourceofdomesticlawthathasitshistoricalantecedentinthejurisdictionoftheRoman
praetor.ItsevolutionisduetothedecisionsoftheChanceryCourtinmedievalEnglandwherethe
rigidityofthecommonlaw,withitslimitednumberofremedies,writs,effectivelylimitedaccessto
justiceforpotentialclaimants.Asystemofgenerallegalprinciples–dubbed‘maximsofequity’–
wasdevisedinordertoavoidthemanifestinjusticesthatcouldarisefromthestrictapplicationof
theprescribedregime,therebyrenderingthelegalrulesmoreflexible.Thefollowinganalysiswill
dealonlywiththefirsttwotypesofequity.Thethirdone,insofarasitexpressesapeculiarityof
theAnglo-Americanlegaltradition,isofinterestmainlyforcomparativelawratherthaninternational
law(ComparativeLaw,FunctionsandMethods).
B.TheRational-EthicalFoundationofEquityinInternationalLaw
2Preliminarytotheconsiderationofwhetherequitymayconstituteasourceofinternationallaw
(SourcesofInternationalLaw)isthequestionofwhetheritispossibletoassumetheexistenceofa
commonsenseofjusticeandfairnessinaculturallyandpoliticallydividedsocietyasinternational
societyistoday.Theprofoundtransformationoftheinternationalcommunityinthesecondhalfof
the20th centuryandtherisetostatehoodofmanypeoplesandterritorieshithertoundercolonial
rulehasmagnifiedthecomplexityanddiversityoftheinternationalcommunity.Post-colonial
studiesandcriticallegalstudieshavedebunkedthemythoftheuniversalvalueofinternationallaw
(Universality)andhaveintroducedattheepistemologicalandnormativeleveldifferent
perspectivesandtheoriesofjusticeinspiredbytheneedsofthedevelopingworld(Developing
Countries)andthememoryofpastinjusticeandtheinstrumentaluseofinternationallawtojustify
conquestandcoercion(seeAnghie;Koskenniemi;Kennedy;seealsoHistoryofInternationalLaw,
sinceWorldWarII).Similarly,feministtheoriesofinternationallawhavehighlighteditsinabilityto
representthemoralandculturalcomplexityofthehumanexperiencebecauseofitsfailureto
includethecontributionofwomenintheinstitutionalstructuresandnormativeprocessesthathave
shapedthedevelopmentoftheinternationallegalorder(CharlesworthandChinkin;Feminism,
ApproachtoInternationalLaw).Atthethresholdofthe21stcenturytwodevelopmentshavethe
potentialtofurtherhindertheconceptualizationofauniversaltheoryofjusticeandequity.Thefirst
isthesuddeneruptionontotheinternationalsceneofreligiousfundamentalism,withtheattendant
spectreofa‘clashofcivilizations’andthecorrespondingemergence,especiallyintheUnited
StatesofAmerica(‘US’),ofautilitarian,reductionistviewofinternationallawasapureinstrument
ofStateinterests(seeGoldsmithandPosner;Huntington).Thesecondisthephenomenonofthe
so-calledfragmentationofinternationallaw,whichputsintoquestiontheunityoftheinternational
legalorderasaconsequenceoftheexcessivespecializationandcompartmentalizationindifferent
branchesofthelawandofthemultiplicationofinstitutionsandcourtsresponsiblefortheir
implementation(seetheReportoftheStudyGroupoftheInternationalLawCommission
‘FragmentationofInternationalLaw:DifficultiesArisingfromtheDiversificationandExpansionof
InternationalLaw’[Conclusions][2006]).
3Althoughitisundeniablethattheabovehistoricaldevelopmentsandintellectualapproaches
maydiscloserealdifficultiesinreachingagreementonacommondefinitionofequity,nevertheless
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theycannotlogicallyexcludetheexistenceofacommonsenseoffairnessandequityamong
differentpeoplesoftheworld.First,itispreciselybecauseofthepluralismandculturaldiversityof
theinternationalsocietythatasharedconceptionofwhatisjustandequitablebecomesa
conditionsinequanonoftheoverallcoherenceandunityoftheinternationallegalsystem(see
Dupuy).Second,modernscienceisincreasinglyrecognizingtheexistenceofabiologicalbasisfor
thesenseofjustice,abasisthatispartofthephylogeneticevolutionofHomosapiens,which
enableshumanbeingstoreacttoblatantinjusticeinawaythatissimilartotheantibodyreactionof
thecellsysteminthepresenceofparasiteattackordanger(seeLorenz,Chapter6).Farfrom
resultingintheresurrectionofthemetaphysicalconstructof‘naturallaw’(NaturalLawandJustice),
thisdiscoveryhasledtotheparallelreconstructionofthestructuralsimilaritiesamongthemost
diverselegalsystemsoftheworldaspresentedbytheCommonCoreProject,developedunderthe
directionofProfessorRudolfSchlesingerofCornellUniversityinthe1960sandcurrentlycarried
outbytheUniversityofTrentoasTheCommonCoreofEuropeanPrivateLawProject(seeM
BussaniandUMattei‘TheCommonCoreofEuropeanPrivateLaw’<http://www.commoncore.org/>),whichtendstodemonstratetheexistenceofaninnatecommonperceptionofwhatis
fairandwhatiswrong.Indeed,itisgermanetonotethatcomparativeresearchhasrevealedthata
largenumberofsocalled‘equitable’principles,suchasgoodfaithandtheprohibitionofabusde
droit,arecommontoallofthemajorlegalfamilies(Newman ,Burke123–98 ).Third,evenifone
weretoremainskepticalofthebiologicalbasisofthesenseofjustice,apowerfulargumentin
favouroftheacceptanceofacommonsenseofequityininternationallawcomesfromthe
historicalcontextinwhichtheproblemisposed.Weliveinanepochofunprecedented
opportunitiesforcontacts,exchange,andcommunicationbetweenindividualsandpeoples.This
entailsaprocessofmutuallearningfrom,anddiffusionof,differentlegalsystemsanddifferent
ideasofjustice.Thisprocessbringswithittheadaptationofhumanbehaviourtothenew
conditionsofexchangeandco-operation,andhasthereflexiveeffectofconsolidatingshared
conceptionsofjusticeandequity.Thisisallthemoresoininternationallaw,thelawthatby
definitionconcernstheregulationofinternationalrelationsandexchanges(seealsoCo-operation,
InternationalLawof)andthat,bynecessity,hasthetaskofreconciling,notonlycompetingState
interests,butalsodifferentethicalandculturalviewsofthepeoplesoftheworld.
C.ThePlaceofEquityinInternationalLaw
4Ifethicalandculturaldiversityarenotaninsurmountableobstacletothereceptionofequityin
internationallaw,itsprecisescopeandroleamongthesourcesofinternationalnormsremains
unclear.Art.38(1)ICJStatutedoesnotincludeequityamongtheformalsourcesofinternational
law,ietreaty(Treaties),custom(CustomaryInternationalLaw),andgeneralprinciples(General
PrinciplesofLaw).Therefore,itisnecessarytoexaminebywhichotherprocessesandunder
whichotherformsconsiderationofequitymayplayaroleinthedetermination,interpretation
(InterpretationinInternationalLaw),andimplementationofinternationallawandinthesettlementof
internationaldisputes.
5Firstofall,equitymaybecomeamaterialsourceofthelawwhensubsumedundertheformal
headingof‘generalprinciplesoflaw’pursuanttoArt.38(1)(c)ICJStatute(Rosenne).Ina
frequentlycitedpassageofhisdissentingopinioninthecaseconcerningTheDiversionofWater
fromtheMeuse(TheNetherlandsvBelgium)(Meuse,DiversionofWaterCase[Netherlandsv
Belgium]),JudgeManleyHudsonconstruedcertainmaximsofequityas‘generalprinciplesoflaw
recognizedbycivilizednations’(at76).So—heconcluded—maximssuchas‘equalityisequity’
(ibid77)and‘hewhoseeksequitymustdoequity’(ibid),wouldcompelajudgetoensurethat
‘wheretwopartieshaveassumedanidenticalorreciprocalobligation,onepartywhichisengaged
inacontinuingnon-performanceofthatobligationshouldnotbepermittedtotakeadvantageofa
similarnon-performanceofthatobligationbytheotherparty’(ibid;Reciprocity).JudgeAnzilotti
wentstillfurtherinhisdissentingopinion,statingthattheprincipleofinadimplentinonest
inadimplentum(aequitasestequalitas)is‘sojust,soequitable,souniversallyrecognisedthatit
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mustbeappliedininternationalrelations…[andis]oneofthegeneralprinciplesoflawrecognised
bycivilisednations’(at50).AsJudgeSchwebelnotedinMilitaryandParamilitaryActivitiesinand
againstNicaragua([NicaraguavUnitedStatesofAmerica][1986]ICJRep392–94),Anzilotti’s
assertioninthisregardhasneverbeenchallenged.TheDiversionofWaterfromtheMeusecase
itselfhasbeendescribedasequity’s‘locusclassicus’(Jenks322 ).
6Theconstructionofequityasamaterialcomponentofthecategoryofgeneralprinciplesoflaw
isalsosupportedbytheauthoritativeopinionofacademicwriters(seeFriedmann;DeVisscher;
Lauterpacht[1927]para.48;BChengGeneralPrinciplesofLawAppliedbyInternationalCourts
andTribunals(StevensLondon1953);Rossi;White).Itwasclearlyalsotheintentionofthedrafters
ofthePCIJStatute—uponwhichtheICJStatuteiscloselymodelled—toincludesuchaconstruction,
albeitforavarietyofreasons(seeLeagueofNations/AdvisoryCommitteeofJurists;Burke103–
14 ).
7Anotheruncontroversialrolethatequitymayplayininternationallawisthatofaninstrumental
criterionofinterpretationoftheapplicablelawinordertoadaptsuchlawtothespecific
circumstancesofthecase.Inthiscaseequityisnotusedasaprincipleendowedwithautonomous
normativitybutratherasamethodforinfusingelementsofreasonablenessand‘individualized’
justicewhenevertheapplicablelawleavesamarginofdiscretiontothecourtortribunalwhichhas
tomakethedecision.Inthissenseitisappropriatetospeakofequityinfralegem,iewithinthe
boundariesofthelaw(seeFrontierDisputeCase[BurkinaFaso/RepublicofMali]).
8Art.31(3)(c)oftheViennaConventionontheLawofTreaties(‘VCLT’[concluded23May1969,
enteredintoforce27January1980]1155UNTS331)prescribesthat‘[t]hereshallbetakeninto
account,togetherwiththecontext:…(c)anyrelevantrulesofinternationallawapplicableinthe
relationsbetweentheparties’.Asanaspectoftheinterpretativeprocess,itmustbetakeninto
accountalongside,andintegralto:Art.31(1),the‘basicrule’oftreatyinterpretation—thatis,thata
treatyistobeinterpretedingoodfaith,withtheordinarymeaninggiventothetermsofthetreatyin
thelightofitsobjectandpurpose;Art.31(2),thetreaty’scontext;Art.31(3)(a)and(b),
subsequentagreementsandsubsequentpractice;Art.31(4),anyrelevantspecialmeaning;and
Art.32,dealingwithsupplementarymeansofinterpretation.Therefore,ifequitymaybetreatedas
asub-categoryofthegeneralprinciplessourceoflaw,perArt.38(1)oftheICJStatute,itmayalso
behighlyrelevantintreatyinterpretation,asanextraneouslegalsource.
9Finally,thehypothesisofequitycontralegemorpraeterlegem,ieinoppositiontolaworoutside
thelaw,iscontemplatedbyArt.38(2)ICJStatute.Resorttothisconceptofequity,whichentailsthe
creationofindividualizedrulesbythejudgeforthesettlementofthedisputeexaequoetbono,
requiresspecificconsentbytheparties.Asisknown,nocasehasbeensubmittedsofartotheICJ
inwhichthepartieshavegrantedtheCourttheexceptionalpowertodecideexaequoetbono.
D.HistoricalEvolution
10Althoughintheorythevarioustypesofequityoutlinedaboveappearwelldemarcated,in
practicethedifferencesbetweenthemtendtobeblurred.Intheearlypracticedevelopedby
arbitraltribunals(Arbitration)andbythePermanentCourtofInternationalJustice(PCIJ),the
prevailingviewofequityisthatofasetofprinciplescapableoffacilitatingajustandfairsolutionof
adisputewithintheframeworkoftheapplicablelaw,ietreatyprovisionsorcustomarynorms(eg
CayugaIndianClaims;OrinocoSteamshipCoCase[UnitedStatesofAmericavVenezuela];
NorwegianShipowners’ClaimsArbitration;TheDiversionofWaterfromtheMeuse[The
NetherlandsvBelgium];EasternExtension,AustraliaandChinaTelegraphCo.Ltd.[United
KingdomvUnitedStatesofAmerica][1923]6RIAA112;TheRussianIndemnityCase[Russiav
Turkey][1912]11RIAA421;FaberCase[German-VenezuelanMixedClaimsCommission][1903]
10RIAA438;Yuille,ShortridgeetCie[GreatBritainandPortugal][1861]29RIAA57;Affairedu
CapitaineThomasMelvilleWhite,DécisiondelaCommissionchargée,parleSénatdelaville
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librehanséatiquedeHambourg,deprononcerdanslacauseduCapitaineThomasMelville
White,datedeHambourgdu13avril1864inHLaFontainePasicrisieinternationale,1794-1900,
Histoiredocumentairedesarbitragesinternationaux48[NijhoffTheHague1997] ;Finnish
VesselsCase[1934]3RIAA1479;SheikofAbuDhabivPetroleumDevelopment(TrucialCoast)
Ltd[1951]18ILR144).
11Inthiscontexttherelationshipbetweenequityandlawisoneofcomplementarityandcanbe
characterizedasinfralegem.Amovetowardsamoreautonomousconceptofequity,capableof
prescribingasettlementoutsidetheapplicablerulesoflaw,canbeobservedinanumberofcases
decidedbythePCIJintheearly1930s.IntheCaseoftheFreeZonesofUpperSavoyandthe
DistrictofGex(FrancevSwitzerland)(FreeZonesofUpperSavoyandGexCase),thePCIJwas
dividedonwhetherthedeterminationofthecustomsregimeofthezonewastobeeffected
exclusivelyonthebasisofthetermsoftheTreatyofVersaillesorbyreferencetoconsiderationsof
equity,eventhoughthespecialagreementbetweenFranceandSwitzerlandcontainedno
referencetoadecisionexaequoetbono.IntheendthemajorityoftheCourt,byacastingvoteof
thepresident,favouredtheapplicationofstrictrulesoflaw.However,thedoorwasopenedforthe
debateoverthepoweroftheCourttoresorttoequityprinciplesevenintheabsenceofthepower
todecideexaequoetbono.InthesubsequentcaseconcerningTheDiversionofWaterfromthe
Meuse(TheNetherlandsvBelgium),thispossibilitywasfullyseizedinthealreadyciteddissenting
opinionofJudgeHudsonwhoboldlystatedthatunder‘Article38oftheStatute,ifnotindependently
ofthatArticle,theCourthassomefreedomtoconsiderprinciplesofequityaspartofinternational
lawwhichitmustapply’(at77).Thisstatementclarifiesapointthathadremainedambiguousinthe
CaseoftheFreeZonesofUpperSavoyandtheDistrictofGex(FrancevSwitzerland),iethatthe
powertodecideexaequoetbonounderArt.38(2)ICJStatutemustremaindistinctfromthe
inherentpoweroftheCourttoresorttoequityprinciplesaspartofinternationallawandofthe
normaladjudicationprocess.Acautiousconfirmationofthisapproachcanbefoundinthe1937
ResolutionoftheInstitutdeDroitinternationalstatingthat:
l’équitéestnormalementinhérenteàunesaineapplicationdudroitmême,et…lejuge
international…est,deparsatâchemême,appeléàentenircomptedanslamesure
compatibleaveclerespectdudroitapplicable(InstitutdeDroitinternational‘La
compétencedujugeinternationalenéquité’140).
(equityisnormallyinherentinaproperapplicationofthelawitself,and…theinternationaljudge…
is,bythenatureofhistask,evencalledupontotakeitintoaccounttotheextentconsistentwith
respectfortheapplicablelaw(translationbytheeditor)).
12IndividualequitableprincipleshavehadimportantinfluenceindecidingcasesbeforetheICJ
andPCIJ.Oneprominentexampleisthatofestoppel.Lauterpacht(1958)notesthatthePCIJ’searly
caselawwasoccasionally‘reminiscentofsomeoftheelementsofestoppelinEnglishlaw’,citing
theTreatmentofPolishNationalsandOtherPersonsofPolishOriginorSpeechintheDanzig
TerritoryPCIJRepSeriesA/BNo44,CaseoftheFreeZonesofUpperSavoyandTheDistrictof
GexandGreco-BulgarianCommunitiesPCIJRepSeriesBNo17casesasprominentexamples(at
83).IntheChorzówFactorycase,itwasheldthataStatecouldbeestoppedfrompleadingthatthe
Courtlackedjurisdictioninthecasebecause‘itis…aprinciplegenerallyacceptedinthe
jurisprudenceofinternationalarbitration,aswellasbymunicipalcourts,thatonepartycannotavail
itselfofthefactthattheotherhasnotfulfilledsomeobligation,orhasnothadrecoursetosome
meansofredress,iftheformerpartyhas,bysomeillegalact,preventedthelatterfromfulfillingthe
obligationinquestion,orfromhavingrecoursetothetribunalwhichwouldhavebeenopentohim’
(TheFactoryatChorzów[GermanyvPoland]PCIJRepSeriesANo9,31;seealsoBurke216–24 ).
Ananalogousequitableprinciple,foundeduponthedoctrineoflegitimateexpectationwasapplied
intheLegalStatusofEasternGreenland(DenmarkvNorway)case(PCIJRepSeriesA/BNo53).
Morerecently,theTempleofPreahVihearjudgmentrepresentedaconspicuoususageofestoppel
doctrinebytheICJ([CambodiavThailand][1962]ICJRep6).
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13ItiswiththeICJ,andinparticularwithitsjurisprudenceoncontinentalshelvesdelimitationthata
newandmorerobustresorttoequitypraeterlegemisinaugurated(ContinentalShelf).Thelocus
classicusofthisturnisrepresentedbytheNorthSeaContinentalShelfCases(FederalRepublicof
Germany/Denmark;FederalRepublicofGermany/Netherlands).Here,theCourtwasconfronted
withadisputeoverthepropermethodofdelimitationoflateralcontinentalshelfboundarieswhich
couldhavebeensettledbytheapplicationofexistingrulesofthelawofthesea—ietheprincipleof
equidistance.Giventhemanifestlyunjustresultthatsuchprinciplewouldhaveproducedforoneof
theparties—namelyGermany—duetoitsconcavecoastline,theCourtresortedtoequity,notso
muchageneralconsiderationoffairnesstobendthelawtowardsajustresult,butasaconcept
capableofgeneratingtruelegalobligationsforthepartiestothedisputebesidesandalmost
independentlyofthelaw.ItistruethattheCourtgoesonatlengthtojustifyitsnormativeapproach
toequityintermsoftheruleoflawrequiringtheapplicationofequitableprinciplesinmattersof
continentalshelfdelimitation.TheCourtmadethispointwhenitstatedthatit‘wasnotapplying
equitysimplyasamatterofabstractjustice,butapplyingaruleoflawwhichitselfrequiresthe
applicationofequitableprinciples’(atpara.85).However,itiseasytoseehowthisargumentis
simplyarhetoricaldevicepermittingtheCourtto‘assume’theexistenceofalegalnormor
principleofinternationallawprescribingtheapplicationofequitableprinciples(General
InternationalLaw[Principles,RulesandStandards]).Inreality,theCourtactedasiftherewasagap
inthelawtobefilledbyareferencetoequity.Inthissense,wecannotdisagreewithJudgeMorelli’s
opinion,whichcharacterizedtheCourt’sdecisionintermsofarenvoitoequityasasourceof
principlesandcriteriaoutsidethescopeofthelaw(NorthSeaContinentalShelfCases[Federal
RepublicofGermany/Denmark;FederalRepublicofGermany/Netherlands][DissentingOpinionof
JudgeMorelli]para.19).
14Oncetheconceptofequityisfreedfromthemooringsofinternationallaw,theconsequence
andtheriskisthatofajudicialdriftingtowardselusivesubjectivismwithlittleroomleftforthe
necessaryguaranteeoftheobjectivityandpredictabilityofthelaw.Thisriskwasclearlypresentto
theICJintheCaseconcerningtheBarcelonaTraction,LightandPowerCoLtd(NewApplication:
1962)(BelgiumvSpain)(SecondPhase)(BarcelonaTractionCase),whichwasdeliveredjustone
yearaftertheNorthSeaContinentalShelfCases.InthatcasetheCourtwasconfrontedwiththe
issueofwhetherthenationalStateoftheshareholdershadlocusstanditoextenddiplomatic
protectiontoacompanywhosenationalState—namelyCanada—hadchosennottopresenta
claim(InternationalCourtsandTribunals,Standing).Havingfoundthatnosuchrightexistedunder
theapplicablerulesofcustomaryinternationallaw,theclaimantStatearguedthatarightofaction
bythenationalStateoftheshareholdersshouldbepermittedasamatterofequity.TheCourtdid
notdismissthepossibilityofarecoursetoequityasanalternativetolaw,thusindirectlyconfirming
theearlierpositiontakenintheNorthSeaContinentalShelfCaseswithregardtotheruleof
equidistance.However,inthiscasetheCourtdidnotconsiderthatthespecificcircumstances
warrantedadeparturefromthegeneralruleofinternationallaw,whichauthorizesthenational
Statealonetopresentaclaimfordiplomaticprotection(CaseconcerningtheBarcelonaTraction,
LightandPowerCoLtd[NewApplication:1962][BelgiumvSpain][SecondPhase]paras92–101).
So,equityandequitableprincipleswerenotdeemedtorequireadecisiondifferentfromthat
dictatedbythestrictruleofinternationallaw.However,theCourtdidextendtheprincipleof
diplomaticprotectiontocorporateentities,whichdemonstratesalimitedconceptionofequitable
flexibility.AdifferentconclusionwasreachedafewyearslaterbytheIran-UnitedStatesClaims
TribunalinthecaseofHarzaetalvTheIslamicRepublicofIranwhere,afterrecognizingthat
‘shareholderssuchastheclaimantsordinarilymaynotassertclaimsbelongingtotheircorporation’
theTribunalconcludedthat‘equityrequiresthattheytakesuchclaimssubjecttothedefencesand
counterclaimsthatcouldhavebeenraisedagainstthecorporation’(at110).
15Thehighwatermarkinthedevelopmentofaconceptofequitypraeterlegemendowedwithits
autonomousnormativitywasreachedintheearly1980sintheCaseconcerningtheContinental
Shelf(Tunisia/LibyanArabJamahiriya)involvingthedelimitationofthecontinentalshelf.Herethe
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Courtwentsofarastoconstrueequityasaself-standingsourceoflegalprincipleswhenitstated
that:
[equity]wasoftencontrastedwiththerigidrulesofpositivelaw,theseverityofwhichhad
tobemitigatedinordertodojustice.Ingeneral,thiscontrasthasnoparallelinthe
developmentofinternationallaw;thelegalconceptofequityisageneralprincipledirectly
applicableaslaw(atpara.71).
16Thisapproachwasconfirmedshortlythereafterinthedecisionrenderedbyachamberofthe
CourtinthedisputebetweenCanadaandtheUSoverthedelimitationofmaritimeboundariesinthe
CaseconcerningDelimitationoftheMaritimeBoundaryintheGulfofMaineArea(Canada/United
StatesofAmerica)(GulfofMaineCase;MaritimeDelimitationCasesbeforeInternationalCourtsand
Tribunals).Inbothcasestheuseofequityisresult-oriented,iefinalizedtotheattainmentofan
equitablesolutionindependentlyofanyruleoflaw.ThisorientationoftheCourtandofthechamber
wascriticizedbymembersoftheCourt(see,inparticular,CaseconcerningtheContinentalShelf
[Tunisia/LibyanArabJamahiriya][DissentingOpinionofJudgeGros]paras18–19;Case
concerningDelimitationoftheMaritimeBoundaryintheGulfofMaineArea[Canada/United
StatesofAmerica][DissentingOpinionofJudgeGros]paras41–44andinliterature,egWeilparas
134–44).LatercaselawoftheICJinmattersoflandandmaritimeboundarydelimitationreveala
gradualreturntoalesscreativeuseofequity(LandBoundaries),asacorrectivemethodtobe
appliedtotherelevantnormsofinternationallawratherthanasubstituteofthelaw(see,in
particular,theCaseconcerningtheContinentalShelf[LibyanArabJamahiriya/Malta]paras55–58;
ContinentalShelfCase[LibyanArabJamahiriya/Malta];seealsotheCaseconcerningtheFrontier
Dispute[BurkinaFaso/RepublicofMali]).
E.Equitycontralegem
17Theinstancesofequitydiscussedsofarfallwithinthecategoryofequityinfralegemand
equitypraeterlegem.Inbothinstances,aswehaveseen,resorttoequityandequitableprinciples
bythejudgedoesnotrequireaspecialconsentbythepartiestothedisputesinceequitysimply
correctsorsupplementsthelaw.Whenequity,instead,isusedasasystemofnormsandprinciple
thatfalloutsidethescopeofthelaworareeveninantithesistothelaw,thequestionarisesof
whetherspecialagreementisalwaysnecessarytowarrantsuchuseofequity.Fromaformalpoint
ofview,onecouldbetemptedtoconcludethataclearanswertothisquestionisprovidedbyArt.
38(2)ICJStatutewhichlaysdowntheexplicitrequirementoftheconsentofthepartiestoadispute
fortheICJtodecideexaequoetbono.But,thisprovisionalsocoversinstancesinwhichthejudge
maydecidetomakeuseofequitypraeterlegemorinfralegem,forwhichnoexplicitconsentby
thepartiesisnecessary,asisamplydemonstratedbythepracticeexaminedinthepreceding
section.Inthissense,Art.38(2)ICJStatuteisnotconclusiveindrawingalinebetweenequity
praeterlegem,ontheonehand,andequitycontralegem,ontheother.Besides,asiswellknown,
nocasehaseverbeenbroughtbeforetheICJundertheexaequoetbonoclauseofArt.38(2)ICJ
Statute,sonobodyofprecedentisavailabletohelpdefinetheroleofconsentinthistypeof
adjudication.Theanswertothisquestion,therefore,mustbemorenuancedthanasimple‘no’
basedontheclearletterofArt.38(2)ICJStatute.Firstofall,wemustrecognizethatininternational
lawtherelationshipofequitytolegalrulesdiffersfromthesamerelationshipindomesticlaw,and
willneverbeprecisely‘co-terminuswithitsroleinanynationaljurisdiction’(White).Ininternational
law,especiallycustomarylaw,legalrulesandprinciplesareverygeneralandwithanambitof
applicationthatmaybeindeterminateandadaptabletodifferentcircumstances.Thismaypermita
judgetopresentresorttoequityasasetofconsiderationsandcriteriawithinthelaworassociated
withthelaw,ratherthanoutsideorcontrarytothelaw.Second,sincecustomaryinternationallaw
isinconstantevolution,whatiscontralegematagiventimemaybecomeconsonanttothelawat
alaterstageofevolutionoftheapplicablerules.Equitymaythereforeanticipatethecrystallization
ofthelawandprovidetherationalandethicaljustificationforitstransformation.Third,sincein
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internationallawjudicialandarbitraldecisionsdonotcarrytheweightofstaredecisis,forthe
purposeofamoreprecisedefinitionofthemeaningandscopeoflegalrules,itismoredifficultto
establishwhereinagivencasetheuseofdiscretionarypowersbyajudgeconstitutesan
applicationofequitycontralegem.Severalsituationsmayillustratethecomplexityofthequestion.
18Inthefieldofthetreatmentofaliensandforeigninvestmentsitisasettledruleofinternational
lawthataStateexpropriatingforeignpropertyisboundtoprovidecompensationtothe
dispossessedownerforthevalueofthepropertytaken(Investments,InternationalProtection;
Property,Rightto,InternationalProtection).If,asoftenoccurs,thecircumstancesofthecase
dictatethatapplicationofequitymustleadtothedeterminationofanamountofcompensationthat
islessthanthemarketvalueofthepropertytaken,isthisequitycontralegemorequitywithinthe
law?Similarly,ifthecollapseoftheentireeconomyofacountryleadstothebreachofits
contractualobligationstowardsforeigninvestors,isthereferencetoequitybyanarbitratorinorder
toalleviatethestrictliabilityoftherespondentStateincontradictionwithanapplicableinvestment
treaty,anapplicationofequitableprinciplesunderlyingthelawoftreatiesoraninstanceofequity
contralegem?
19Similarly,inthefieldofhumanitarianintervention,aretheoverridingconsiderationsofhumanity
(Humanity,Principleof)andequitythatmayleadtheUnitedNationsorotherinternational
organizationtouseforceagainstaStateresponsibleforgrossviolationsofhumanrightsafactorin
theinterpretationandapplicationofthelaworadecisioncontrarytothelaw?Theanswertothis
questioncanbeextremelydifficult,bothbecauseoftheneverendingdebateoverthepermissible
exceptionstotheuseofforceunderinternationallawandbecauseofthedynamicevolutionofthe
practicetowardstherecognitionofapositivedutytoprotectvictimsofserioushumanrights
abuses(ResponsibilitytoProtect;onthisissue,seeFrancioni[2005]).However,recentresearch
suggeststhatequity—asapalliativeseriesofnormsthatcantempertherigorofstrictlaw—may
indeedhaveanimpactinthehumanitarianinterventiondebate.Ratherthanhavingrecourseto
standardsofmorality,ithasbeensuggestedthatequity–asgeneralprinciplesoflaw—mayimpact
upontheUNCharterregimeandcustomaryinternationallawnormsconcerningtheuseofforce,
allowingfora‘broadening’ofpermissibleusesofforce,inordertoincludesituationswheregross
humanrightsabusesarebeingperpetratedbyaStateagainstitsowncitizens(seeBurke245–46).
20Finally,thedeterminationofwhetherequityiscontralegemornotmaybedifficultwhenits
applicationisincontradictionwithaparticularruleoflaw,but,atthesametimeitmaybesupported
byanotherruleofpositivelaw.Thiswouldbethecaseifthevictimofaseriousviolationofhuman
rightssoughtjusticebeforethecourtsofaforeignStatewheretheruleofsovereignimmunitycould
beinvokedbythedefendantStatetodefeatjurisdiction.Accessofthevictimtoremedialprocess
couldbearguedonthebasisofcompellingreasonsofequity;butatthesametimeitcouldbe
supportedonthebasisofarestrictiveinterpretationoftheclassicruleonimmunityandonaliberal
constructionofinternationalpracticewhichfavoursthesettingasideofimmunityincasesofprima
facieviolationsofperemptorynormsofinternationalhumanrights(Iuscogens).
21Itisclearfromtheillustrationsgivenabovethatademarcationoftheuseofequitycontra
legemfromequitywithinthelaworassociatedwiththelawisextremelyproblematic,both
conceptuallyandpractically.Thisisfurtherexacerbatedbythefactthattherehavebeenfew
studiesonequity—orindeed,ongeneralprinciples—anditsroleininternationallawinrecent
decades,whichmightaddclarityhere.Thedifferenttypesofequityweareconfrontedwithin
internationaladjudicationrepresent,ratherthanseparatecategories,acontinuumalongwhichthe
internationaljudgeorarbitratorexercisesvaryingdegreesofdiscretionintheinterpretation,
integration,andcorrectionoftheapplicablerulesandprinciplesofinternationallaw.Inthiscontext,
thecharacterizationofwhetherequityiscontrarytothelawessentiallydependsonthe
constructionofthescopeandoftheevolutivedynamicsoftherelevantnorms.Thisisaneminently
interpretativeoperationthatfallswithinthediscretionofthejudge.However,thisiscertainlynotto
entirelyexcludethepotentialforequitableprinciplestoactcontralegeminveryexceptional
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circumstances,withintheframeworkofequity,quageneralprinciplesoflaw,perArt.38(1)(c)ICJ
Statute(seeBurke199–245).Suchapossibilityhasbeenraised,interalia,byJudgeHudson’s
SeparateOpinioninTheDiversionofWaterfromtheMeuse(TheNetherlandsvBelgium)(76–7).
F.EquityinTreaties
22TheneedtoreachacompromisebetweenconflictinginterestsofdifferentgroupsofStatesand
evenofdifferentgenerationshasledinthepast50yearstofrequentreferencetoequityand
equitablesolutionsinthetextoftreatiesandsometimesofsoftlawinstruments.Asnotedabove
(seesuprapara.8),theVCLTmakeseffectiveprovisionfortheuseofextraneousnorms–
potentiallyincludingequityquageneralprinciplesinArt.31(3)(c).Itwouldbeimpossibletofurnish
anexhaustiveinventoryofexplicitreferencestoequitywithintreatieswithinthescopeofthis
article.Whatfollows,therefore,isonlyasamplingoftherolethatequityplaysinsomeimportant
categoriesoftreaties,andmoreparticularlyintheareaofthelawofthesea,international
economiclaw,andinternationalenvironmentallawandsustainabledevelopment.
1.LawoftheSea
23ExplicitreferencetoequityiscontainedintheUNConventionontheLawoftheSea.The
Preamblerefersto‘theequitableandefficientutilization’oftheocean’sresources;Arts74and83
UNConventionontheLawoftheSeaprescribean‘equitablesolution’toproblemsofdelimitationof
thecontinentalshelf,areferencethat,aswehaveseen,hasspurredarobustjurisprudencebythe
ICJinthedelimitationofmaritimeboundariesbetweenadjacentandoppositecoastalStates.The
principleof‘equitablesharingofprofits’(EquitableUtilizationofSharedResources)arisingfromthe
mineralexploitationofthedeepseabedisenvisagedwithrespecttothemineralactivitiesinthe
area(Arts140,155(2),160(2),173(2)UNConventionontheLawoftheSea)aswellasinthe
continentalmarginbeyondthe200milezone(Art.82(4)UNConventionontheLawoftheSea).
Equitymustinformalsoaccessofland-lockedStatestofisheryresourcesintheexclusive
economiczonesoftheregion(Arts69andArts70UNConventionontheLawoftheSea),transfer
ofmarinetechnology,and,mostimportantly,reconciliationofconflictinginterestsofcoastalStates
andotherStatesintheutilizationoftheexclusiveeconomiczone.Evenbeforetheadoptionofthe
UNConventionontheLawoftheSea,referencetoequitycanbefoundinArt.1Conventionon
FishingandConservationoftheLivingResourcesoftheHighSeasintheBalticSeaandthebeltsas
abasisfortheapportionmentofcontributionstosupportconservationmeasures.
2.InternationalEconomicLaw
24Inthisarea,morethanasacriterionofadjudication,equityhasplayedaroleintheprocessof
lawformationandasatoolforthereconciliationofconflictingeconomicinterestsbetween
developedanddevelopingcountries.Inthe1970s,atatimewhentheUNwasstrivingto
accommodatethenewlyindependentStatesintothesystemofinternationallaw,‘equitable
principles’ofre-distributivejusticewereplacedatthebasisofthesoftlawinstrumentsdesignedto
shapetheNewInternationalEconomicOrder(NIEO).TheUNCharterofEconomicRightsandDuties
ofStates(UNGARes3281[XXIX][12December1974])refersinitspreambleto‘equitablebenefits’
and‘theneedtoestablishandmaintainajustandequitableeconomicandsocialorder’,andlistsin
Chapter1(e)‘mutualandequitablebenefits’amongtheconstitutiveprinciplesofthenewsystemof
governanceofinternationaleconomicrelations.Thesamereferencetoequitycanbefoundin
UNGAResolution3201(XXIX)of9May1974(para.4(j)).Thesesoftlawinstrumentsnever
hardenedintotreatylaw.Theirpropulsiveforceforthedevelopmentofinternationallawdissipated
withtheendoftheColdWar(1947–91)and20yearsaftertheirproclamationtheirstrong
redistributivejusticeprogrammewasreplacedbytheneo-liberalprojectoftheWorldTrade
Organization(WTO)andthenetworkofbilateralinvestmenttreatiesandregionaleconomic
integrationagreementssuchastheNorthAmericanFreeTradeAgreement(1992)andMERCOSUR.
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However,itwouldbeamistaketothinkthattheearlydevelopmentofequitableprinciplesinthe
restructuringoftheinternationaleconomicorderhadnotleftatraceinthepresentsystemof
governanceofinternationaleconomicrelations.Equityhasbeenapowerfulconsiderationinthe
softeningofthehardandfastrulerequiringthepaymentofprompt,adequate,andeffective
compensationintheeventoflarge-scaleexpropriationsofforeignproperty,especiallywhen
requiredbyoverridingconsiderationsofeconomicandsocialreform(seeAwardintheMatterof
ArbitrationbetweenKuwaitandtheAmericanIndependentOilCo[Aminoil];theSeoulDeclaration
ontheProgressiveDevelopmentofPrinciplesofPublicInternationalLawRelatingtoaNew
InternationalEconomicOrderoftheInternationalLawAssociation[ILA];andintheliterature
Francioni[1975]).Atthesametimeequityhasnowpenetratedintothefabricofpositivelaw,
governingthetreatmentofforeigninvestmentsthroughthegeneralacceptanceofthestandardof
‘fairandequitabletreatment’oftheinvestorinthepracticeofbilateralinvestmenttreatiesandin
thesettlementofrelateddisputeswithintheInternationalCentreforSettlementofInvestment
Disputes(ICSID)andotherarbitralpractice(seealsoWorldBankGroup).Asaconsequenceofthis
movementitissafetosaythattodaythefairandequitablestandardsoftreatmentofforeign
economicinterestarepartofthecustomarybodyofinternationallawandplayafundamentalrole
intheprotectionofforeigninvestorstogetherwiththetraditionalrulesofnon-discrimination(see
alsoMinimumStandards),publicinterestjustificationforatakingofforeignproperty,andthe
requirementofjustcompensationintheeventofexpropriation(forjudicialapplicationofthefair
andequitabletreatmentstandard,seeReanArbitrationunderChapterElevenoftheNorth
AmericanFreeTradeAgreement[Pope&TalbotIncvGovernmentofCanada][Awardonthe
MeritsofPhase2];foranexhaustiveandin-depthtreatmentofthisstandardaspartofgeneral
internationallaw,seeTudor;fortheapplicationofequityasageneralprinciplecapableof
guaranteeingafairsolutioninfralegemindisputesconcerningtherepaymentofforeigndebts,see
theCaseconcerningtheLoanAgreementbetweenItalyandCostaRica[DisputeArisingundera
FinancingAgreement][paras69–71]).
3.EnvironmentalLawandSustainableDevelopment
25Thedevelopmentofinternationallawinthisareathroughtheadoptionofanextensivebodyof
treatylawandofwritteninstrumentsofsoftlawhaspermittedthetransformationofgeneral
principlesofenvironmentalprotectionintoprecise,technicalstandardsapplicabletosuchdiverse
fieldsastransboundarypollution,speciesconservation,rationalutilizationofnaturalresources,
andprotectionoftheglobalenvironment(Environment,MultilateralAgreements).Inthiscontextit
mayappearincongruousthatequityshouldplayanimportantroleintheprocessofformationand
applicationoflegalrules.Instead,evenacursorylookatthecontentoftherelevanttreatytexts
revealsanextensiveandsystematicuseofequityandequitableprinciples.Thereasonsforthis
layessentiallyina)theneedtobaseenvironmentalgovernanceonforward-lookingandpolicyorientedregulation,ratherthanonafixedsetofrightsandobligationsoftheparties,b)the
requirementthatenvironmentalprotectiontakesintoaccounttheprofoundeconomicand
technologicaldisparitiesbetweendevelopedanddevelopingStates,andc)theconsequentneed
tolookforareasonablecompromisebetweenconflictinginterestsasabasisfortheconsenttobe
boundbytreatyobligations.Itwouldbeimpossible,withinthelimitedscopeofthisessay,toprovide
adetailedandexhaustiveinventoryofthegreatvarietyofreferencestoequityinthisareaof
treatypractice.Whatfollowsisonlyanillustrationofthedifferenttypesofequityrecurringinthree
importantareasofenvironmentallaw:i)conservationandsustainabledevelopmentofshared
resourcesofawaterbasin,ii)conservationandmanagementofglobalresources,andiii)equitable
sharingofbenefitsderivedfromtheexploitationofnaturalresources.
26AnimportantexampleofthefirstcategoryisprovidedbyArt.5ConventionontheLawofthe
Non-NavigationalUsesofInternationalWatercourses,whichprescribesthatriparianStates‘shallin
theirrespectiveterritoriesutilizeaninternationalwatercourseinanequitableandreasonable
manner’andthatthey‘shallparticipateintheuse,developmentandprotectionofaninternational
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watercourseinanequitableandreasonablemanner’.Art.5ConventionontheLawoftheNonNavigationalUsesofInternationalWatercoursesindicatesthesubstantivecriteriaforequitable
utilization,includingthegeographical,andnaturalfactors,thesocialandeconomicneedsofthe
Statesconcerned,thedependenceofthepopulation,andtheavailabilityofalternativestothe
planneduseofthewatercourse.Itisclearthatinthisformulationtheconceptofequityismuch
broaderthanthepurenaturalandgeographicalconceptadoptedbytheICJinitsmaritime
delimitationjurisprudence.Asimilarapproachcanbefoundinsomeregionaltreaties,suchasthe
ConventiononCo-operationfortheProtectionandSustainableUseoftheDanube(DanubeRiver),
theAgreementontheCo-operationfortheSustainableDevelopmentoftheMekongRiverBasin
(MekongRiver),theProtocolonSharedWatercourseSystemsintheSouthernAfricanDevelopment
Community(SADC)Region,andintheConventionontheProtectionandSustainableDevelopment
oftheCarpathians(seeOkavangoRiver;OrangeRiver;ZambeziRiver).
27EminentexamplesofthesecondcategoryoftreatiesaretheUNConventionontheLawofthe
Sea(seepara.20above),Arts3,4,and11UNFrameworkConventiononClimateChange(Climate,
InternationalProtection),andtheUNConventiontoCombatDesertificationinCountries
ExperiencingSeriousDroughtand/orDesertification,particularlyinAfrica(Desertification).
28Butthemostsignificantreferencetoequity—atleastforpracticalpurposes—istheonefoundin
thethirdcategoryoftreatieswhichentailtheapplicationoftheprincipleofequitablesharingof
benefitsderivingfromtheexploitationofbiologicalresources.Thisprincipleiscontainedinthe
ConventiononBiologicalDiversity,whichreaffirmsthesovereignrightsofStatesovertheirown
biologicalresources,butalsorecognizestheconcomitantprincipleof‘fairandequitablesharingof
thebenefitsarisingoutoftheutilizationofgeneticresources’(seeArts1,8,15,19Conventionon
BiologicalDiversity).Thissolutionisnotfreefromambiguitysinceitleavesuncertainwhether
equityistobeunderstoodasinfralegem,ieoperatinginthecontextofapplicableprinciplesand
rulesofinternationallaw,includingtherulesonthetreatmentofaliensandtherulesgoverningthe
statusofinternationalpublicgoods(CommunityInterest),oroutsidethelawasanautonomousand
unstructuredsourceofprincipleswhichareassumedtoinspirecontractualarrangements(fora
criticalevaluationofthisapproach,seeFrancioni[2006];forapositiveevaluationofthisreference
toequity,seePavoni).
G.Conclusions
29Althoughequitydoesnotconstituteasourceofinternationallawinaformalsenseandwithin
themeaningofArt.38(1)ICJStatute,itsuseininternationaladjudicationandinthedevelopmentof
treatylawshowsthatinasubstantivesenseithasbecomeestablishedasamethodof
adjudication,evenoutsidethehypothesisofexaequoetbonoauthorizationunderArt.38(2)ICJ
Statute,andasanelementintheprogressivedevelopmentofinternationallaw.First,itmayinfuse
basicconsiderationsoffairnessandjusticeintothefabricofthelaw,soastoadjustthegeneral
andabstractrulesofinternationallawtothespecificitiesofeachindividualcase.Second,itmay
haveanintegratingfunctioninthesenseoffillinggapsinthelawbyresortingtoequitable
principlescapableofjudicialapplicationpursuanttoArt.38(1)(c)ICJStatute.Third,itmayeven
performacontralegemroletotheextentthatitisusedtoaccompanyorsupportaprocessof
transformationofcustomaryinternationallawunderthepressureofnewsocialnecessities,thus
becomingacatalystforchangeandmodernizationofthelaw.Itsfrequentuseininternational
adjudicationandincontemporarytreatypracticealsoshowsatendencytowardsastructuringof
theconceptofequityaspartofapplicablelawandnotasaseparatesystemofconceptsand
principles.Thisisimportantatatimewheninternationallawhasceasedtobeasystemofnegative
obligationsofpurecoexistenceamongStatesandhasbecomeamuchmorecomplexsystemof
positiveobligationswhosenuancesincontentandscopecanoftentobecapturedbyaproperuse
ofequityandequitableprinciples.
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