Ex aequo et bono (Equity)

Article 38 of the Statute of the ICJ lists ex aequo et bono as an alternative basis for a decision by the Court in place of the normally
employed legal rules. The Court can decide a case submitted to it ex aequo et bono (in justice and fairness) only if the parties agree
thereto. Ex aequo et bono is somewhat analogous to but not exactly the same as the Common Law concept of equity. It is broader
than equity and gives the Court greater power than the latter. It allows the Court to decide a case on considerations other than legal
rules, or even in contrary to these rules, if it sensed that justice can be served thereby.[16] Thus the term ex aequo etbono means
justice and fairness or equity.
Neither the International Court of Justice nor its predecessor, the Permanent Court of International Justice, has been called upon to
decide a case ex aequo et bono, although principles of equity have been applied by these courts in some cases.[17] The ICJ in
the North Sea Continental cases (1969) directed the delimination between the parties (West Germany, Holland and Denmark) in
accordance with equitable principles.[18] The PCIJ in the Diversion of Water from the Meuse River case (1937) applied principles of
equity after considering them as part of the International Law which it should apply.[19] Moreover, international arbitral tribunals have
resorted to the principles of equity in several cases.
Despite the application of the principle of equity by international courts, the existence of equity as a separate and distinct source
of law is highly controversial. Some regard equity as a source of International Law, and apply it as distinguished from law; however,
they often appeal to natural law in order to strengthen their arguments.[20] Thus to them the three terms equity, justice and natural
law tend to merge into one another. During the Sixteenth and Seventeenth Centuries natural law was a major source of International
Law. In the Nineteenth and Twentieth Centuries arbitrators have often been authorized to apply justice and equity as well as
International Law; such authorization were more common before 1920 than they are today.
Other scholars do not recognize equity as a separate and distinct source of law; they regard the principles of equity as part of the
general principles of law that are common to all national legal systems.[21]
Whatever the position may be, it is doubtful whether equity form a source of international law. It cannot be assumed that a judge
uses equity as a source of law every time he describes a rule as equitable or just. Strictly, equity cannot be a source of law; yet it
may play an important role in supplementing the law or may appear as a part of judicial reasoning.[22] A judge or arbitrator can always
use equity to interpret or fill gaps in the law, even when he has not been expressly authorized to do so. But he may not give a
decision ex aequo et bono unless he has been expressly authorized to do so.[23]

Source: PIL by Dr. Walid Abdulrahim