Duhaime's Law Dictionary


Ex Aequo Et Bono Definition:

Latin: in justice and fairness.

Related Terms: Justice, Equity, Arbitration

Something to be decided ex aequo et bono is something that is to be decided by principles of what is fair and just.

Most legal cases are decided on the strict rule of law.

For example, a contract will be normally upheld and enforced by the legal system no matter how "unfair" it may prove to be.

But a case to be decided ex aequo et bono, overrides the strict rule of law and requires instead a decision based on what is fair and just given the circumstances.

Often contrasted with equity although the latter is a creature of legal systems with formal rules of engagement and with some limitations, whereas ex aequo et bono is a commitment to resolve a dispute without being bound by law.

Madam Justice Wedge used the term in Topouzis v. Abboud:

"Ex aequo et bono: according to the right and good."

Ex aequo et bono is a term of art in the law of alternative dispute resolution generally, and arbitration specifically. It refers to an arbitration in which the arbitrator does not rely on strict legal rules but instead deciding the matter on justice and fairness, even in defiance of a legal principle:

"The parties (to arbitration) may determine the law, either domestic or foreign, that will govern the merits of the dispute. They may also authorize the arbitrators to designate the applicable positive law or, through a directive empowering them to act as amiables compositeurs, exclude the positive law of the State. Of course, the latter possibility, which permits the arbitrators to decide ex æquo et bono – that is, pursuant to extra-legal standards – is not an innovation of the 1986 law. Amiable composition is part of a very old civilian tradition in arbitration matters.... Arbitrators must therefore decide pursuant to substantive rules of law unless they have been exempted from doing so by the parties themselves. It would be interesting to observe in the years to come whether the exception — that is, the appointment of arbitrators exempted from applying the law — will in fact prevail over the principle. At the moment, it is not clear, since practice varies from one context to another. The exemption from the strict application of the law probably makes the most sense in commercial arbitration."1

Trakman wrote:

"The ancient concept ex aequo et bono holds that adjudicators should decide disputes according to that which is fair and in good conscience....

"Parties to international law disputes-both public and commercial ordinarily resolve disputes ex aequo et bono only as an exception, not as the rule. The vast majority of decisions are resolved according to the parties' choice of law. Any resort to ex aequo et bono occurs only if the parties expressly choose it in substitution for, or in addition to, their choice of law....

"Whereas equity is part of an applicable legal system, notions of equality associated with ex aequo et bono are deemed to reside in a moral, social, or political realm that is external to the law."

The UNCITRAL Model Law on International Commercial Arbitration, at §28.1(3):

"The arbitral tribunal shall decide ex æquo et bono or as amiable compositeur only if the parties have expressly authorized it to do so."

REFERENCES:

  • NOTE 1: John E. C. Brierley, John, 'Equity and Good Conscience’ and Amiable Composition in Canadian Arbitration Law, 19 Can. Bus. L. J. 461 (1991). Cited with approval by the Court of Appeal of Quebec in Coderre v. Coderre, 2008 QCCA 888,
  • Topouzis v. Abboud, 2012 BCSC 228
  • Trakman, Leon, Ex Aequo et Bono: Demystifying an Ancient Concept, 8 CJIL 621 (2007-2008)

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