Equity in International Legal Practice
4
Equity in International Legal Practice
I. INTRODUCTION
THE PRECEDING CHAPTER demonstrated that while equity as a concept is difficult to define in a manner that describes its operability in every legal system in which it is found, some conception of equity is clearly detectable in a broad majority of national legal systems. Since equity is generally a flexible notion, and is comprised more of principles than of strict rules – its function in many instances being indeed to soften the rigour of strict rules – one would suppose that the equitable corpus has a strong claim to be considered as part of the ‘general principles of law recognised by civilised nations’, that is the third source of international law (though there are those who have posited that the source of international equity may equally reside in customary international law1), and therefore a veritable wellspring of international legal norms. However, before reaching such a bold conclusion, we must first determine whether and to what extent such an interpretation of the role of equity has found favour with the judges of the International Court of Justice and its predecessor, the Permanent Court of International Justice. The reason that I have chosen the practice of the international courts system as a barometer for equity’s reception into international law is relatively simple, namely that it represents the only practical means of determining whether equity occupies a place in the international legal system, in the absence of an accepted test for the existence of general principles. In treaty law, references to equity – outside certain specialised domains such as the law of maritime delimitation2 – are scarce, and certainly have little effect upon general international law concerning the use of force, which is the topic upon which we are attempting to shed some new light. As regards international custom, it would seem that attempting to distinguish whether States had in fact had the opinio iuris that they were acting in accordance with the general principles of equity rather than on the basis of any other international legal norms would be a difficult thing to determine. States are not in the habit of affirming such actions. This may well be because equity, and indeed the entire general principles category, is something which is shrouded in uncertainty. There is no doubt that it represents an international legal source, but it is one that is viewed as somewhat obscure, somewhat indeterminate and certainly somewhat difficult to accurately define. Therefore, where there is an option, States will attempt to place themselves upon surer ground, as it were, by referring to treaty or customary international law in order to justify their actions, since the grounds for determining the validity of treaty and custom are clear and precise.
Indeed, the test for determining the validity of general principles has never been made entirely clear. While it is evident that there must be some acceptance of such principles by a plurality of States for them to be considered, it is unclear how large a number of States must accept such principles, and to what extent such an acceptance must be uniform. If two States recognise the doctrine of abuse of rights as a general principle, for example, but do so to different extents and through different legal modalities, can this be used as evidence of widespread acceptance of the same principle? This difficult situation has been compounded by the failure of the International Court of Justice to furnish forth a concrete test for the susceptibility to transposition and applicability of domestic general principles in international law. However, the Court has made some vague pronouncements, as noted in chapter two, as to the suitability of well-known, long-standing principles for reception into international law. While this does not provide us with a concrete test per se, it does offer a certain modicum of guidance, a road sign to our final destination, if you will. In addition, a limited number of PCIJ and ICJ cases feature specific pronouncements by judges, either in judgments proper or in dissenting or separate opinions, affirming the existence and reception of certain general principles, including principles of equity, in the international legal order. Having examined the comparative reception of equitable principles in domestic legal systems in the preceding chapter, it now remains to determine the extent of their existence in the international legal sphere.
In conducting this examination, it is wise to remind ourselves of the conclusions reached in chapter two, namely that international courts are slow to make explicit reference to any general principles, and that such reference is likely to be found in dissenting or separate opinions. Furthermore, even when judges do refer to general principles, they avoid speaking concretely of the general principles category consecrated in Article 38(1) of the ICJ Statute, rather couching such references in similar terminology, speaking of well-accepted rules and so forth. This reflects a trend within the Court’s judgments to avoid grappling with the general principles category, as well as an aversion to a non-purely voluntaristic conception of international law, and further suggests that when judges can solve a problem in a satisfactory manner without reference to this particular source of law, they will probably do so. Recognition of the existence of the general principles category by the Court in its judgments is, of itself, uncontroversial, but the usage of such general principles as a legal basis on which to found a judgment is something that the Court is far more reluctant to do. Nonetheless, having examined the comparative modalities of equitable reception in national legal systems, spotting equitable principles creeping into the Court’s reasoning, even by the back door, as it were, should be considerably easier.
Since reference to general principles is so rare from the ICJ, reference to equitable general principles, a sub-set of the former, will be even rarer. Not all general principles are equitable in nature. Nonetheless, many are ‘borderline’, that is, while they are not traditionally associated with equity stricto sensu, they have a net effect that leads to the realisation of substantive justice by rendering the positive law more flexible. The individual effect of any one principle in isolation may be minor, but the potential for application of a series of equitable principles together certainly exists. Despite the relative paucity of references to general principles of law (and their frequent couching in terminology which does not make direct reference to Article 38(I) of the ICJ Statute), it is nonetheless essential to our present study to undertake a thorough examination of all ICJ and PCIJ cases which make reference to the third source of international law, however obliquely.3 This chapter will, in effect, be dedicated to determining the number, size and strength of the ‘building blocks’, as it were, upon which any ‘equitable theory of humanitarian intervention’ must necessarily be grounded.
II. EQUITABLE GENERAL PRINCIPLES IN THE JUDGMENTS OF THE WORLD COURT
For expediency’s sake, since the same, or similar, principles have arisen before the Permanent Court of International Justice and before the ICJ, I shall dispense with the division of this study into two time periods. As I have already discussed, the World Court was the sole organ of the League of Nations that was left substantially unchanged during the changeover to the United Nations framework. This may be held up as evidence of broad satisfaction with the Court’s machinery. It is further germane to highlight once again that Article 38, the sources of law clause in the Statute, was left basically unaltered. Therefore, the principal sources to which the Court was to refer remained international treaties, customary international law and, once again, ‘the general principles of law recognised by civilised nations’. While it is evident that the advent of the United Nations Charter brought with it a seismic effect upon the corpus of international treaty law, and to some extent customary international law (particularly as regards the use of force by States), it is also clear that the effect which the new machinery had upon the third source of international law – general principles – was minimal. Aside from a curtailing of the principle of self-preservation, the collection of general principles existing as international norms remained broadly constant. If we consider the evidence presented in chapters two and three on the origin of these general principles, such a position makes complete sense. General principles as an international legal source derive from general principles that are found in a broad plurality of developed legal systems of States. They apply generally, that is regardless of the treaties or contracts, or indeed of the other sources of law, around them. Therefore, while reference to a pre-UN Charter era might seem, on the face of it, mildly illogical when trying to devise solutions to problems arising from the structure and rules of the UN Charter itself, this is not the case. In fact it is both highly logical and absolutely necessary to take cognisance of any and all references to equitable general principles contained in the judgments of the Permanent Court, particularly since, pre-Second World War, there seemed to be, on the part of the Court, a somewhat less marked aversion to at least quasi-openly dealing with the general principles category in pronouncing upon legal disputes. Therefore, our study shall focus upon the ‘World Court’, used as a general term to denote the PCIJ and ICJ together.
When examining the deliberations of the Advisory Committee of Jurists established to draft a Statute for the Permanent Court, it became evident that some broad conception of equitable principles had been generally agreed upon by the members, although the extent to which equity could be relied upon in and of itself to decide legal problems was a source of some dispute, and the question was left open, with the ‘general principles’ formulation used instead, with equity a presumed sub-category of general principles.4 Nonetheless, it became evident that, although certainly not co-terminus with its role in any one national jurisdiction, equity had then been somewhat consecrated as a composite element of one of the sources of international law.5 This was shown to be no hollow sop to common lawyers, when in the following years the Courts, first the PCIJ and later the ICJ, developed their interpretation of the conception of equity to be applied in concrete cases. According to Article 38 of the ICJ Statute, such international judgments are themselves a subsidiary source of international law, making them particularly useful for the purpose of determining the boundaries of a category as uncertain as general principles.
Such determination of the normative content of equity was both a necessary and a difficult task for the Court. As we have seen, resort to general principles was generally accomplished ‘by the back door’, meaning that any reference to equity would have to be somewhat less than overt, for fear of charges of judicial prevarication, amongst other things. This was clearly an important consideration for the Court, and also for many leading authors. Elihu Lauterpacht, for example, attempted to distinguish legally legitimate and illegitimate uses of the terms ‘equity’ and ‘equitable principles’, terming impermissible usages as ‘elements in the legal decision which have no objectively identifiable normative content. They are … virtually synonymous with “fair” or “reasonable”’. Lauterpacht insisted that such (illegitimate) usages of equitable terminology must be firmly distinguished from (legitimate and normatively sound) equity and equitable principles as part of international law. This was important for the purposes of clarity as regards legal scholarship and textbooks, but obviously still more so as regards the judgments of the ICJ, given that the relative paucity of judgments meant that any slip-ups in the usage of equitable terminology could have significant repercussions regarding the interpretation of the normative content of general principles of law.6 Lauterpacht’s fears of subjective and inconsistent application of equity in international fora were well founded. While such poorly-grounded usages of equity have not frequently surfaced in the World Court, it is perhaps germane to draw attention to the perils of judicial prevarication in other fora. A celebrated example of this occurred in the Sheik of Abu Dhabi case of 1951.7 Here, the arbitrator, Lord Asquith claimed he could not address the choice of law conflict which arose in the case, since
no such law [of Abu Dhabi] can reasonably be said to exist … the Sheik administers a purely discretionary justice with the assistance of the Koran; and it would be fanciful to suggest that in this very primitive region there is any settled body of legal principles applicable to the construction of modern commercial instruments. 8
Therefore, having circumvented his own unfamiliarity with the local law, and perhaps to avoid a non liquet, Asquith applied his own law, this being the system he was most familiar with, namely the common law, and with it a broad conception of all the equitable principles contained therein. Although he admitted that English municipal law could not possibly be applicable in the case, he held that ‘some of its rules [were] so firmly grounded in reason as to form part of this broad body of jurisprudence, this “modern law of nature”’.9
Judgments such as that proposed by Asquith were rare, but they were enough to render many international lawyers distrustful of equity and general principles. The problem of the variation of notions of justice and morality throughout different jurisdictions was well documented.10 Resort to anything beyond the black letter was viewed with suspicion, and it was therefore necessary for the World Court to carefully buttress many of its references to equity in a broadly-based recapitulation of comparative legal history to avoid charges of partiality or subjectivity. Indeed, such buttressed argumentation was what the Court resorted to on its ‘good days’. In other instances, the Court, in less bullish mood, but needing nonetheless to use equitable principles, would resort to such principles without discussion of what they were and would attempt to justify its decision on the basis of some other normative source. As Weil notes, throughout its history, ‘la cour a eu la sagesse de ne pas s’aventurer dans de savants dissertations sur la distinction entre droit, justice et équité’ (the court had the wisdom not to venture into scholarly essays on the distinction between law, justice and equity),11 since a profound discussion of such relationships would require a degree of subjective assessment ill-at-ease with a consensualist conception of international law.
A. Good Faith, Clean Hands and Equitable Maxims – The Meuse Case
The case that came before the PCIJ in 1937 involving the diversion of water from the river Meuse (in French, or Maas in Dutch) is often cited as an important moment for equity in the history of international legal practice.12 The facts of the dispute are perhaps relevant in order to understand the disputed legal issues, so I shall proffer a brief summary.
The Meuse is an international waterway, which rises in the mountains of North-Eastern France and which flows through Belgium, into the Netherlands, into the North Sea, forming a common delta with the Rhine. Two sections of the river form the boundary between Belgium and the Netherlands. Since the Meuse is a rain-fed river, river discharges may vary considerably, and periodic water shortage has long been considered an important international issue. In the mid-nineteenth century, various conflicts over the distribution of the river’s water arose between Belgium and the Netherlands. These conflicts were caused by the construction of a system of irrigation canals in the district of Campine in Belgium, which were linked to the (already existing) Zuid-Willemsvaart canal. Since the Zuid-Willemsvaart canal was fed by the water from the Meuse, these new canals also took water from the river.13 The construction of the new canals caused detriment to the Netherlands in three discernible ways. First, the large volume of water which was required to continuously feed the new canals caused an excessive current in the Zuid-Willemsvaart canal, which hindered navigation. Secondly, the reduced water level in the Meuse – an immediate impact of the new canals’ construction – rendered the Meuse itself significantly less navigable, and finally, the irrigation projects within the Campine district caused flooding in some parts of the southern Netherlands. Belgium and the Netherlands made various attempts to resolve the problems, and in 1863 concluded a Treaty, which established a legal regime governing the extraction and usage of water from the Meuse by the riparian States.14 Importantly, this Treaty in its first Article provided for the construction of a new intake near Maastricht, on Dutch territory, which would constitute ‘the feeding conduct for all canals situated below that town and for irrigation in the Campine and in the Netherlands’. The Treaty also provided for the raising of the water level in the Zuid-Willemsvaart canal so as to decrease the speed of currents, and the completion of some infrastructural improvements aimed at ameliorating the navigability of the joint section of the Meuse. Finally, the Treaty regulated the volume of water to be taken at the feeders governed by the Treaty depending on both the time of the year and the water level in the river.15 This Treaty kept things relatively stable between the two States until 1921 when they both embarked upon further canal-building projects. In 1925, the two States signed a new agreement, designed to settle all differences concerning the construction or the enlargement of new canals. The Netherlands First Chamber (Parliament), however, refused to ratify the agreement. Following this, the Netherlands began construction of the Juliana canal, the Bosscheveld lock and the Borgharen barrage, while Belgium began to construct the Albert canal, a barrage at Monsin and a lock at Neerhaeren. The Netherlands seized the Permanent Court of International Justice with a unilateral application under Article 36(2) of the Court’s Statute (compulsory jurisdiction).
The Netherlands sought relief in the form of an injunction – a classic equitable remedy – and argued that the selection of the site for the feeder line in its territory (at Maastricht) had, from the signing of the Treaty, placed the parties in a position of legal inequality. However, the court quickly rejected this contention. Both Graver and Rossi have noted that in doing so, the Court was upholding the equitable principle that ‘equity delights in equality’ or ‘equality is equity’.17 Anzilotti J went still further in a dissenting opinion, stating that the principle of inadimplenti non est inadimplentum (aequitas est equalitas) is ‘so just, so equitable, so universally recognised that it must be applied in international relations…[and is] one of the general principles of law recognised by civilised nations’. As Schwebel J noted in the Nicaragua case, Anzilotti’s opinion on this score has never been juridically contested.18
When the problem was presented in purely equal terms, it fell to Manley Hudson J, in a separate opinion, to formulate the crux of the problem in equitable terms. Where two parties have assumed an identical or reciprocal obligation, should one party that is engaged in a continuing non-performance of that obligation be permitted to take advantage of a similar non-performance by the other? In deciding that such conduct should not be permitted, Hudson relied upon rationally-based extrapolations of equitable principles transposed from various municipal systems of law.19 A wide-ranging examination of doctrine, common law, Roman law, as well as uses of equity in arbitral history led him to state that ‘principles of equity have long been considered to constitute a part of international law and as such they have often been applied by international tribunals’.20 He made it clear that he was speaking of the power of the Court to decide in law, while applying equitable principles, rather than a judgment ex aequo et bono, as provided for in Article 38(2) of the PCIJ Statute, stating that ‘The Court’s recognition of equity as a part of international law is in no way restrained by the special power conferred upon it to decide a case ex aequo et bono if the parties agree thereto’.21 In this way, he made it clear that equity in terms of general principles was a different beast to the ‘equitable power of judgment’ which could be agreed upon as an alternative to judgment at law by the parties according to the PCIJ (and later the ICJ) Statute. Hudson’s reading of the Statute is clearly in tune with the travaux préparatoires, noting that ‘under Article 38 of the Statute, if not independently of that Article, the Court has some freedom to consider principles of equity as part of the international law which it must apply’.22 Hudson went on to note:
It would seem to be an important principle of equity that where two parties have assumed an identical or reciprocal obligation, one party which is engaged in a continuing non-performance of that obligation should not be permitted to take advantage of a similar non-performance of that obligation by the other party. The principle finds expression in the so-called maxims of equity which exercised great influence in the creative period of the Anglo-American law. Some of these maxims are, ‘equality is equity’, ‘he who seeks equity must do equity’…a very similar principle was received into Roman Law.23
As Rossi notes, in fundamental ways, Hudson J’s opinion provided the gateway through which classical equitable and general principles doctrine, which had been fairly prevalent in international adjudication, became linked to the modern World Court sphere.24 Hudson believed, however, that international judges must make ‘a very sparing application’ of general principles of law, and have ‘scrupulous regard for the limitations which are necessary’ when using them.25
However, Hudson’s was a separate opinion, and the majority of the Court was at odds with his position. The Court, by 10 votes to 3 decided that there were not enough grounds to involve general international law and that the Treaty was, for the most part, specific enough to cover the dispute at hand.
The majority of the Court rejected the claim of the Netherlands that the construction of a canal that would render it possible for Belgium to feed canals situated below Maastricht with water taken from the Meuse at another place than at the Treaty feeder was inconsistent with the Treaty. According to the Court, the fact that the Treaty feeder was situated on Dutch territory gave the Netherlands, as territorial sovereign, a right of supervision which Belgium could not possess.26 However, such a right did not impose an obligation on Belgium not to construct works which could be used to feed canals below Maastricht with water diverted from the Meuse elsewhere than at the Treaty feeder, whereas there was no such obligation for the Netherlands. The Court was of the opinion that such a right ‘would presumably have been granted on a reciprocal basis’.27 If the objective of the Treaty was to create inequality between the contracting parties, this should have been expressed clearly in the text of the Treaty. In absence of such a provision, both States should be treated equally, because the Treaty was ‘an agreement freely concluded between two States seeking to reconcile their practical interests with a view to improving an existing situation rather than to settle a legal dispute concerning mutually contested rights’.28
Rossi criticises the majority opinion as a thinly-disguised non liquet, arguing that Hudson’s approach provided a more satisfactory route to the same conclusion, namely: why should the Court countenance a claim and lend its authority to a final judgment favouring one State over another when both States are clearly engaged in the same type of illegal behaviour?29 In Hudson’s judgment, we see a general principle analogous to the common law maxim ‘he who comes to equity must come with clean hands’.30 Rossi notes that this principle has gained a certain acceptance in the World Court, having also been referred to in the Chorzów Factory and Nicaragua cases.31
The importance of Manley Hudson J’s separate opinion in the Meuse case must be measured extremely carefully. First, we must not fail to remember that this was a separate opinion, and therefore did not form part of the judgment of the Court. Nonetheless, given the relative paucity of international judgments by the World Court, it is clear that dissenting and separate opinions, if they are not consistently expressly overruled by later judgments, are significant for forging an understanding of the normative extent of parts of the legal corpus which are comparatively obscure, and which have not been adequately discussed in the dispositif of ICJ or PCIJ judgments. They are certainly important for understanding equity and general principles of law. This is a point to which I shall return later, but for now it shall suffice to note that it is common and accepted practice amongst leading scholars on the subject of general principles of law to make frequent reference to dissenting and separate opinions to support their conclusions.32
Bearing the above consideration in mind, we can fully appreciate the import of Manley Hudson J’s pronouncements in the Meuse case, which have yet to be refuted by any subsequent international judgment, and which have found support in several subsequent opinions of the ICJ. Hudson had no qualms about applying equitable principles to solve a legal problem, even when this problem was rooted in a fairly specific treaty. Indeed, it is notable that Hudson’s fellow judges refrained from criticising his usage of such principles as a source of law. Had the feeling amongst his colleagues been that such principles had no place in the international normative corpus, it would have been a great sin – and indeed a great mistake – to apply them in the solution of a legal problem, irrespective of the presence of other norms which might be used in the solution of the dispute at hand. The fact that neither Hudson’s fellow judges in the Meuse case nor the judges of the ICJ in the plethora of disputes which have come before it since then have voiced vociferous and trenchant objections to Hudson’s usage of equitable principles in his reasoning suggests that there is indeed a general acceptance amongst the international judiciary that equitable principles may be employed in the solution of legal problems. Such principles must necessarily be understood as a sub-category of the general principles referenced in Article 38(I), therefore enjoying normative parity with treaty and customary law.
While we may feel relatively comfortable in assuming that Hudson’s fellow judges were not shocked and appalled by the learned judge’s usage of equity as a legal source since they did not object to its normative power per se, a further question must be posed before leaving the Meuse dispute aside: why was Hudson – apart, to some extent from Anzilotti – alone in his usage of equity as a source of law to help settle this dispute? The answer, I feel, must necessarily lie in the (equitable) maxim aequitus sequitur legem, or ‘equity follows the law’, which itself is, in international law at least, a corollary of the general principle lex specialis generalibus derogat, which had been agreed upon as a general principle of law by the PCIJ Advisory Committee of Jurists.33 This principle states, as a general – but not universal – rule that where a conflict arises between a sound and settled norm of a specific nature and a more general norm covering a wider area of law, ceteris paribus, the specific rule shall prevail, and as noted earlier, is designed to prevent excessive invocation of equitable principles contra legem. It is clear from the argumentation employed by the majority of the judges in the Meuse case that they felt that resort to general principles in this case was unnecessary, since the 1863 Treaty concerning the extraction and diversion of water from the river Meuse was found to be of a specific and comprehensive enough nature to provide a solution to the dispute in question without resorting to more general sources of law such as custom and general principles.
The Meuse case may well be international equity’s ‘locus classicus’, as one leading scholar has termed it.34 The fact that Hudson’s conclusions have stood the test of time without being roundly denounced, either by his fellow judges or by the vast majority of international legal scholarship on the subject,35 is tremendously important in and of itself. However, the fact that the other judges in the case were not tempted to follow Hudson’s reasoning demonstrates to us the weight associated with the lex specialis generalibus derogat principle. Treaty is more specific than custom; custom (generally) more specific than general principles. This state of affairs, combined with the lex specialis generalibus derogat principle partly explains why the scholar searching international judgments for regular guidance on the content of the ‘general principles’ category set out in the sources of law clause in the ICJ Statute will be left disappointed. It is a rare move indeed for judges to apply general principles, particularly contra legem, which they must effectively do if they are to supersede the lex specialis rule. Such a course of action is called for exceedingly infrequently, especially since disputes tend to arise over areas of international law that are covered by international instruments, or at least by custom. Further, even when it is called for, judges may tend to stray on the side of conservatism and attempt to apply a less controversial and more ‘mainstream’ law source, for fear of charges of prevarication or partiality.36 Hence the lamentable paucity with which international judgments throw up references to general principles and equity.
B. Ubi ius, ubi remedium
The 1970 Barcelona Traction, Light and Power Company Limited case37 was a dispute which arose between Belgium and Spain and which was notable for our purposes not only because it raised equitable considerations, but because it dealt, albeit inferentially, with an extremely potent equitable principle, namely ubi ius, ubi remedium. This principle stipulates that for every wrong committed, there must be a remedy, but while it may seem an elegant legal transposition of Newton’s Third Law of Motion,38 the experienced lawyer is aware that such a principle may be applied contra legem only rarely, if ever. Therefore, even inferential reference to such a principle merits close examination.
The facts of the case run thus: the Barcelona Traction, Light and Power Company was a utilities provider which had been incorporated in Canada in 1911, where its headquarters was located. It later formed a series of subsidiary entities for the purpose of creating and developing electricity in Catalonia, some of which were incorporated in Spain, some in Canada. Some years later, the share capital of the company came to be largely held by Belgian nationals. In the fallout from the Spanish Civil War, the Franco Government and judiciary made it difficult for foreigners to do business in Spain. New shares were issued, and then sold and resold by the Spanish courts. The company was later declared bankrupt, despite the fact that the company itself was not informed of the bankruptcy proceedings in time to enter a plea of opposition to them. The shareholders, backed initially by the British, Canadian, US and Belgian Governments, argued that the proceedings had been fundamentally unfair and made representations to the Spanish Government in this regard. However, importantly, the Canadian Government ceased its interposition in 1955, and eventually it was Belgium alone which, faced with intransigence from the Spanish Government, brought the case before the ICJ.
Problematic in this case was the fact that Belgium was representing the shareholders, but the company itself was incorporated in Canada. Belgium effectively wished to exercise a right of diplomatic protection over the company on behalf of its shareholders. Given that the right of diplomatic protection was originally conceived as a means to protect natural persons rather than legal entities such as corporations, the idea of stretching the notion still further so that the State of the shareholders, as well as the State of the company’s incorporation, might have the right to exercise diplomatic protection over corporate entities in such cases proved a bridge too far for the ICJ. The Court ruled that only the Canadian Government could sue in this case, and that therefore, Belgium lacked the requisite locus standi to bring such an action.
The Barcelona Traction case is important from an international legal perspective for a number of reasons, not least because it definitively demonstrates that diplomatic protection may be exercised in favour of corporate entities as well as natural persons, something which had been in some dispute before the judgment. However, from an equitable perspective, it is interesting for a number of reasons. First, the extension of the right of diplomatic protection to States over legal entities represented a breakthrough, where the Court felt bold enough to extend an accepted right in the interests of justice. The norm (ius) existed; ergo there must be a remedy (remedium), since there was no sufficiently specific legal barrier prohibiting the extension of such a right to legal as well as natural persons. This move by the Court demonstrates an – albeit limited – usage of two equitable doctrines, namely ubi ius, ubi remedium and the prioritisation of substance over form (in the interests of justice). Rossi notes that this ‘bolder’ expression by the Court ‘marks a relatively rare occurrence in international jurisprudence. Normally the Court is loath to break new juridical ground if it can limit its decision to more narrowly circumscribed issues’.39 Such a stance is clearly in keeping with what is a fundamental precept of judicial restraint. To stray too frequently outside this precept may bring forth charges of prevarication. However, it is perhaps worth noting the earlier Chorzów Factory case to gain some perspective here. In the Chorzów Factory case, the PCIJ had already extolled the equitable principle ‘ubi ius, ubi remedium’. The Court held that
reparation is the indispensible complement of a failure to apply a convention, and there is no necessity for this to be stated in the convention itself … [it is] a general conception of law that any breach of an engagement involves an obligation to make reparation.40
This was a far-reaching statement indeed, as it assumed an implied power of the Court – and indeed perhaps a broader power at law, not necessarily vesting exclusively in the Court – to create a remedy where none was explicitly provided for. This case was expanded upon somewhat by a 1949 Advisory Opinion of the ICJ, where instead of interpreting the silence of a UN Charter provision restrictively, the World Court again felt compelled in general interests of justice to take a teleological approach to what consequences the legal personality of UN organs must necessarily entail.41 Here, as Rossi has noted, the Court ‘naturally assumed it had a legal entitlement to interpret the terms of the Charter [and other international instruments]’ and took this very broad teleological reading despite the silence of the provisions ‘to avoid the manifestly unreasonable result that otherwise would have obtained’.42 Both of the above cases represent examples of equity praeter legem, possibly bordering on contra legem. Therefore, Barcelona Traction may not be quite as groundbreaking as it may seem at the first glance.
However, from an equitable perspective, Barcelona Traction may be considered just as important because of the ground it does not break as because of that which it does. Having demonstrated a predisposition towards a flexible equitable interpretation of legal rules, the Court nonetheless ruled against Belgium, holding that, despite the fairly firmly established close nexus between Belgium and the company, Belgium could not exercise diplomatic protection in this case since the company was incorporated in Canada. The Court, however, took the time in its judgment to weigh the arguments on behalf of Belgium, asking whether ‘considerations of equity do not require that [Belgium] be held to possess a right of protection’.43 The Court went on to state that
in view of the discretionary nature of diplomatic protection, considerations of equity cannot require more than the possibility for some protector state to intervene, whether it be the state of the company by virtue of the general rule [which the Court had just established]…or, in a secondary capacity, the national state of the shareholders who claim protection.44
However, despite recognising the equity of the notion of diplomatic protection of shareholders to prevent potential abuses such as those apparently committed by the Spanish Government against Barcelona Traction, the Court recognised that to do so would open the door to competing claims on the part of different States, which could create an atmosphere of insecurity in international economic relations. Therefore, the Court was not willing to extend the right of ius standi to Belgium in this case.
The fact that the ICJ was unwilling to extend the right of diplomatic protection to shareholders is in complete concord with equity’s role in national legal systems. Equity seeks to do justice, to do more harm than good, and here, therefore would not act, as to do so would have ‘opened the door to legal anarchy’.45 This explains the failure to extend ubi ius, ubi remedium to this case. In national legal systems, equity’s limits are more frequently reached when they clash with a sound and settled rule of law which ensures an ordered and predictable state of affairs in a given area, giving rise to the maxim aequitus sequitur legem – equity follows the law. However, at international level, it would seem, judges are wont to take account of international order and stability itself as an important value, in order to ensure the coherence of the corpus of international law and forestay legal anarchy. Such an approach, while vaguely unsatisfying for Belgium in this instance, is a sensible and, moreover, an equitable approach.
C. ‘Substance Over Form’ and Equitable Flexibility
The 1986 Case Concerning Military and Paramilitary Activities in and against Nicaragua represented another instance in which equitable principles, albeit ‘by the back door’, as it were, played a role. Here, the ICJ held that the US had breached international law by supporting the Contra guerrillas in their rebellion against the left-leaning Nicaraguan Government and by mining Nicaragua’s harbours. The Court found in its verdict that the United States was ‘in breach of its obligations under customary international law not to use force against another State’, ‘not to intervene in its affairs’, ‘not to violate its sovereignty’, ‘not to interrupt peaceful maritime commerce’, and ‘in breach of its obligations under Article XIX of the Treaty of Friendship, Commerce and Navigation between the Parties signed at Managua on 21 January 1956’.48
However, more important for our purposes than how the Court arrived at its decision is how the Court actually came to the conclusion that it had jurisdiction to hear the case. The United States contended, as part of its defence, that the ICJ did not have jurisdiction to hear the action in the first place. The purported jurisdiction in this case arose from a combination of Articles 36(1), 36(2) and 36(5) of the Statute of the ICJ. Article 36(1) allows States to make declarations accepting the Court’s jurisdiction as compulsory regarding specific matters arising from treaties concluded between them; Article 36(2) allows States to make declarations accepting the Court’s jurisdiction as compulsory regarding all cases which are brought involving them; while Article 36(5) provides for jurisdiction on the basis of declarations made under the Statute of the Permanent Court of International Justice.49 However, all the above are tempered by the principle of reciprocity in international law, which allows one party to take advantage of any weakness in the declaration of adherence to the Court on the part of the other party to a dispute, in order to ensure parity of arms and a fair judicial process. The United States sought to rely upon this principle in order to expose a weakness on the part of Nicaragua.
Despite several entreaties from the League of Nations, Nicaragua never formally completed the process of ratification of its adherence to the PCIJ Statute, and in one famous instance actually relied upon this imperfection in order to excuse itself from the jurisdiction of the Permanent Court.50 To the five dissenting judges, it was manifestly unreasonable that Nicaragua could ‘eat its cake and have it too’, that is, seek to rely upon its non-conformity with the formal requirements at one point and then seek to rely upon its effective adherence to the same requirements later. The majority of the Court were, however, of another mind, pointing to Article 36(5), which preserved declarations made during the tenure of the PCIJ which were still in force.51 The Court concluded that Nicaragua should be treated as having met the juridical requirements of the optional clause of compulsory jurisdiction. This was the case, despite the fact that Nicaragua in fact admitted that it had never deposited its Protocol of Signature with the relevant League of Nations bureau, and despite the Court having found that ‘Nicaragua, having failed to deposit its instrument of ratification of the Protocol of Signature to the Permanent Court, was not a party to that treaty’.52
This decision constituted a massive step for the ICJ, and was seen by many as prevarication writ large. The perception of bias created by this piece of reasoning from the Court undoubtedly played a key role in the subsequent decision of the US to take no further part in proceedings and to block the enforcement of the Court’s judgment via the Security Council.53 Rossi notes that, absent the application of what he calls ‘pure’ equity (ie reasoning purely in terms of what is just and without taking the legal framework into account),
it is indeed difficult to conceive of a basis for the court’s prevarication from the procedural requirements of due process. It could be argued that Nicaragua did indeed manifest an intention to be bound by the optional protocol by virtue of the simple fact that it initiated the suit.54
However, such a theory of immediate perfection of consent is ill-conceived, since to allow for such ad hoc availing of what is intended to be a permanent clause of jurisdiction within the ICJ Statute is to defeat the purpose of the Article itself. Nicaragua put forward the argument that it had effectively acquiesced to the jurisdiction of the Court in failing to object to a series of United Nations publications which listed Nicaragua as a State party to the Court’s jurisdiction. However, these books contained legal disclaimers which removed any authoritative basis upon which any such argument could prevail and thus the Court dismissed this from its reasoning.
So why did the ICJ take this huge and uncharacteristic step? Rossi cites ‘extra-legal considerations … militating toward the conclusion that it would simply be unjust to dismiss the Nicaraguan complaint due to such a technical deficiency’.55 However, I am loath to accept such a position. That the majority of a World Court composed of learned judges of various nationalities would prioritise what Rossi seems to describe as public sentiment over international law appears unlikely to me. This is particularly true when one reminds one’s self of the inherent conservatism detectable in so many ICJ judgments, which has been discussed both here and in chapter two. Rather, it is my contention that general principles of law, albeit primitively expressed and poorly explained by the judiciary – again, perhaps for fear of opening themselves to charges of prevarication, which ironically happened in any case – played a key role. The alternative – that judges simply dismissed the law because they did not like it – is both too frightening and too far-fetched to contemplate.
It remains, however, to determine, what ‘general principles of law recognised by civilised nations’, or variations thereof, were applied by the Court in this instance. In order to decipher which principles were applied, we must look at the pure legal substance of the judgment, rather than the text itself, since the wording provides virtually no clues as to what the Court’s reasoning must have been in this regard. In brief, the Court determined that a technical defect, the importance of which was in some dispute, should not be held to vitiate the consent of the Nicaraguan Government to the optional clause of compulsory jurisdiction under Article 36(1) and (5) of the ICJ Statute. This, despite the fact that, on the face of it, such a technical defect rendered the purported consent of the Nicaraguan Government imperfect and incomplete.56 Hence, the condition of reciprocity had not been satisfied and the US should not have been bound. However, it is a strongly consecrated principle of equity that ex re sed non ex nomine, or equity will look to the substance of a transaction rather than to its form. As repeatedly noted in chapter three, equity abhors formalism and will not allow a shroud of legality to protect wrongdoers. Therefore, intended transactions which do not fulfil formal requirements will be enforced. This principle was noted as early as the sixteenth century in English courts, and has been used to reach conclusions in a number of famous judgments.57 The extent of this maxim is not completely understood, and will certainly vary from case to case, but, as Hilary Delany notes, while this does not mean that legal formalities will not be required by equity, equity will not require the observance of ‘unnecessary formalities’.58 Such a principle is not specific to the common law system, but as is evident from the conclusions drawn in chapter three, it is perhaps the sole principle – along with the doctrine of the abuse of rights – which exists in every legal system examined. Therefore, there is no doubt that it can be classified without reservation as a general principle of law recognised by civilised nations. It is perhaps further germane to note that recourse to a formal defect by a wrongdoer is also classified as an abuse of right in certain jurisdictions. The fact that both of these principles are so deeply embedded into the legal systems of civilised nations, combined with the Court’s long history of introducing general principles ‘by the back door’ (ie without duly acknowledging them for what they are) gives – I would contend, justified – cause to argue that the Nicaragua jurisdiction decision was based upon the principle of the prioritisation of substance over form and, perhaps to a limited extent, the doctrine of the abuse of rights. Some weight is added to the above theory by the ICJ’s own (deeply unspecific) pronouncement that ‘The Court cannot regard Nicaragua’s reliance on the optional clause as in any way contrary to good faith or equity’.59 This case can only add weight to the arguments of those who opine that equity plays a shadowy – but important – role in international law.
D. Estoppel – The Temple of Preah Vihear and Other Stories
One of equity’s most potent doctrines is that of estoppel. Also known as non concedit venire contra factum proprium, the doctrine holds that a party may not make a serious representation as to his future conduct, which is relied upon by the other party, only to renege upon the assurance given at a later date. In order for one to claim estoppel, there must exist: (1) an assurance given by one party; (2) reliance thereupon by the other party; and (3) detriment resulting to the second party on foot of, and resulting from, this reliance. If this three-stage test is satisfied, then the first party will be held to be ‘estopped’ from denying his original assurance, and must fulfil whatever promise he made to the second party.60