Philippines – China Arbitration RESULT

The eagerly awaited ruling in the Philippines-China case was issued on July 12 2016.

The Award was hailed as a victory for the Philippines with China publicly denouncing the award and the jurisdiction of the tribunal. Although the award is final and binding on both Parties the Permanent Court of Arbitration has no powers of enforcement.

In January 2013 the Philippines brought the case against China concerning a dispute over the maritime jurisdiction of the West Philippine Sea/South China Sea. The dispute centred around China’s historic claim to its ‘nine-dash line’, and the status of rocks and low-tide elevations and their entitlement to maritime zones beyond the territorial sea. The application specifically excluded any reference to sovereignty or boundary delimitation which became outside the jurisdiction of the Tribunal.

The Tribunal conducted an initial phase to examine its jurisdiction and the admissibility of the claim and rendered its interim Award in October 2015, the final award was issued on July 12th 2016.

The key findings are:

  1. China’s historic claim to the whole South China Sea (the ‘nine-dash line claim’) has no basis in law. Although Chinese fishermen had historically used the islands in the South China Sea there was no evidence that they had exerted exclusive control over the waters and resources. Accession to the UN Convention on the Law of the Sea with its exclusive economic zone provisions overrode historic claims that are incompatible with the distance-based EEZ regime.
  2. Of particular interest are the Tribunal’s findings on the status of ‘island’ features. Article 121 of UNCLOS deals with the status of islands that are entitled to a full set of maritime zones, and paragraph 121.3 with rocks – those features that can’t support human habitation or economic life of their own and have a territorial sea but no EEZ or continental shelf. This distinction has been complicated in the South China Sea by extensive island building and land reclamation on reefs. The Tribunal found that this ‘rock’ provision depends upon the objective capacity of a feature, in its natural condition, to sustain either a stable community of people or economic activity that is not dependent on outside resources or purely extractive in nature. It also found that transient occupation by itinerant fishermen or official personnel did not amount to inhabitation by a stable community independent of outside support. As a result the tribunal concluded that none of the Spratly islands is capable of generating extended maritime zones.
  3. The Tribunal found that evidence of the ‘natural condition’ of islands and reefs based on historic (often 19th century) surveys was more relevant than modern satellite imagery, and that modifications to improve their habitability does not affect their status based on their original nature. Many of the features, e.g. Mischief Reef, Second Thomas Shoal and Reed Bank, are submerged at high tide and are not entitled in themselves to any maritime space, and as low-tide features are not capable of appropriation i.e. a sovereign claim.
  4. The Tribunal found as a result that these several features submerged at high tide form part of the exclusive economic zone of the Philippines, far beyond any possible entitlement of China. By its reclamation and other actions on these features China had violated Philippines sovereign rights with respect to its EEZ and continental shelf.

So far China has responded by rejecting the award as ‘ill-founded’ and saying that it will not be bound by it. It reaffirms its position that China has had 2000 years of continuous exercise of sovereignty and jurisdiction over the islands. It has also stated that it is determined to maintain peace and stability in the area.

The reaction in the Philippines has been muted, not wanting to inflame the situation with its neighbour.

The award is a major loss of face for China but may serve to bring them to the negotiating table. Their official statement rejecting the findings of the Tribunal states that they are ready to resolve the disputes through negotiation and consultation, including joint development zones or other provisional arrangements of a practical nature.

It will be an interesting ride as China asserts his historical claim against its neighbours emboldened by international law and recognition.