Conclusion

The book’s concluding chapter summarises its main findings and arguments. The book has tried to make sense of the legal concept of equity as it operates in the international law of the 21st century, setting it on a new basis and dealing with some common misconceptions about it. The thrust of its argument is that equity is a legal concept and a source of international law whose reach stretches beyond what has previously been conceded. Equity contributes to the development of international law and, as international law grows, the value of equity grows with it. By definition circumstance-specific, equity must remain flexible in order to fulfil its function qua justice. As time goes by, equity will still inform new international law and it will continue to be relevant, as an imperative of law as justice that international courts and tribunals are bound to apply.

Origins of Equity

Equitable considerations have been present in human societies for unfathomable aeons. From ancient Greece and Rome to modern times, through ecclesiastical law and the medieval English Chancery, equity has introduced considerations of fairness in legal thought and has helped mitigate the harshness of draconian laws. What is considered equitable has varied over time, with the equitable innovations of the past typically becoming the hard law of today. The purpose of the chapter is to show equity’s continuity in time and across legal systems, as a stepping stone to the argument presented later in the book that equity is a source of international law. The chapter explains that the distinct ways in which we make sense of equity owe something to its historical evolution in our respective legal systems. Ultimately, the chapter highlights equity’s journey from municipal legal systems to international law.

Jurisdiction ex aequo et bono

If court statutes and arbitration rules often provide for ex aequo et bono adjudication, international adjudicatory bodies rarely use it. Less successful than its predecessor, absolute equity, ex aequo et bono adjudication is limited in contemporary times to less than a handful of investment arbitration cases. The chapter considers ex aequo et bono in light of the jurisprudence of international courts and tribunals, it explores the types of dispute for which an ex aequo et bono mandate is suitable and its compatibility with the judicial function. The chapter argues that ex aequo et bono powers must not be conflated with equity that international courts and tribunals can apply anyway, that ex aequo et bono adjudication is legal adjudication, and it shows that on the rare occasions when tribunals have been granted ex aequo et bono powers, they have tended to interpret them narrowly.

Traditional Typology of Equity

The chapter critically assesses the traditional distinction between three types of equity: equity infra, praeter, and contra legem. It argues that while this taxonomy offers a conceptual framework to help comprehend three roles that equity can assume, it remains a heuristic construct; strict divisions between different kinds of equity are unsustainable. In addition, the traditional breakdown of equity fails to account properly for the relationship between contra legem equity and law. Against this background, the chapter reviews a classic example of contra legem equity in Antigone and revisits the concept. It concludes that ultimately the most important limitation of the tripartite typology is that it does not account for the fact that equity may never truly function contra legem, since equity is an element of law.

Equity before International Courts and Tribunals

Equity first made its way in international decision-making through claims commissions and early arbitration tribunals, whereupon it started to be incorporated in the jurisprudence of international courts. Today, equity in international law is often associated with ICJ judgments, especially those involving maritime boundary delimitation. Recourse to equitable considerations in this field evolved over time, hardening into something very much approximating a method of equitable delimitation. However, iconic a status though the treatment of equity in the delimitation of maritime boundaries may have reached, equity is relevant to all of international law. In effect, some of the most interesting applications of equity have been made by interstate tribunals deciding other types of disputes. The chapter reviews ‘classic’ pronouncements on equity by international courts and tribunals and documents this jurisprudential history that conditions how we perceive equity in international law.

Variations on Equity and Related Concepts

The chapter analyses variations on equity and related concepts that originate in equity. In particular, it studies equality, reasonableness, estoppel, acquiescence, good faith, unjust enrichment, the clean hands doctrine, abuse of rights, and proportionality. The chapter probes these concepts to demonstrate that equity lies deep in the international law mainstream and is applied even if we are not constantly aware of this. The chapter further aims to topple the myth that some forms of equity, notably contra legem equity, are only applied if the parties agree. It suggests that some such variations on equity or equitable principles, notably the clean hands doctrine and abuse of rights, can be seen as permissible applications of contra legem equity without the parties’ agreement – with the caveat that equity cannot truly exist contra legem.

Power to Resort to Equity

The chapter documents the complex relationship between, on the one hand, equity and international law and, on the other, principles and rules, and it discusses equity as a source of international law. The thrust of its argument is that equity is a source of international law, which means that international adjudicators have the power to apply it. While conceding that the felicitous conjunction of law and equity presents a formidable challenge, the chapter suggests that equity can only be conceived as forming part of the law. After discussing equity embedded in conventional law, the chapter turns to customary international law, general principles of law, and general principles of international law. It puts forward the argument that equity is a general principle of international law of a customary law nature, having mutated from a general principle of law through its repeated use at the international level.

Introduction

The book’s first chapter introduces the concept of equity in international law, with an emphasis on the various attempts that have been made to define it and its significance for contemporary international law. It gives an overview of one of the most controverted discussions about equity, and one that remains at the heart of the book, concerning the relationship between equity, law, and justice. This introductory chapter further presents the book’s overall purpose and main arguments; it explains the coverage of international courts and tribunals and of specialised fields of international law, and it outlines the book’s structure and chapters.

Equity, Compensation, and Costs

Just as equitable considerations can inform a court or tribunal’s decision in the early phases of the adjudicatory process, so equity may have a role to play in fixing the amount of compensation, in allocating costs, and in deciding whether to grant security for costs. The chapter proceeds in two parts. First, it considers equity in the reasoning of international courts and tribunals leading to the award of compensation. Second, it studies the role of equity in decisions relating to costs in investment arbitration – notably in decisions on the apportionment of costs between the disputing parties and on security for costs, a provisional measure in whose application equitable considerations are noticeably prominent.

The Purpose of Equity

‘The way is equity, the end is justice’, wrote the umpire in the Aroa Mines case. The chapter probes the ethical foundations of equity in international law and argues that the overarching purpose of equity is to do justice. In this light, it surveys equity as corrective, distributive, and supplementary justice. Under the heading of corrective justice, the chapter canvasses equity as individualised justice and as justice that tempers the rigour of the law. Distributive justice is conceptualised in relation to the allocation of resources and the sharing of benefits and burdens, the common heritage of mankind, intergenerational equity, and equitable representation in the composition of international bodies. The chapter further reviews equity as supplementary justice, when legal rules are absent. The analysis shows that the different roles of equity as justice overlap and stresses that justice provides the backbone and rationale for the broader need for equity.