Equity in Arbitration and in Judicial Settlement of Disputes

Abstract

Much has been written on the similarities and differences between arbitration tribunals and international courts; much more could and will certainly be written in the future. The purpose of my comments is to define similarities and differences in regard to the role of equity in both. However, I hope to enter the caveat at the very outset that in this paper I will focus solely on the role of equity in cases where the decision is to be based on international law. Accordingly, I will not here discuss cases of the type I had in mind when I pointed out in a speech delivered 34 years ago to the Legal Committee of the UN General Assembly that “[t]he arbitral solution has been applied in the past to a variety of problems, some of which were not judicial in character and did not raise issues of law”. Nor will I now discuss arbitrations in which the parties have agreed that the arbitrators need not be guided by law, or where the arbitral tribunal is expressly authorized by the parties to decide ex aequo et bono and thereby to settle the matter in a liberal spirit without regard to legal requirements and technicalities. Thus, cases in which the arbitrators have been empowered to seek mutual accommodations that would give offense to neither party are outside the scope of this discussion, as are cases where arbitrators recommended action by one of the parties as an act of grace.