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Reconsidering the Role of Arbitration in South China Sea

Feb 18 , 2016
  • Nong Hong

    Head of Institute for China-America Studies (ICAS)

In the Arbitration between Republic of Philippines v. the People’s Republic of China, the Tribunal ruled on October 29, 2015, that the case was “properly constituted” under the United Nationals Convention on the Law of the Sea, and China’s “Non-appearance” did not prevent the Court’s accepting jurisdiction. On November 30, the Tribunal concluded the hearing on the merits and remaining issues of jurisdiction and admissibility in the arbitration.

The latest development of the arbitration case puts China in the hot seat with overwhelming media and analyst assessment hinting that China will lose in this case. While celebrating the “legal and moral victory,” however, many analysts seem to overlook an important element in assessing these developments, which is the legal and political implications arising from them. Clearly reading China’s rationale in its choice not to participate in the arbitral procedures is helpful to objectively assess the post-arbitration trajectory developments in the South China Sea.

China holds that the dispute presented by the Philippines constitutes, at its core, a land territorial sovereignty dispute and a subsequent maritime delimitation, which is excluded from the third party compulsory dispute settlement mechanism under UNCLOS, through China’s 2006 declaration. However, the Philippines, with the support of an experienced legal team from the United States, has cleverly attempted to de-link its claims from the terms of “territory,” “maritime delimitation,” and “historic title.” This might have a significant impact on the Arbitration Tribunal, without China’s participation and the missing chance to express its position in a professional legal way. It is also unknown whether the messages that China intends to convey through “amicus curiae” (“friends of the court”) briefs actually reach the five arbitrators and how much weight they may carry and be considered as effective “replies” to the Memorial of the Philippines.

China’s failure to appear in court demonstrates its continued position of “non-acceptance and non-participation” in the arbitration unilaterally initiated by the Philippines. It does not mean disrespect for the Arbitration Tribunal, the permanent court of arbitration and international law, nor does it reflect China’s inability to fulfill its obligations of peaceful settlement of international disputes. China was one of the first countries to participate in national dispute settlement mechanisms, including the Permanent Court of Arbitration.

Since 1980s, the United Nations and other international organizations have called on the international community to set up mechanisms like the Permanent Court of Arbitration to resolve international disputes. To give full play to their functional roles, many international conventions, including the United Nations Convention on the Law of the Sea, have introduced litigation and arbitral procedures in its dispute settlement mechanisms. This was a good experiment and good starting point, but the result was opposite to what one would want. Since its entry into force in 1994, about 20 cases on maritime disputes have been sitting in the International Court of Justice, while only 10 cases were forwarded to the arbitral procedures, mainly because the dispute settlement provisions from the Convention are very complicated and contain disputes and loopholes to a certain extent. A country that does not accept the arbitral procedures will be unfairly portrayed as “not endorsing international law” by an arbitration initiated by one party of the dispute unilaterally.

The arbitral tribunals should limit their jurisdiction to the scope of dispute rather than expanding its jurisdiction. The provisional nature of arbitration determines that that purpose of arbitration is to solve the specific disputes, not to address broader issues. In the case of the South China Sea arbitration, the Tribunal grants itself jurisdiction even though it is aware of China’s consistent position on resolving the territorial sovereignty and maritime disputes through bilateral negotiations. Likewise does it grant itself jurisdiction knowing that China does not wish to participate in the arbitration proceedings, nor does it accept the arbitration rulings, and aware that rulings responding to Philippine’s appeals do not resolve the disputes. The country’s will to resort to negotiation in solving the dispute have been unfairly neglected.

The South China Sea arbitration also raises a question on breaking the balance of the two famous doctrines in the marine system: Mare Clausum (“closed sea)and Mare Librium (“free sea”). These two doctrines generated two major principles of the law of the sea–the principle of domination (“land dominates the sea”) and principle of freedom of the high seas. The United Nations Convention on the Law of the Sea is the combination and compromise of the two principles. The convention not only absorbed the coastal states’ diversified claims on maritime rights, such as the continental shelf and the Exclusive Economic Zone, but also maintained the principle of freedom on the high seas, limiting the rights of coastal states in the exclusive economic zone to the rights to economic activities.

The Arbitration Tribunal’s insistence on adjudicating the legal status of disputed islands in the Spratlys might potentially upset the balance between these two principles. There is only one clause in the Convention, that is, Article 121 defining the island regime. However, the Spratlys are composed of different types of “insular features” (islands, reefs and low tide elevations, reefs, etc.) with various legal statuses, producing different maritime rights and having differing implications for delimitating maritime boundaries. These issues are far from being able to be regulated by just one clause. It is hard to distinguish an island from a rock, and a reef from a low tide elevation. In the Romania v. Ukraine case, the International Court of Justice has chosen to simply draw a delimitation line between the two countries, thus avoiding giving a clear answer on whether the “Serpents’ Island” is an island as requested by Ukraine, or a rock, as claimed by Romania. This demonstrates well how hard it is to differentiate “island” with “rock.” Another issue relates to the maritime zones granted to the islands or other features in the SCS. Applying article 121 (3) to the SCS islands sounds extremelydifficult. Since the status of features may vary over time, so will the result of an application. Since a low tide elevation is not entitled to territorial claims, the judgment of their legal status directly impacts the nation’s sovereignty, leading to territorial expansion or reduction. This makes a judicial determination of their status all the more consequential.

Judging from the recent cases (such as the case of Mauritius v. United Kingdom, Philippines v. China), the arbitral tribunal is eroding and undermining the sovereignty of coastal states and the connotation and extension of their jurisdiction over the sea. It will ultimately damage the interests of all coastal states including Philippines.

As far as the South China Sea dispute is concerned, the involvement of the international arbitration has weakened a nation’s right in establishing regional maritime order. It is clear to all that the power of arbitration mechanisms has gradually strengthened and continues to expand. The arbitral tribunal will give final rulings on arbitration proposed by the Philippines in 2016, and may negate the legal basis of the China’s U-shaped line in the South China sea and the rights within the line. As the Arbitration Tribunal expands its jurisdiction and ignores the legitimate and reasonable claims of the coastal states, tensions between the contracting states of UNCLOS will increase. So described, the arbitration will be not prudently implemented.

The Philippines has been praised for setting the precedent of utilizing a third-party compulsory settlement mechanism for resolving the multiple overlapping claims in the South China Sea. The value that UNCLOS’s compulsory dispute settlement mechanism provides should not be underestimated. However, the impact of the Arbitration Case on regional security should not be overlooked either, given the complex nature of the disputes involving both sovereignty and maritime delimitation. In the short term, the Arbitration Case has increased tensions in the South China Sea and delayed both cooperation and progress towards an agreed Code of Conduct. In the longer term, it might clarify some legal issues, but this is at the risk of undermining the international dispute settlement process. Article 298 of UNCLOS allows states to opt out of the compulsory settlement mechanism in disputes related to sovereignty, maritime delimitation, military activities, among others. This article was achieved through a lengthy negotiation as a compromise to meet the demands of some states that did not wish to address certain disputes through a third party. The utilization of Article 287 in such a case as the South China Sea Arbitration, which obviously involves sovereignty and maritime delimitation, could set precedent that undermines the true spirit of the dispute settlement mechanism of UNCLOS.

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