Philippines v China: first thoughts on the Award in the South China Seas Case

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Any international lawyer looking at a news site in the last few hours will have seen that the final award has been handed down at the Permanent Court of Arbitration in the Philippines v China dispute brought under the UN Convention on the Law Sea Annex VII procedure. The arbitral tribunal’s decision is simply historic. While Philippines has lost on a number of smaller points, the scale of its win overall is much greater than most commentators were expecting.

What follows is a very preliminary comment – and I stress that faced with a 500 page decision I may well revise my views later. It is also more in the nature of an explainer than a deep dive on any of the many legal questions already highlighted below. (This is also an excessively long post, for which I apologise.) However, on a first, quite brief, examination the tribunal has attempted to be meticulously fair to China and has applied the UN Convention on the Law of the Sea strictly and thoroughly. It has delivered a result which was, by and large, predictable.

James Kraska of the US Naval College has summarised the key holdings as:

  • the nine dash line has no basis in law,
  • there are no islands in the disputed area within the meaning of Article 123, UNCLOS,
  • China has interfered in the Philippines’ EEZ; and
  • China’s actions have aggravated the dispute.

I would add to this list three matters. First, the Tribunal has concluded that Mischief Reef is a low tide elevation over which no State can claim sovereignty or possession. This means it is simply a maritime feature within the Philippines exclusive economic zone (EEZ). Chinese island-building activities there are thus not merely without legal effect but are in violation of the sovereign rights of the Philippines.

Second, it has found that China has breached various obligations under UNCLOS regarding the protection and preservation of the marine environment by having caused severe and irreparable harm to coral reef ecosystems in its construction of artificial islands in the South China Seas.

Third, international tribunals normally bend over backwards to avoid findings of bad faith against a state. That is, one cannot act in bad faith without violating some other substantive right. So most tribunals consider it sufficient to stop at determining that a right or duty has been violated. This tribunal has found China violated Article 300 of UNCLOS: the duty to act in good faith. This is an extraordinary rebuke and a clear indication that the law of the sea dispute resolution system will not be cowed by the posturing of the superpower. As a matter of principle, it takes a principled stand on the supremacy of the rule of law. As a matter of pragmatism, it flies in the face of the conventional wisdom that angering China over this dispute could jeopardise the stability of the law of the sea system.

I would like to focus on this very preliminary comment, however, on three particular issues:

(1) why criticism of the constitution of this tribunal and its finding it had jurisdiction over the dispute was always overblown;

(2) the finding against any claim of Chinese historic rights in the South China Sea, necessarily invalidating the nine dash line;
(3) the conclusion of the tribunal regarding Chinese artificial island building on Mischief Reef.

Questioning jurisdiction

The Chinese strategy in this case has always been to challenge the jurisdiction and legitimacy of the Tribunals without participating in proceedings. This culminated in a government press piece today involving a peculiar mix of ad hominem attacks on tribunal members and quoting Professor Stefan Talmon on whether the tribunal correctly found that it had jurisdiction.

The first point to make is that attacking tribunal members individually is transparently the argument of a sore loser. The tactic is particularly without merit given that China voluntarily forfeited its opportunity to participate in the process of selecting arbitrators, leaving the President of ITLOS to fill the vacancies on the ad hoc panel.

The further point is that, despite some scholarly commentary to the contrary, the tribunal finding it had jurisdiction in this case was not eccentric or bizarre. Certainly, both China and a number of academics have made the claim that this was merely a disguised sovereignty dispute over various maritime features in the South China Sea or a disguised maritime delimitation dispute. The argument being that sovereignty disputes are properly considered to be outside the scope of the convention (see my previous discussion of such arguments here), and that China had exercised a perfectly valid opt-out clause in relation to maritime boundary disputes.

The difficulty with this line of argument was always that international tribunals have long held to the principle that the fact that certain aspects of a dispute may be non-justiciable or highly political, is no reason (short of proof of abuse of process) to refuse to hear a case concerning any legal questions actually falling within jurisdiction.

Alan Boyle as long ago as 1997 made the point that the intricate series of exclusions and opt outs from the scope of compulsory dispute settlement under the UN Convention on the Law of the Sea made it possible that jurisdiction over a dispute might turn on how the dispute was argued and characterised. That is, he argued, a tribunal lacking jurisdiction over a maritime boundary dispute, might still have jurisdiction to answer the legal question whether a particular maritime feature claimed by one state was capable of generating zones such that there could be a dispute as to overlapping maritime entitlements with a neighbouring State.

This was precisely the kind of clever litigation strategy the Philippines pursued: questioning not boundary delimitation or sovereignty, but rather whether the features in question were capable of generating any zones at all. In this it comprehensively won. Any protestations that such a result is capricious or an abuse of the Convention ignores scholarship that has been well known for some time.

Historic rights

There were only ever two legally arguable interpretations of the famous Chinese nine– dash line in the South China Sea. The most plausible view, put by Gao and Jia in the American Journal of International Law was that the line: (a) represented a claim that China had sovereignty over all maritime features within it; and (b) enough of those were islands (within the meaning of UNCLOS) capable of generating 200 nm EEZs that the results might enclose the approximate area designated by the line. The other possibility was that China had some special ‘historic rights’ throughout this area. The difficulty with the latter claim was that such rights must typically have been continuously asserted over a long period and generally acquiesced in.

Nonetheless, the hope for China was the fact that it had made a permissible opt-out declaration under article 298(1)(a)(i) UNCLOS. This meant it did not have to accept the ordinary principle of compulsory dispute settlement under the Convention in relation to disputes concerning maritime delimitation or disputes ‘involving historic bays or titles’. Thus, the arbitrators had to closely examine the history of the law of the sea and the negotiation of UNCLOS regarding ‘historic bays or titles’. The key word is ‘title’. In law, title denotes complete ownership – sovereignty. Sovereignty in the strict sense in the law of the sea extends only as far as the 12 nautical mile territorial sea. Beyond that one speaks of sovereign rights, being rights falling short of title. The tribunal found that the historic rights China claimed in the South China Sea fell short of title, though it did appear to assert special rights in respect of the living and nonliving resources of the South China Sea (paras 228 and 229).

So there was no legal obstacle to considering whether those rights survived UNCLOS and were opposable to Philippines. Indeed, the tribunal’s earlier decision on jurisdiction had already signalled that the question of the interaction between UNCLOS and prior legal regimes was a question of the ‘interpretation and application’ of UNCLOS and therefore one properly falling within the jurisdiction of an Annexe VII Tribunal.

The critical question then is whether the claimed Chinese historic rights were compatible with the Convention. (The tribunal expressly did not rule out the possibility that in certain circumstances prior agreements or historic rights might be preserved under UNCLOS, see para 238 and cases such as Mauritius v UK). The critical point here, however, was that the right asserted by China are precisely the rights other states would ordinarily enjoy in their EEZ. Such rights were therefore incompatible with UNCLOS and not preserved under the Convention.

This is the dynamite conclusion. It necessarily means China’s nine dash line is without legal significance.

Mischief Reef

In broad terms the law of the sea distinguishes three types of maritime features which might generate maritime zones. The critical concept is that of an island (being a naturally formed area of land above the water at high tide: Art 121 UNCLOS), capable of generating a full suite of maritime zones including a 200 nm EEZ. Less useful to states are ‘rocks’ incapable of human habitation which generate only 12 nm territorial seas. Finally, there is the category of so-called ‘low tide elevations’, maritime features which are only occasionally above the surface of the water. These generate no zones, but if there are sufficiently close to a coastline might affect the baselines from which a territorial sea is measured. Low tide elevations, however, outside states’ territorial seas are not capable of appropriation: no one may claim sovereignty over them and they have no legal status. The final category is that of an artificial island generating only a 500 metre safety zone (Art 60(5) UNCLOS).

Now, the best available theory for China was that had Mischief Reef been classified as a rock it could have been the subject of a sovereignty dispute between China and the Philippines. Such a sovereignty dispute would be, on the conventional view, be difficult or impossible to bring within the Convention. However, as a preliminary matter of fact the maritime feature is classified as being neither a rock nor an island but a low-tide elevation then no question of sovereignty can arise.

In context, this meant that Mischief Reef was not capable of being ‘owned’ or generating zones and was simply fell within the Philippines’ EEZ. Indeed, the tribunal concluded that none of the maritime features involved in the case generated substantial zones. (I have not had time to examine the evidentiary basis for this conclusion, and expect it to be subject to much commentary in the days to come.) If this is the correct conclusion, then the issue of opposing zones needing delimitation between the two parties is simply off the table and with it China’s argument that the tribunal lacked jurisdiction.

The necessary consequence of such a finding is that Mischief Reef it is located within the Philippines’ EEZ. The coastal state has the exclusive right within the EEZ to authorise and regulate the construction of artificial islands. China’s construction of an artificial island on Mischief Reef, including three airstrips and other facilities, therefore, is a violation of the Philippines sovereign rights.

The tribunal also has a bit to say about China’s failure to restrain its nationals from fishing in areas of the Philippines’ EEZ and the ecological destruction wrought in the creation of this and other artificial islands.

Final thoughts

Legally, this is game changing. While acres of analysis will follow in days to come, this is a huge symbolic blow to the legitimacy of China’s position. Diplomatically, it will be hard to maintain Chinese claims of exceptional historic rights having had a near comprehensive legal defeat delivered by an independent third-party adjudicator properly constituted under a treaty to which China is a signatory. While this will obviously not reverse Chinese policy, and may well make it harder for China to back down, China is now in something of a corner. It will be hard to maintain its claims other than through a policy of force. Historically, superpowers have usually found that the rules of international law (and the law of the sea) tend to favour their position and that it is easier to exert influence through a rules-based system than against it. Scholars will be fighting for some time over whether pragmatically this was the right result. Legally, on first examination, it appears entirely defensible.

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interested_bystander says

July 12, 2016

Do you know if the Award itself is publicly available? I can't seem to access it from the PCA website.

Mary Ellen O'Connell says

July 12, 2016

Thank you, Douglas, for this swift analysis--and James Kraska! I especially appreciate your final paragraph. When the media inevitably add that the decision is not enforceable they overlook the importance of having an authoritative decision on these issues. Diplomacy has a new starting point.

I am happy to report that the U.S. government is characterizing the decision as "binding" and calling on all parties to "comply."

Gerardo Chadid says

July 12, 2016

This judgement is truly a game changer. The more one reads it the better it gets, the PCA did not hold anything back and did a thorough job. What so far has cough my attention is the plausible implications that this analysis on historic rights might have for non-party States to UNCLOS.

Daniel says

July 12, 2016

Dear Douglas,

Thank you for your succinct and thoughtful snapshot. Just a question concerning the award: would it be proper for a tribunal whose jurisdiction is based upon the ‘interpretation or application of this Convention (i.e. the UNCLOS)’to adjudge the legality of China’s alleged historic rights, which, as far as I know, is based upon customary international law? The core of Nine Dash line, as the Tribunal points out, lies in ‘the interaction between UNCLOS and prior legal regimes’. For me, this interaction can be more properly defined as the relations between the treaty law concerning EEZ and continental shelf and customary law concerning historic rights. I notice that the tribunal in the award concerning merits has deliberately refrained from using the term ‘customary international law’. When the tribunal discusses this interaction (particularly in para 230-247), to a large extent it assumes the alleged historic rights regime is based upon a prior treaty or agreement, and relies on the Vienna Convention on the law of Treaty to clarify this interaction. For me, it is misleading to refer to the Convention of Treaty in this connection. The tribunal should have shown how the customary regime has interacted with the treaty after the UNCLOS entering into force through state practice and international jurisprudence. The tribunal, however, only through a textual interpretation of the UNCLOS per se, reaches the conclusion that the UNCLOS intends to provide such a complete basis to regulate and settle ‘all issues relating the law of the sea’ that any customary rights prima facie incompatible with the UNCLOS would be ‘superseded’ by the treaty regime. For me, this is a ‘progressive’, but unconvincing, reasoning.
I agree that if all parties participated in the arbitration, clarified their legal claim and agreed on the applicable law, this interpretation on the interaction between treaty and custom could have been progressive and historic. But now the case is that one party did not participate, and the tribunal could at best assume and construe China’s legal claim concerning the night dash line (as Talmon has pointed out). In this context, the tribunal should have adopted a more cautious approach in justifying its jurisdiction or at least should have confined itself strictly within the scope of ‘interpreting and applying the UNCLOS’. Unfortunately, the tribunal was so ambitious, if not so hasty, in seeking to solve South China Sea problem in this arbitration, that in the most crucial problem of the arbitration, i.e. the legal nature of the nine dash line, that it gave up the most powerful weapon of law – persuasiveness.
My last thought. I can understand the joy from many international lawyers, especially those in the West, after the rending of this award. They may sincerely hope that through this arbitration international law finally has a say in one of the most high-profile problems in East Asia, brings peace to the region, and manages to bind a (rising?) superpower. But this view is probably too optimistic. The fact that a forcible arbitration based upon dubious jurisdiction, sat mainly by European arbitrators, has reinforced Chinese impression that international judiciary activities are manipulated by the Western powers against China, or a disguised plot against the Communist regime. And as to peace in the region, you might have been right to predict that the immediate effect of the award in East Asia is probably not peace but tension. But I disagree with you as to the topic concerning the relation between international law and super power. China may be characterized as a superpower in terms of economic strength, but unlike those succeeding great powers in the West, China never perceives itself as a superpower in terms of international law making. In fact, as far as I know, both the leadership and the public opinion in China, have long adopted a suspicious attitude towards international law judiciary activities. In practice China has long adopted a reserving attitude in participating in international law. The picture, from China’s perspective, is not that it fails to influence international law as a superpower, but that a rising great power has been, forcibly and unconvincingly, dragged into a Western-centered legal system. This view has long been dismissed as a purely political propaganda, but now it should be taken into more consideration as recently a similar view has been expressed by Chinese international law practitioners. It is still premature to assess the impact of award upon Chinese participation into international law. But I hope it won’t be a Chi-exist.

Joanna Mossop says

July 13, 2016

Douglas, thank you for your excellent summary of some of the key issues arising from the decision. I think that one of the more wide-reaching aspects of the decision is the way the tribunal approached the definition of rocks in article 121(3). It appeared to impose a high standard in terms of demonstrating that an isolated feature meets the criteria to claim an eez and continental shelf. I suspect that there will be a few States that will be very nervous about their own claims as a result.

Tasman Song says

July 13, 2016

The judgment, above all else, is a triumph for international law. The legal certainty and exactitude that this Tribunal has given to the interpretation of Article 121 will settle what has long been an unhelpfully and - at the time of negotiations of UNCLOS - deliberately ambiguous provision. Quite aside from the South China Sea, the jurisprudence will have an impact on states' claims to sovereignty to insular features in other parts of the world. Many other dubious claims already spring to mind. While this judgment has immediate ramifications, it will be just as interesting to see the wider implications of the Tribunal's interpretation of Article 121 in the years to come.

Melissa Loja says

July 18, 2016

Shouldn't the finality of the award depend on Vietnam's and Malaysia's position? The award issued findings/conclusions that clearly prejudice the position of Vietnam on Spratlys as a single unit and formed by islands (not rocks). In the only statement of Vietnam to date reserved comment on the merits of the award. It lauded the resolution of the arbitration process but reiterated the view that the Spratlys is an archipelago.
Malaysia's position that Amboyna Cay is an island with full maritime entitlement is prejudiced by the Tribunal's finding that all high tide elevations in Spratly Islands are rocks with territorial sea. Like Vietnam, Malaysia seems poised to file a position paper with the Tribunal.

ZY says

September 7, 2016

This award is a humiliation to international law, not a "triumph" (I would rather call it a "Trump"). Put aside the reasoning and the basis (which I do not agree), the fact that it could not be enforced makes people doubt whether international law is "law " or not. I have some questions: 1. is the dispute between China and the Philippines a legal issue or a political issue? 2. did this arbitration solve any problems or it create more tension in south China sea? Now put aside the question of historical right (although there are historical rights), what is the nature of this dispute? since when a dispute mostly concerning territory not territorial? Plus, although there is a "court" in the name of PCA, it is not a court.