Upreti, Trilochan, International Watercourses Law and Its Application ...

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Equitable Utilisation / 139 140 / International Watercourses Law and Its Application in South Asiaamounted to acquiescence, adding that when two countriesestablish a frontier between them, one of the primary objects isto achieve stability and finality. 105 Reasoning for that argumentis right in view of the fact that if once settled border issues beallowed to arise after a long period of time, the finality of theborder would remain forever unresolved. The principle ofacquiescence does not apply generally to IWL. Under the ruleof equitable utilisation envisaged in Article 6 of the UNCIW,even if one riparian state has been utilising a huge volume ofwater, it would be unfair to prevent another riparian state fromobjecting simply because of that state’s acquiescence, as suchuse is just one of the factors in the determination of equitableutilisation, and one which can be displaced by other factors. 106However, it is not the argument of the author that equity mayitself be a factor to be considered as part of equitableutilisation: equitable utilisation is a principle of equity.3.6.4 Ex Aequo Et Bono ( in Fairness and Right)Ex aequo et bono stands outside the framework of law. If theuse of a set of legal rules is unable to deliver justice, or if thereare no such applicable rules to allow the dispensing of justice,ex aequo et bono provides both its own ends, means andjustification for use. Under Article 38(2) of the ICJ's Statute,the ICJ is empowered, with the consent of parties appearingbefore it, to decide the case not by the application of law butrather by consideration of socio-economic, cultural andpolitical factors. Until now, no case has been decided on such abasis by the ICJ or PCIJ, but the decision of an administrativetribunal of the International Labour Organisation based uponthe application of the principle of ex acquo et bono and notbased on any specific rule of law was upheld by the ICJ. Thetribunal decided a case by examining the appropriate level ofdamages, ex aequo et bono to fix what the court described as105 Ibid.106 Article 6, 36 ILM (1997) p. 704.measures of compensation. 107 The failure to use this clause38(2) demonstrates the reluctance of states to confer unbridleddiscretion on tribunals to avoid wholly arbitrary decisions. Inorder to invoke this Article specific consent from the party isrequired.Ex aequo et bono was also evaluated by the PCIJ in the FreeZone case (1929) between Switzerland v. France, on the issueof free trading zone rights under the Treaty of Versailles 1919.France challenged such a right on the basis that a clauseabrogating those parts of the Treaty was agreed to bySwitzerland. Under the arrangement, Swiss citizens were ableto do business in French territory surrounding Geneva withoutpayment of customs duties. The parties formed a specialagreement whereby the PCIJ would first determine the meaningof the clause, failing a private resolution of the dispute, and"settle" all outstanding questions. The Court found that theclause did not abolish the regime in regard to the opportunity tosettle disputes if the disputants failed to settle the dispute bythemselves. The court rejected the French claim that a specialagreement empowered the court "to settle all questions". 108However, it seems that recourse to this branch of equity isignored by the community of nations.3.7 Equity for Scarce Resource AllocationIncreasing innovation in science and technology enables statesto harness resources from the deep ocean, the Continental Shelfand EEZ, which eventually gave birth to new internationalconflicts. There were no specific rules applicable in suchcomplicated circumstances, so equity embraced a newdimension to accommodate the interests of all concerned in acareful manner. Equity brings important advantages to this task,107 Supra note 69, p. 570; also see ICJ Reports 77, (1956), pp. 56-100.108 Free Zone Upper Savoy and the District of Gex, PCIJ Reports, (1930)pp. 10, 34, 40.
Equitable Utilisation / 141 142 / International Watercourses Law and Its Application in South Asiaaffording judges a measure of discretion, within a flexiblestructure and commensurate with the uniqueness of eachdispute of scarce resource allocation. As will be illustratedbelow, the ICJ has advocated the formula for equitable resultsand equitable sharing in the interpretation of equitableutilisation. It has been said that without the principle of equity,the allocation and sharing of such resources is not possible, anda great disaster of conflicts has been prevented by itsapplication. So far, three models of equitable allocation haveemerged to this end. 109 The first model is that of correctiveequity, and the second that of broadly conceived equity. Bothof these models displace strict law but are still rule based,evolving into a set of principles for the accomplishment ofequitable allocation. The third model of common heritageequity sets out rules for the exploitation of resources byensuring the conservation of humankind’s common patrimony.Application of equity in this area will make it easy tounderstand and apply equity in IWL.3.7.1 Corrective Equity in Trading ArrangementsCorrective equity has played a substantial role in providingjudicious treatment and justice to all nations. It seeks to providefairness in the sharing of resources underneath the sea, thecontinental shelf and from the open sea. 110 The use of equityhas been long executed in order to get a fair benefit andprotecting the interests of developing nations in internationaltrade and commerce area. Similarly, it seeks to protect the rightof developing nations in the international trading system,within the framework of GATT (now WTO), by providing thebasic rules of world trade. 111 The GATT includes a mechanismfor a generalised system of preference (GSP) in order tointroduce the notion of fairness into the international trading109 Supra note 69, p. 572.110 Ibid.111 Ibid. See GATT document in 55 UNTS, (1947) p. 187.regime. The other provision is that of the Most FavouredNations (MFN) clause, which guards against any negativeimpact of trade on the legitimate rights of developing nations.The Lome Convention 112 sought to inject equity into the globalcommodity market to protect the interests of developing andweak nations through the creation of a compulsory fund for thestabilization of export earning called STABEX. Under thissystem, a country is eligible for the international stabilisation ofthe price of a product representing at least 5% of its total exportearnings in the year preceding the application for STABEXassistance. Such export earnings from the product must drop atleast 4.5% from the average value calculated over a six-yearreference period for STABEX aid to become operative. 113 Fromthe point of view of protecting the interests of developing andweak nations, the above mentioned arrangements areparamount in promoting the integration and participation ofnations in a fairer international trade system. Equity is at itsheart. The European Union and the US have provided specialrights and facilities to developing nations as trading partners. 114Hence, the notion of equity favours weak and vulnerablenations that are not fully able to compete in the internationalarena. 115 Special consideration is given to such nations in orderto safeguard their interests, and this concept can be utilised inIWL issues by providing priority to the poorest countries. In the112 Supra note 69, p. 573-574.113 There are four versions of the Convention, i.e., Lome I, II, III, IV, forthe enhancement of fairer trading regime.114 Ibid. Also see Fourth ACP-EEC Convention and Final Act in 29 ILM(1989), p. 783.115 “The EU has provided special quotas for sugar exports from the leastdeveloped states”, The Rising Nepal, August 9, (2002); also see staff,“Trade is Aid” The Kathmandu Post 25 February, 2003. The UnitedStates has provided 38 sub-Saharan African states a duty free quota ontheir exports of Apparels and Textile Products under the provision ofthe African Growth and Opportunity Act, 2000. Nepal is alsoexpecting such facility on its garments in the US market and Australiahas made its market duty free and quota free for 49 landlockedcountries and East Timor from June 2003.
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International WatercoursesLaw and I
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PrefaceIn this book, the author has
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International Treaties and other Do
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ADBAJILAus.JILAYBLADPILALCCASEANAGO
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GlossaryMap of the Ganges BasinThe
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Chapter- ThreeEquitable Utilisation
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Introduction / 1 2 / International
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