The role of equity in the assessment of damages under custom: where are Diallo and the Arctic Sunrise taking the law?

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This article discusses the trends in the use of equity by international courts and tribunals at the stage of assessing pecuniary damages under the standards of customary international law. The research presented in the article is based on the jurisprudence of the International Court of Justice, International Tribunal for the Law of the Sea, regional human rights courts, the Iran-US Claims Tribunal, Annex VII arbitral tribunals, investment arbitration tribunals, and other bodies. The analysis made in the article clarifies the circumstances in which tribunals deem it acceptable to refer to equity at the stage of evaluating damages under custom, the effect that equity may have on the assessment of damages as a matter of law, and the reasons why the use of equity by tribunals may be reconcilable with the scope of their jurisdiction to assess damages on the basis of international law. After discussing these matters, the article takes issue with the Diallo and the Arctic Sunrise, which are the two recent cases in which the tribunals employed an equitable assessment of pecuniary damages. The article argues that the tribunals in these cases awarded pecuniary damages in excess of jurisdiction and provided a reasoning that may bring arbitrariness into the calculation of damages under the standards of customary international law. As a matter of legal principle, Diallo and the Arctic Sunrise have opened the doors for awarding pecuniary damages in the amounts assessed on the basis of mere speculation and with no regard to any evidence whatsoever. Once Diallo and the Arctic Sunrise detonate in international dispute settlement, they will complicate the process of assessing pecuniary damages flowing from internationally wrongful acts. The general conclusion drawn at the end is that in international jurisprudence certain consistent trends in applying equity to the assessment of damages under custom have emerged. However, Diallo and the Arctic Sunrise – rendered in excess of authority – have undermined these trends and brought developments that are potentially dangerous for international law.

About the author: Alexey Vyalkov – Magister Juris (University of Oxford, the United Kingdom), practitioner, Moscow, Russia.

Citation: Vyalkov A. (2018) Rol' printsipa spravedlivosti pri otsenke ubytkov po mezhdunarodnomy obychayu: kuda delo Diallo i delo sudna “Arktik Sanrayz” vedut sostoyanie prava? [The role of equity in the assessment of damages under custom: where are Diallo and the Arctic Sunrise taking the law?]. Mezhdunarodnoe pravosudie, vol.8, no.4, pp.59–82. (In Russian).

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