Legal Definitions - ex aequo et bono

Ex aequo et bono

This Latin phrase translates to "according to what is equitable and good." It refers to a situation where a decision-maker, such as an arbitrator or a court, is authorized by the parties involved to decide a case based on principles of fairness, good conscience, and what they believe is just, rather than being strictly bound by existing legal rules, statutes, or precedents.

This power is typically granted when parties agree that a flexible, practical, and fair resolution is more important than a rigid application of the law, especially in contexts like international law or alternative dispute resolution.

• Example 1: International Trade Dispute

  Two multinational corporations from different countries are embroiled in a complex dispute over a failed joint venture. The applicable international contract law is intricate and could lead to a protracted legal battle with an uncertain outcome. To avoid this, both companies agree to submit their dispute to an independent arbitration panel, explicitly granting the arbitrators the power to decide ex aequo et bono. This allows the panel to craft a resolution that is commercially sensible and fair to both parties, considering their long-term business relationship and the practical realities of the situation, even if it means not strictly enforcing every letter of the original contract.

  This illustrates the term because the arbitrators are not confined to a strict interpretation of legal rules but are empowered to find a solution based on what they deem just and equitable for the businesses involved.

• Example 2: Border Demarcation Agreement

  Two neighboring nations have a minor, long-standing disagreement regarding a small section of their shared border, which has historically been poorly defined. Rather than engaging in a formal legal process that could involve extensive historical research and potentially escalate tensions, they agree to appoint a neutral expert commission. The commission is tasked with proposing a final border demarcation line, with the understanding that their decision will be made ex aequo et bono. This allows the commission to consider geographical realities, local community needs, and practical administration, rather than being solely bound by potentially outdated colonial maps or ambiguous historical treaties.

  Here, the commission's authority to decide "ex aequo et bono" means they can prioritize a practical, peaceful, and fair resolution over a rigid adherence to potentially problematic historical legal documents.

• Example 3: Community Land Use Conflict

  A local community group and a property developer are at odds over the proposed construction of a new building that would impact a cherished public green space. The existing zoning laws are somewhat ambiguous regarding this specific parcel, and a strict legal interpretation might favor one party disproportionately. To find a balanced solution, both parties agree to a facilitated negotiation where an independent mediator is given the authority to propose a binding resolution ex aequo et bono. The mediator considers the community's desire for green space, the developer's investment and property rights, and the overall benefit to the town, ultimately proposing a compromise that involves a smaller development and an enhanced public park area.

  This demonstrates the term as the mediator is not strictly applying the letter of the zoning law but is instead empowered to create a fair and good outcome that balances the competing interests based on equitable principles.