Equity

It is not the same as equitable principles. This is the distinction the whole chapter exists for. When the Court applies equitable principles in a maritime delimitation it is applying the law, because the law of delimitation itself requires an equitable result. It is not deciding ex aequo et bono, and it says so.

Where equity actually does its work: the sea

Maritime delimitation is where equity has been most important, and the two cases MU names are the authorities.

The North Sea Continental Shelf cases, ICJ Reports 1969, page 3, decided 20 February 1969, are worked in full in [Delimitation of Maritime Boundaries] and in [Custom]. On equity, what matters is the Court's conclusion: having rejected equidistance as neither a treaty obligation binding Germany nor a rule of custom, it held that the boundary lines were to be drawn by agreement between the parties and in accordance with equitable principles, taking account of the relevant circumstances, and that the parties were under an obligation to negotiate meaningfully rather than to go through a formal process. Equity there was not an escape from the law; it was the content of the applicable rule.

Continental Shelf (Tunisia/Libyan Arab Jamahiriya), ICJ Reports 1982, page 18, decided 24 February 1982, shows what that means in practice. By special agreement the parties expressly asked the Court to take account of equitable principles, the relevant circumstances characterising the area, and the new accepted trends at the Third UN Conference on the Law of the Sea. The Court found a single continental shelf common to both States, so physical criteria of natural prolongation could not determine what belonged to each, and it applied equitable principles to the relevant circumstances: the land frontier at Ras Ajdir, the conduct of the parties in granting petroleum concessions, the change of direction of the Tunisian coast at the Gulf of Gabes, and the Kerkennah Islands. It used proportionality between the shelf allotted and the length of the relevant coast as a test of equity, and described a two-segment line.

The point to take from both. The parties in Tunisia/Libya asked for equitable principles and did not confer power to decide ex aequo et bono. The Court decided according to law throughout. That is the clearest possible demonstration that equitable principles and ex aequo et bono are different things.

Article 83(1) of the Convention on the Law of the Sea now states the rule in treaty form: delimitation of the continental shelf between States with opposite or adjacent coasts shall be effected by agreement on the basis of international law in order to achieve an equitable solution. Article 74(1) says the same for the exclusive economic zone.

Other places equity appears

Equitable use of shared resources. International watercourse law is built on equitable and reasonable utilisation, which is an equitable standard rather than a mechanical rule.

The common heritage of mankind, in [The Common Heritage of Mankind], carries an explicitly equitable requirement: article 140 of the Convention on the Law of the Sea provides for the equitable sharing of financial and other economic benefits derived from activities in the Area.

Equitable geographical distribution of seats in international organs, which appears throughout the Charter, is a different use of the word: it is a political standard for composition and not a rule of decision.

A worked example

State R and State S have adjacent coasts. Neither has a delimitation treaty with the other. State R proposes a strict equidistance line. State S points out that its coast is concave, so equidistance would cut it off a short distance from shore, and asks the tribunal to do what is fair.

Can the tribunal simply do what seems fair? No, not in that sense. It cannot decide ex aequo et bono without the agreement of both parties, and State R has not agreed.

Must it then apply equidistance? No. The North Sea cases hold that equidistance is neither inherent in the concept of the shelf nor a rule of custom, and if both States are parties to the Convention on the Law of the Sea then articles 74 and 83 require delimitation by agreement on the basis of international law in order to achieve an equitable solution.

So what does it do? It applies equitable principles as the law requires, identifying the relevant circumstances of this area as the Court did in Tunisia/Libya: the general direction of the coasts, the concavity, any islands, the conduct of the parties, and any resource activity. It will check the result against proportionality between the areas allotted and the lengths of the relevant coasts.

What has the tribunal done, in terms of this chapter's classification? Equity infra legem. The applicable rule itself commands an equitable result, so applying equity is applying the law. Nothing has been set aside, and article 38(2) has not been touched.

Distinctions table

What it does NOT mean

Equity here is not the English law of equity. It has nothing to do with the Court of Chancery, trusts, specific performance or injunctions. The word means fairness.

Equitable principles are not ex aequo et bono. The Court said so and decided Tunisia/Libya on that footing. A candidate who writes that the Court decided the continental shelf cases ex aequo et bono has made the central error of the topic.

An equitable result is not an equal one. The Court in the North Sea cases expressly rejected the doctrine of the just and equitable share: its task was to delimit an area already appertaining to a State, not to apportion one, because the coastal State's rights exist ipso facto and ab initio.

Equity is not a source in article 38(1). It appears only in article 38(2), and its everyday operation is inside the other sources rather than alongside them.

Limits and criticism

It is unpredictable. A rule that says the result must be equitable, taking account of all the relevant circumstances, gives a tribunal very wide latitude and gives the parties' advisers very little to work with. The law of maritime delimitation has spent forty years trying to make the standard more predictable, which is why courts now use a structured three-stage method rather than an open weighing of circumstances.

It can conceal a decision made on other grounds. Equity requires no showing of practice or opinio juris, and a tribunal that wants a particular line can usually find circumstances to justify it.

Article 38(2) is a dead letter. A power never once exercised in more than a hundred years tells you something: States submit disputes to a court precisely because they want the law applied, and a State that would accept a decision on fairness alone would generally settle instead.

Quick revision

Three kinds. Infra legem, within the law: fair application and interpretation, needs no authority. Praeter legem, beside the law: gap-filling, overlapping with general principles. Contra legem: displacing a rule, permitted only under article 38(2) with the agreement of the parties.

Article 38(2): the Court may decide a case ex aequo et bono if the parties agree. Never used, before either the Permanent Court or the present Court.

Equitable principles are not ex aequo et bono. In North Sea Continental Shelf (ICJ Reports 1969, page 3) delimitation was to be by agreement in accordance with equitable principles and the relevant circumstances, with an obligation to negotiate meaningfully. In Continental Shelf (Tunisia/Libyan Arab Jamahiriya) (ICJ Reports 1982, page 18) the parties expressly asked for equitable principles and did not confer power to decide ex aequo et bono; the Court weighed the relevant circumstances and used proportionality as a test.

UNCLOS articles 74(1) and 83(1): delimitation by agreement on the basis of international law in order to achieve an equitable solution.

An equitable result is not an equal share: the North Sea cases rejected the just-and-equitable-share doctrine because shelf rights exist ipso facto and ab initio.

Test yourself

1. Distinguish equity infra legem, praeter legem and contra legem.

Infra legem operates within the law: the tribunal applies existing rules and uses fairness to choose among permissible constructions and to apply the rule to the facts. It needs no special authority. Praeter legem operates beside the law, filling gaps the rules leave, and overlaps with the general principles of law. Contra legem would displace a rule because applying it would be unfair, and a tribunal may do that only under article 38(2) of the Statute, which requires the agreement of both parties.

2. What is ex aequo et bono, and how often has it been used?

It is the power in article 38(2) to decide a case according to what is equitable and good rather than according to the existing rules, conferred only if the parties agree. It has never been used, in more than a century of the Permanent Court and the present Court, because States that submit a dispute to a court want the law applied and would otherwise settle.

3. "The International Court decided the continental shelf cases ex aequo et bono." Correct this statement.

It is wrong, and the error is the central one in the topic. In both the North Sea cases and Tunisia/Libya the Court decided according to law. The law of maritime delimitation itself requires that the result be equitable, so applying equitable principles is applying the law, not departing from it. In Tunisia/Libya the parties expressly asked the Court by special agreement to take account of equitable principles, the relevant circumstances and the new trends at the Third UN Conference, and expressly did not confer power to decide ex aequo et bono. Articles 74(1) and 83(1) of the Convention on the Law of the Sea now state the rule as delimitation by agreement on the basis of international law in order to achieve an equitable solution.

4. Does an equitable delimitation mean an equal one?

No. In the North Sea cases the Court rejected the doctrine of a just and equitable share, holding that its task was to delimit areas already appertaining to each State and not to apportion them de novo, because the rights of the coastal State in the shelf constituting the natural prolongation of its land territory exist ipso facto and ab initio by virtue of its sovereignty over the land. Proportionality between the areas allotted and the lengths of the relevant coasts is used, as in Tunisia/Libya, as a test of the equity of a result, not as a rule of entitlement.

5. Why is equity criticised as a basis for decision?

Because it is unpredictable and hard to police. A rule requiring an equitable result in the light of all the relevant circumstances gives a tribunal wide latitude and gives advisers little guidance, and because equity requires no proof of practice or opinio juris, a tribunal that has decided on other grounds can usually find circumstances to support it. The response has been to structure the discretion: courts now approach maritime delimitation through a defined sequence rather than an open weighing.

6. Is equity a source of international law?

Not under article 38(1), which lists conventions, custom, general principles and, as subsidiary means, judicial decisions and writings. Equity appears only in article 38(2), as a power to decide outside the law with the parties' consent. Its everyday operation is inside the other sources: it guides the application of rules, it fills gaps in a way that shades into the general principles of law, and in some fields, above all maritime delimitation and shared resources, the applicable rule itself demands an equitable result, so that applying equity is applying the law.