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The Arbitrator’s Prudence In Lex Mercatoria: Amiable Composition And Ex Aequo Et Bono In Decision Making by A F M Maniruzzaman, PhD (Cambridge), FRSA

A commentary reprinted from the December 2003 issue of Mealey's International Arbitration Report.

© Copyright 2003 LexisNexis, Division of Reed Elsevier Inc. All rights reserved. Reproduction strictly prohibited without written permission.

Electronic copy available at: http://ssrn.com/abstract=1342336

MEALEY'S INTERNATIONAL ARBITRATION REPORT edited by Edie Scott The Report is produced monthly by Mealey Publications P.O. Box 62090, King of Prussia Pa 19406-0230, USA Telephone: (610) 768-7800 1-800-MEALEYS (1-800-632-5397) Fax: (610) 962-4991 Email: [email protected] Web site: http://www.mealeys.com ISSN 1089-2397

Electronic copy available at: http://ssrn.com/abstract=1342336

MEALEY'S International Arbitration Report Vol. 18, #12

December 2003

Commentary

The Arbitrator’s Prudence In Lex Mercatoria: Amiable Composition And Ex Aequo Et Bono In Decision Making By A F M Maniruzzaman, PhD (Cambridge), FRSA

[Editor’s Note: Dr A F M Maniruzzaman is a professor of international and business law (elect) at the University of Portsmouth, UK and a senior lecturer in law at the Kent Law School at the University of Kent, UK. Dr. Maniruzzaman is an advocate, Supreme Court of Bangladesh, Dhaka and an associate member of the International Chamber of Commerce (ICC) Institute of World Business Law in Paris. He is also a member of the Chartered Institute of Arbitrators, London, a member of the International Committee on International Commercial Arbitration of the International Law Association, London and a member of the Swiss Arbitration Association. Dr. Maniruzzaman is an international legal consultant, a visiting scholar at St. John’s College, University of Oxford and the Centre of International Studies, University of Cambridge; and a visiting fellow, Lauterpacht Research Centre for International Law, Cambridge. Copyright by the Author 2003. Replies to this commentary are welcome.]

It is now commonplace in most institutional arbitration rules and various countries’ arbitration legislation to provide for settlement of disputes by amiable composition and ex aequo et bono if the parties so agree. Once the arbitrator takes the mantle of an amiable compositeur, it is up to him to decide how best he can do the job. The same applies to the case when he has to decide ex aequo et bono. A prudent arbitrator will resort to the best course which is acceptable to the disputing parties. In the decision making process the arbitrator should be pro-active, guided by his own motor, and, of course, should encourage the parties to co-operate and also be open to co-operation when the parties come forward with that intention. The very nature of the decision making process by amiable composition and ex aequo et bono is often question begging as to what an arbitrator can and cannot do in the context of how he should come about a decision and so on. The purpose of this short paper is to highlight the role of the arbitrator acting as amiable composituer and that in his application of ex aequo et bono. Besides, the focus will also be made on the issue of how an arbitrator in those contexts can promote the development of the lex mercatoria. Some have argued that while applying the lex mercatoria arbitrators act as amiable compositeur. If the lex mercatoria and amiable composition are considered inseparable, and one should mean the other, then this concept is fallacious. It is well established that the arbitrator’s authority to act as amiable compositeur is derived from two sources, viz. (a) the parties’ express consent or agreement and (b) the applicable lex arbitri that permits that agreement.1 Contrary to this, if the arbitrator acts as amiable compositeur his action will be certainly invalid and any award rendered thereby will be unenforceable. As mentioned earlier, the same applies to when an arbitrator decides ex aequo et bono. The legal scholarship on the subject has failed to adequately explain the difference between the two concepts, though they are perceived to be different in the juristic thinking.2 There is also a tendency amongst some scholars to equate the two to mean the same thing.3 Although conceptually the two concepts tend to come round closer in substance in many cases,4 some legal systems may provide functional distinctions between them. Thus, under Swiss law the power to act ex aequo et bono entitles the arbitrator to “disregard the relevant legal rules, including mandatory rules, subject only to international public policy,” while an amiable compositeur

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“must comply with mandatory rules of law.”5 In the broad senses of the two concepts, however, the tendency of many rather seems to assume that while acting as amiable compositeur (friendly arbitrator) an arbitrator can decide ex aequo et bono (according to equity, justice and fairness).6 Although ex aequo et bono implies the use of an extra-legal standard, it does not necessarily restrict the application of law.7 What it suggests is that the arbitrator is not bound by strict application of law, and it also implies that while applying extra-legal standards the arbitrator has to be objective, and not capricious, in his goal to arrive at a fair and just result. As Judge Hudson noted: “Acting ex aequo et bono, the Court is not compelled to depart from applicable law, but it is permitted to do so, and it may even call upon a party to give up legal rights. Yet it does not have a complete freedom of action. It cannot act capriciously and arbitrarily. To the extent that it goes outside the applicable law, or acts where no law is applicable, it must proceed upon objective considerations of what is fair and just. Such considerations depend, in large measure, upon the judges’ personal appreciation, and yet the Court would not be justified in reaching a result which could not be explained on rational grounds.”8 There is no doubt that acting as amiable compositeur or deciding ex aequo et bono an arbitrator may apply the lex mercatoria,9 or for that matter any other law, but the converse is not necessarily true as has been recently confirmed by Austrian, French and English courts in decisions on the enforceability of arbitral awards based on the lex mercatoria.10 Those who consider the lex mercatoria not as law but a catalogue of equitable directives and the like, the abitrator’s application of the lex appears to them to be the results of his acting as amiable compositeur11 or deciding ex aequo et bono. The main thrust of equating amiable composition and ex aequo et bono with the lex mercatoria is equity being identified with the lex.12 While it is true that equity may be part of the lex mercatoria, they are not conceptually interchangeable. As the mercatorists consider the lex mercatoria as law, even though it corresponds to equity, they generally distinguish between the lex mercatoria and equity. The distinction is, however, apparent when the results of the application of both to a given situation are different.13 This may be due to the fact that the lex mercatoria means more than equity in the sense that the former includes more variable elements than equity, and in a given situation the application of the lex may prevail over equity. Such a distinction is vital in order to show that while applying the lex mercatoria arbitrators do not necessarily act as amiable compositeur.14 However, decisions by equity within the law should not be confused with decisions by ex aequo et bono. The International Court of Justice has articulated a distinction between them in the Continental Shelf judgment in the following words: “Whatever the legal reasoning of a court of justice, its decisions must by definition be just, and therefore in that sense equitable. Nevertheless, when mention is made of a court dispensing justice or declaring the law, what is meant is that the decision finds its objective justification in considerations lying not outside but within the rules, and in this field it is precisely a rule of law that calls for the application of equitable principles. There is consequently no question in this case of any decision ex aequo et bono, such as would only be possible under the conditions prescribed by Article 38, paragraph 2, of the Court’s Statute.”15 Such a position has been consistently maintained by the International Court of Justice in its growing jurisprudence in the field of maritime boundary delimitations.16 The juristic views also support the role of equity infra legem in decisions according to law per se.17 Equity infra legem is “that form of equity which constitutes a method of interpretation of the law in force, and is one of its attributes.”18 It is, in Rosenne’s words, “equity not in terms of ‘opposition’ to ‘law,’ but in terms of fulfilling the law and if necessary supplementing it.”19 The International Court of Justice famously noted on three different occasions this role of equity as part of law. Thus in the North Sea Continental Shelf cases the Court said, “It is not a question of applying equity simply as a matter of abstract justice, but of applying a rule of law which itself requires the application of equitable


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principles . . . the decision finds its objective justification in considerations lying not outside but within the rules, and . . . it is precisely a rule of law that calls for the application of equitable principles.”20 The Court observed in the Tunisia/Libya case that “The legal concept of equity is a general principle directly applicable as law . . . the Court . . . is bound to apply equitable principles as part of international law.”21 In the Libya/Malta case it also noted, “The justice of which equity is an emanation, is not abstract justice but justice according to the rule of law . . . the normative character of equitable principles applied as a part of general international law is important . . .”22 There is no reason why this jurisprudence should not apply in the context of the lex mercatoria if it is considered to be the law in its own right. As one scholar notes of the role of arbitrators’ application of law that, “. . . failing party authorization permitted under the applicable law, arbitrators do not necessarily act as amiables compositeurs when they base their decisions on principles of fairness, equity and natural justice. This is so because, in many legal systems such as the Swiss, German and Dutch and to a lesser extent in French and Belgian law, the distinction between application of strict law and amiable composition has eroded due to the emergence of open-ended rules (Generalklauseln, normes floues). The law is therefore no longer as strict as it used to be and considerations of equity also are very important in its application. These developments may be seen in substantive law as well as in conflict of laws. Thus, the dispute settlement methods used by arbitrators should be reviewed against this development.”23 Thus, the application of equity infra legem, intra legem, or secundum legem, whatever expression is used, ‘simply means that a judge or an arbitrator has certain amount of discretion in interpreting the law, in clarifying obscurities and in filling minor gaps in the law.’24 In the literature this type of equity is distinguished from two other variants such as prater legem and contra legem.25 As Professor Sohn notes, “Equity is applied prater legem, in addition to law, whenever a tribunal is specifically empowered to decide in accordance with . . . law and equity . . . this coupling of equity to law gives “greater latitude” to the arbitrator; it also permits resort to equity if the law is silent on the subject, obscure or insufficient. An arbitrator’s right to give a decision on the basis of “absolute equity” seems to imply the power to act contra legem, at least to the extent of disregarding various technicalities of the law. . . .”26 However, a caveat must be made that the overbearing application of equity — manifesting as equity contra legem — may prove a decision to be one ex aequo et bono. Judge Bedjaoui thus reserves his view even on the role of equity within the law when he describes equity as “a riddle wrapped in a mystery inside an enigma.”27 The superimposition of such flexible principles as equity upon so fluid a legal system like the lex mercatoria may fail to produce predictable legal result28 and the notion of justice would prove simply a mirage. Thus, once the International Court of Justice in its celebrated dictum said that the application of justice “should display consistency and a degree of predictability.”29 This is the simple truth, otherwise justice would be elusive that no reasonable person can expect. Hence the arbitrator has to be careful especially when he, of his own volition, applies or is authorised to apply the lex mercatoria. Professor Weil’s cautionary remarks in the context are worth noting: “If law and equity are the twin daughters of justice, ex aequo et bono is a third. From law to ex aequo et bono by way of equity is a seamless continuum. So much is this the case, that, however much the courts assimilate equity to the law, they have sometimes given the impression of leaning rather in the direction of ex aequo et bono. The very emphasis in the repeated pronouncements on the subject of equity “as a legal concept” cannot but arouse the suspicion that it is necessary, from time to time, to retrieve the position.”30 One may wonder if both the concepts of amiable composition and ex aequo et bono are different in the formal and normative sense from that of the lex mercatoria, why then the former cannot be identified with the process of decision making by way of conciliation or mediation.31 It has to be acknowledged that although sometimes in the substance of decisional rules established by amiable composition, ex aequo et bono, lex mercatoria and conciliation or mediation the lines between


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them may be blurred or indistinguishable, they all cannot be categorised as the same, at least from the formalistic point of view. As is well recognised, the basic distinction between arbitration and conciliation is that the decision rendered by an arbitrator whether by amiable composition, ex aequo et bono, or lex mercatoria the decision is legally binding on the parties concerned, whereas the decision rendered by a conciliator by whatever aforementioned routes is not legally binding but recommendatory. The question remains whether while acting as amiable compositeur or deciding ex aequo et bono, the arbitrator can develop the lex mercatoria. The mecatorists do not accept the view that when the arbitrator applies the lex mercatoria either by the parties’agreement or on his own motion in the absence of such agreement, he acts amiable compositeur or decides ex aequo et bono. However, sometimes there seems to be a fine line between all of them in substance despite the formalistic and artificial distinction that is drawn between them. The formalistic distinction apparently hinges on the point that the arbitrator needs the parties’ authorisation before acting as amiable compositeur or deciding ex aequo et bono, while in the absence of the parties’ agreement as to the choice of law otherwise the arbitrator has the freedom to apply the lex mercatoria as increasingly recognised by many international arbitration rules and also by many national laws on arbitration. The method by which the arbitrator will arrive at the lex mercatoria can never be predetermined when the applicable lex is not clear cut or well established. It is well known that the lex mercatoria is not a welldeveloped or mature legal system and is in fact in a state of flux. In such a fluid situation of the lex mercatoria the arbitrator may arrive at lex via amiable composition and ex aequo et bono. Thus the arbitrator can develop the lex mercatoria by equity, fairness and natural justice principles which are not already part of the lex mercatoria but are made part of it by virtue of their appropriateness or suitability in the circumstances to reach a fair settlement of the dispute at his disposal. While developing the lex mercatoria either by amiable composition or ex aequo et bono, the arbitrator’s prudence in the real life of trade and commerce should operate as quintessence of his philosophy. The role of the arbitrator in developing the lex is considered to be an innovative and creative one and in this role he is deemed to be a ‘social engineer.’32 Thus the normative content of the lex mercatoria may not only consist of law but also equity, natural justice principles and other standards of fairness as are objectively tailor-made and fashioned for the particular situations and circumstances. While shaping certain standards of equity and fair-dealing as part of the lex mercatoria, arbitrators have to be sensitive to the cultural differences between the parties concerned and other factors of sensitivity that may be relevant in a cross-border context and should draw inspiration from the prospect of universal application or appeal of the lex mercatoria they are supposed to engineer in their innovative and creative approach to it. Thus, one scholar has observed that: “The success of “equity” as a standard clearly turns more on the decision-maker than it does on the decisionstandard. . . . Thus, general principles of equity, ex aequo et bono, or amiable composition, at least in their singular capacities, are not likely to result in the evolution of new, transferable principles for the governance of commercial transactions including parties from both Western and nonWestern traditions. Nonetheless, the inherent openness of these standards to new and different considerations and values in the governance of East-West commercial affairs certainly suggests their capacity for a significant contribution to this goal.”33 It has thus to be acknowledged that it is not so much of the lex mercatoria itself as a body of rules or principles that is important, but the quality of its being contextual as well as its responsiveness to the legitimate expectation of the parties what make it acceptable to the parties. It is where the strength of the lex mercatoria lies in the international business community here and now and will well do into the distant future. No doubt, the arbitrator’s prudence in developing the lex mercatoria is the life blood of his creative process. Although predictability of the outcome of a dispute settled by the lex mercatoria by way of amiable composition or ex aequo et bono is often questioned as a serious problem, it should not, how-


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ever, be a matter of much concern when a decision is reached by the arbitrator’s practical wisdom. Of course, there are certain things that are universally understood as right or wrong and if the arbitrator is prudent enough to ascertain as such, predictability will prove a non-issue. Looking back into the history of legal development, it will be appreciated that in the absence of legal rules or principles in specific situations judges’ creative thinking process and analytical tool have helped shape the law for centuries towards its perfection.34 Many legal principles and rules developed by judges were also subsequently formally enacted as law in the statutory form by the parliament of the country. Certainly, to fill the gap in the law or to avoid the non-liquet situation judges and arbitrators have had often recourse to equity, equitable considerations, and fairness of dealing, etc., to render a decision and that is how the law has grown into maturity over centuries in many countries and is still growing as the time passes by. To sum up, if the arbitrator is authorised to act as amiable compositeur or to decide ex aequo et bono, there does not seem to be any problem in his developing the lex mercatoria in that capacity. The problem arises when the arbitrator is to apply the lex mercatoria but he, though not expressly authorised to do so, goes down the way to amiable composition or ex aequo et bono to find it. How far is it true that it does not happen at all? Much research is needed to establish the truth, however.

ENDNOTES 1.

UNCITRAL Arbitration Rules (1976) Art. 33(2); International Center for Letter of Credit Arbitration, Inc. (ICLOCA) Rules of Arbitration (1996) Art. 33(2).See also J.D.M. Lew, Applicable Law in International Commercial Arbitration (1978) paras. 141-142.

2.

See Mauro Rubino-Sammartano, “Amiable Compositeur (Joint Mandate to Settle) and Ex Bono et Aequo (Discretional Authority to Mitigate Strict Law): Apparent Synonyms Revisited,” 9 Journal of International Arbitration (no.1, March 1992), p.5, at pp.14-16.

3.

See, for example, Sigvard Jarvin “The Sources and Limits of the Arbitrator’s Powers” in Contemporary Problems in International Arbitration (Julian D.M. Lew, ed., 1987), p.50, at p.70; J. Robert, L’arbitrage, droit interne, droit international privé (Dalloz, 1983), at p.161.

4.

See generally, Eric Loquin, L’amiable Composition en droit Comparé et International (Libraires Techniques, Paris, 1980).

5.

Karyn S. Weinberg, “Equity in International Arbitration: How Fair is “Fair”: A Study of Lex Mercatoria and Amiable Composition.” 12 Boston Univ.Int’l L.J. (1994), p.227, at 231, fn.26.

6.

While amiable compositeur has wider connotation than ex aequo et bono, an arbitrator, acting as amiable compositeur, may not or have no need to resort to equity or justice and may fall back on other factors to decide a dispute. See ICC Award No. 1780, Doc. No. 410/1921, 16 December 1970 as discussed in Lew, op.cit. para. 393. See also Rubino-Sammartano, “Amiable Compositeur (Joint Mandate to Settle) and Ex Aequo et Bono (Discretional Authority to Mitigate Strict Law)” 9 J.Int.Arb. (1992, No.1), p.5.

7.

Christoph Schreuer, “Decisions ex aequo et bono under the ICSID Convention” ICSID Rev-FILJ (1996, No.1),p.37; Ulrich Scheuner, “Decisions ex aequo et bono by International Courts and Arbitral Tribunals” in Pieter Sanders (ed.), International Arbitration: Liber Amicorum for Martin Domke (Martinus Nijhoff, The Hague, 1967), p.275.


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8.

Manley O. Hudson, The Permanent Court of International Justice, 1920-1942 (1943), at p.620. See also Ulrich Scheuner, “Decisions ex aequo et bono by International Courts and Arbitral Tribunals”, in Pieter Sanders (ed.), International Arbitration Liber Amicorum for Martin Domke (Martinus Nijhoff, The Hague, 1967), p.275, at p.283.

9.

See Mechema Ltd. v. Mines, Mineraux et Metaux, reprinted in VII YB Comm. Arb. 77 (1982) (award of November 3, 1977); ICC Award no. 3267, reprinted in 12 Y.B. Comm. Arb. 87-89 (1987) (award of 28 March 1987); B. Goldman, “La Lex Mercatoria dans les contrats et l’arbitrage internationaux: Réalité et perspectives,” Clunet (1979), p.475, PP. 480 ff; E. Loquin, Apport de la jurisprudence arbitrale: L’Application de règles anationales (Paris, 1986), Article 577; Y. Derains, “Possible Conflict of Laws Rules and the Rules Applicable to the Substance of the Dispute” in UNCITRAL’s Project for a Model on International Commercial Arbitration (International Council for Commercial Arbitration Congress Series, No.2), Gn. Ed., P. Sanders, 1986, p.169, at p.188. It should be noted that it is admitted that the arbitrators need not enjoy powers of amiables compositeurs in order to apply anational rules and more generally, the lex mercatoria. — Cf. the ICC awards in cases No. 1641 of 1969, Clunet (1974), p.888; No. 2281 of 1975, Clunet (1976), p. 989; No. 1375 of 1965; No. 1568 of 1970; No. 1859 of 1973, in Rev.arb. (1973), pp. 131, 135, 133; decision of the Tribunal de Grand Instance de Paris, dated March 4, 1982 (unpublished).

10.

Pabalk Ticaret Limited Sirketi (Turkey) v. Norsolor S.A. (France): decision of the French Cour de Cassation in 24 ILM 360 (1985); decision of the Austrian Supreme Court in IX YB Comm. Arb. 159 (1984); Fougerolle (France) v. Banque de Proche Orient (Lebanon) 1982 Rev. Arb. 183 (French decision). Deutsche Schachtbau-und Tiefbohrgesellschaft mbH v. R’As al-Khaimah National Oil Co. [1990] 1 A.C. 295 (English decision). The English Court of Appeal upheld the arbitral tribunal’s application of the lex mercatoria not as amiable compositeur but based on Art. 13 (3) of the ICC Arbitration Rules in the absence of a choice of law clause.

11.

See E. Loquin, L’amiable composition en droit comparé et international, Contribution à l’étude du non-droit dans l’arbitrage commercial, Université de Dijion, Travaux du centre sur le droit des marchés et des investissements internationaux, Vol.7, Paris, L.T. (1980) at pp. 325-31.

12.

See F.A. Mann, “England Rejects ‘Delocalized’ Contracts and Arbitration 33 ICLQ (1984), p.193, at pp. 196-97: “The purpose (of the lex mercatoria ) is to substitute ill-defined “equity” for rules of law, to rely on what is considered fair and conforming to usage. It is difficult to imagine a more dangerous, more undesirable and more ill-founded view which denies any measure of predictability and certainty and confers upon parties to an international commercial contract or their arbitrators powers that no system of law permits and no court could exercise.” See also Jean-Denis Bredin, “La loi de juge,” Le droit des relations économiques internationales, études offertes à Berthold Goldman, Paris 1983, p. 281). Cf. Lando, 34 I.C.L.Q. 747 (1985) at pp. 754-55.

13.

Ole Lando, “The Lex Mercatoria in International Commercial Arbitration” 34 I.C.L.Q. (1985), p.747, at p.755.

14.

F. Dasser, Internationale Schiedsgerichte und Lex Mercatoria (1989): one reviewer of the book notes: “the author draws a clear line between application of the lex mercatoria and “amiable composition.” While lex mercatoria would involve application of rules of law, “amiable composition” would authorize arbitrators to depart from any rule of law and to look to the fairness of their decision. Such a distinction is always made by proponents of the lex mercatoria to avoid criticism that arbitrators acted as “amiables compositeurs” without being duly authorized by the parties. However, the distinction rests upon the assumption that the lex mercatoria at least consists of autonomous legal rules. Since the author’s position with regard to trade usages and general principles as autonomous rules is not very convincing, his conclusion that application of the lex mercatoria cannot be identified with “amiable composition” may also be questioned . . .” — see F. De Ly, in 39 A.J.Comp.L. (1991), p.626, at p.628.

15.

The North Sea Continental Shelf Cases, ICJ Report (1969), p.3, at p.48.


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See Tunisia/Libya Continental Shelf (Merits) Judgment, ICJ Reports 1982, p.18, and Tunisia v. Libya (Application for Revision and Interpretation) Judgement, ICJ Reports 1985, p.192; Canada/ United States Delimitation of the Maritime Boundary in the Gulf of Maine Area Judgment (Chamber), ICJ Reports 1984, p.246; Libya/Malta Continental Shelf (Merits) Judgement, ICJ Reports 185, p.13; El Salvador/Honduras: Nicaragua Intervening Land, Island and Maritime Frontier Dispute Judgment (Chamber), ICJ Reports 1992, p.351; Denmark v. Norway Maritime Delimitation in the Area Between Greenland and Jan Mayen Judgement, ICJ Reports 1993, p.38 (see especially, Separate Opinion of Judge Weeramantry, ICJ Reports 1993, pp.211-279. See also the jurisprudence of other tribunals which reinforces the ICJ position: Anglo/French Delimitation of the Continental Shelf Decisions of the Court of Arbitration (1977 and 1978), 18 UNRIAA, p.3, at p.271, also 18 I.L.M. p.397, at p.463 (1979); Argentina/Chile Beagle Channel Award (1977) of the Court of Arbitration and related instruments, 21 UNRIAA, pp.55-264 (1997); Iceland/Norway Continental Shelf Area Between Iceland and Jan Mayen (1981), Recommendations of the Conciliation Commission, 20 ILM p.979 (1981); Dubai/Sharjah Maritime and Land Boundaries Award (1981) of the Court of Arbitration, 91 ILR, p.543 (1993); Guinea/Guinea-Bissau Delimitation of the Maritime Boundary Award (1985) of the Arbitration Tribunal, 25 ILM p.251 (1986), and 77 ILR p.636 (1988); Egypt/Israel Taba Area Award (1988) of the Arbitration Tribunal, 27 ILM p.1421 (1988), 28 ILM p.611 (1989), and 80 ILR 1; and Canada/France Delimitation of Maritime Areas Award (1992) of the Court of Arbitration, 21 UNRIAA p.267 (1997), and 31 ILM p.1165 (1992).

17.

See, e.g. B. Kwiatkowska, “Equitable Maritime Delimitation, as Exemplified in the Work of the International Court of Justice During the Presidency of Sir Robert Yewdall Jennings and Beyond,” 28 Ocean Development and International Law (1997), p.91; R. Jennings, “Equity and Equitable Principles” 42 Annuaire Suisse de Droit International (1986), p.27, and “The Principles Governing Marine Boundaries,” in Staat und Völkerrechtsordung, Festschrift für Karl Doehring (1989), p.398; M. Bedjaoui, “L “Énigma” des “principes équitables” dans le droit des délimitation maritimes,” XLII Revista Espanola de Derecho Internacional (1990), p.367.

18.

Statement of the President of the International Court of Justice, Judge Mohammed Bedjaoui, to the 49th United Nations General Assembly, UN Doc. A/49/PV.29, 13 October 1994, p.1 at p.4, reprinted in the ICJ Yearbook 1994-1995, p.207, at pp.211-12 (No.49); also in ICJ Reports, 1986, pp.567-8, para.28.

19.

Shabtai Rosenne, An International Law Miscellany: “The Position of the International Court of Justice on the Foundations of the Principle of Equity in International Law” (Chapter 7), p.201, at p.204.

20.

ICJ Reports, 1969, p.3, paras.85 and 88.

21.

ICJ Reports, 1982, p.3, para.71.

22.

ICJ Reports, 1985, p.13, paras.45-6.

23.

Filip De Ly, International Business Law and Lex Mercatoria (North-Holland, Amsterdam, 1992: T.M.C. Asser Institut, The Hague), p.124, para.182.

24.

Louis B. Sohn, “Arbitration of International Disputes Ex aequo et bono,” in International Arbitration Liber Amicorum for Martin Domke (Pieter Sanders, ed.) Martinus Nijhoff, The Hague (1967), p.330, at p.332.

25.

Ibid. B. Cheng, “Justice and Equity in International Law,” Current Legal Problems (1955), p.185, at pp.202-11; Wolfgang Friedmann, The Contribution of English Equity to the Idea of an International Equity Tribunal (1935), pp.22-24.

26.

Sohn, op.cit. (1967), at p.332.


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27.

M. Bedjaoui, op.cit. (1990), at p.387.

28.

Cf. Denmark v. Norway (Jan Mayen) Separate Opinion of Judge Weeramantry, ICJ Reports 1993, p. 211, at p.257, para.162.

29.

Continental Shelf (libya/Malta), ICJ Reports, 1985, p.13, at para.45.

30.

Prosper Weil, The Law of Maritime Delimitation — Reflections (Grotius Publications Ltd., Cambridge, 1989), at pp.164-165.

31.

The terms ‘conciliation’ and ‘mediation’ are meant interchangeably here.

32.

See generally, A.F.M. Maniruzzaman, “The Lex Mercatoria and International Contracts: A Challenge for International Commercial Arbitration?,” 14 American University International Law Review (no.3, 1999), pp. 657-737, esp. at pp.711-717.

33.

Philip J. McConnaughay, “Rethinking the Role of Law and Contracts in East-West Commercial Relationships,” 41 Virginia Journal of International Law (2001), p.427, at p.471.

34.

See generally, Benjamin N. Cardozo, The Nature of the Judicial Process (Yale University Press, New Haven, 1921); Lord Reid, “The Judge as Law Maker,” XII Journal of the Society of Public Teachers of Law (1972), p.22: “There was a time when it was thought almost indecent to suggest that judges make law — they only declare it. Those with a taste for fairy tales seem to have thought that in some Aladdin’s cave there is hidden the Common Law in all its splendour and that on a judge’s appointment there descends on him knowledge of the magic words Open Sesame. Bad decisions are given when the judge has muddled the password and the wrong door opens. But we do not believe in fairy tales any more. So we must accept the fact that for better or worse judges do make law, and tackle the question how do they approach their task and how should they approach it.” ■


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Arbitration And The Fisc: NAFTA’s ‘Tax Veto’ by William W. (Rusty) Park Professor of Law at Boston University Vice President, London Court of International Arbitration Arbitrator, Claims Resolution Tribunal for Dormant Accounts in Switzerland

A case of note reprinted from the May 2001 issue of Mealey's International Arbitration Report.

© Copyright 2001 Mealey Publications. All rights reserved. Reproduction strictly prohibited without written permission.

MEALEY'S INTERNATIONAL ARBITRATION REPORT edited by Edie Scott The Report is produced monthly by

P.O. Box 62090, King of Prussia Pa 19406-0230, USA Telephone: (610) 768-7800 1-800-MEALEYS (1-800-632-5397) Fax: (610) 962-4991 Email: [email protected] Web site: http://www.mealeys.com ISSN 1089-2397