The South China Sea case: Chess Arbitration?

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This post looks into the wider questions The South China Sea recent award raises and its possible impact.   Looking back at the rare examples in international law in which States chose not to appear to participate in the proceedings, I address questions such as “what good is an award that cannot be enforced” and what role has arbitration in that context.  I argue that contrasting with conventional dispute resolution in which the award puts an end to a dispute, the award in the South China Sea case was neither an end in itself, nor necessarily an attempt to get leverage on the part of Philippines, to negotiate with China at bilateral level. After all, counsel for Philippines himself has argued that “bilateralized negotiations had failed”.  I argue that much like a chess-movement, the South China Sea case is rather the means for something else in a broader chess-like strategy: (a) as a brick on which other disputes can be built (b) to attempt the multilateralization of the dispute concerning the South China Sea, to involve all those countries with claims in respect of the disputed sovereignty and entitlements over the South China Sea.

A recent article entitled “International arbitration- a solution to diplomatic disputes?” and discussing the Enrica Lexie case (the arbitration case initiated by Italy against India under the United Nations Convention on the Law of the Sea (“UNCLOS”), on 26 June 2015), asked itself whether inter-state arbitration could be an effective political tool to resolve diplomatic disputes.

In the case in question, a stalemate situation between India and Italy, which arose from the killing of two Indian fishermen 20 nautical miles from the Indian coast by an anti-piracy naval detachment of an Italian commercial oil tanker, the Enrica Lexie, was finally broken by means of international arbitration.   The events, including the killing of the two Indian fishermen, had led to the detention in India and subjection to criminal proceedings of two Italian marines and to a prolonged crisis in the diplomatic relations between India and Italy.     Provisional measures were issued on 29 April 2016 by an Arbitral Tribunal constituted in accordance with Annex VII of UNCLOS, where, based on considerations of humanity the tribunal ordered that the remaining Italian marine who was still physically in India under bail be allowed to spend the remaining time of his bail in Italy pending a final decision in this case (The Italian Republic v. The Republic of India (The “Enrica Lexie” Incident), PCA Case NO. 2015-28, Order 26 April 2016, § 107).

The Enrica Lexie case is a perfect example of the efficacy of international law in resolving contentious matters. Provisional measures, issued in the context of arbitration, have been complied with by the parties. The arbitral process is geared towards a final award that would finally resolve the dispute.   The award is an end in itself. After all, parties normally go to courts or to arbitration to settle disputes. In dispute resolution the judgment or award is the end of the dispute.

But what if an arbitral award is not an end in itself but rather the means to something else? What if you go to arbitration knowing that you may obtain an award that may not be enforceable (i.e. because a party contests the legitimacy of the tribunal; its jurisdiction): what is the role of arbitration in that context –what purpose, if any, has, obtaining an award you know you may not be able to enforce? Can legal mechanisms such as international arbitration merely seek a positional advantage, in a diplomatic war?

The much awaited final award in The South China Sea case (The Republic of The Philippines and The People’s Republic of China, PCA Case No 2013-19, Award, 12 July 2016), the arbitration case brought by Philippines against China under UNCLOS, delivered last 12 July, (addressed in earlier posts here and here) poses broad and interesting questions on dispute resolution and in particular, on the unconventional role of arbitration, as a mere strategic positioning in the chessboard of a wider spectrum of contentious issues concerning territorial and maritime delimitation in a strategic zone: The South China Sea. After all, according to geopolitical analysts, “more than half of the world’s annual merchant fleet tonnage passes through [its] choke points, and a third of all maritime traffic worldwide”, as noted by R Kaplan in the Asia’s Cauldron: The South China Sea and the End of A Stable Pacific.

Single-party adjudication?

The case, brought by the Philippines against China, concerning “the legal basis of maritime rights and entitlements in the South China Sea, the status of certain geographic features in the South China Sea, and the lawfulness of certain actions taken by China in the South China Sea”(The South China Sea Arbitration, § 2) was adjudicated by a tribunal constituted (as in the Enrica Lexie case) under Annex VII of UNCLOS. Its jurisdiction however, was not accepted by China. China had accepted the provisions of Section 2 of Part XV on compulsory dispute settlement procedures under UNCLOS.   However, it had excluded from such procedures disputes of territorial sovereignty or disputes, which China had agreed with other States Parties to settle bilaterally. China regarded the subject-matter of the arbitration to be the territorial sovereignty over the relevant maritime features in the South China Sea and considered that the disputes submitted by the Philippines “would constitute an integral part of maritime delimitation between the two countries” (§ 13). China also considered that the tribunal lacked jurisdiction because “China and Philippines ha[d] agreed through bilateral instruments […] to settle their relevant disputes through negotiations” (§ 13).     As a result, China did not participate in the proceedings.

In its Award on Jurisdiction and Admissibility issued on 29 October 2015, the tribunal nevertheless found it had jurisdiction in the case.

Annex VII provides that, in the event that a party does not participate in the proceedings, a tribunal “must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.” In its 12 July press release, conscious of that fact, The South China Sea tribunal stated: “throughout these proceedings, the Tribunal has taken steps to test the accuracy of the Philippines’ claims, including by requesting further written submissions from the Philippines, by questioning the Philippines both prior to and during two hearings, by appointing independent experts to report to the Tribunal on technical matters, and by obtaining historical evidence concerning features in the South China Sea and providing it to the Parties for comment”. As put by Philippe Sands -counsel for Philippines in the case- in a recent event at Chatham House (The Royal Institute of International Affairs), which was not held under Chatham House rules, “The Tribunal bent over backwards to be respectful of China’s concerns; it bent over backwards to any concerns or arguments that might have been made by China.” Professor David Ong of Nottingham Law School put forward the view that this was “single-party adjudication…[the] Tribunal did not take into account issues of thresholds and burden of proof.

This peculiar feature of the Philippines-China arbitration (the fact that one party did not participate in the proceedings) is nevertheless not without precedent in international dispute resolution. It brings to mind not only the célèbre case Military and Paramilitary Activities in and Against Nicaragua (Nicaragua v. United States) Judgment. I.C.J. Reports 1986, p. 14) litigated before the International Court of Justice- a case in which the United States rejected the jurisdiction of the Court and never complied with the judgment.   It brings to mind other more recent instances, such as the Arctic Sunrise case (Kingdom of Netherlands v The Russian Federation, PCA Case No 2014-02, 14 August 2015), an inter-state arbitration adjudicated by an arbitral tribunal constituted under Annex VII of UNCLOS, in which the Russian Federation chose not to appear -a case in which nevertheless the Russian Federation complied with the orders of the tribunal. It also brings to mind the ICJ Advisory Opinion in the Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory case, a case different in nature, as it was non-contentious, but nevertheless relevant, as the ICJ was to produce a legal pronouncement on matters in which a non-appearing party had direct interest. In said case, Judge Buergenthal issued a Declaration stating (at § 1):

[…], I am compelled to vote against the Court’s findings on the merits because the Court did not have before it the requisite factual bases for its sweeping findings; it should therefore have declined to hear the case. In reaching this conclusion, I am guided by what the Court said in Western Sahara, where it emphasized that the critical question in determining whether or not to exercise its discretion in acting on an advisory opinion request is

“whether the Court has before it sufficient information and evidence to enable it to arrive at a judicial conclusion upon any disputed questions of fact the determination of which is necessary for it to give an opinion in conditions compatible with its judicial character” (Western Sahara, Advisory Opinion, I. C.J. Reports 1975, pp. 28-29, para. 46).

In my view, the absence in this case of the requisite information and evidence vitiates the Court’s findings on the merits.

What triggered his Declaration was that Israel had chosen not to participate in the case. Over 10 years after the Advisory Opinion was handed down, not much has changed concerning the Wall.


The Nature of the Arbitration

Sands refers to the merits aspect of the South China Sea award as a “clear ruling”. He remarks emphatically: “The Tribunal has said nothing about sovereignty, nothing about delimitation. The ruling is on the nature of certain features”.

But how clear is the nature of the arbitration?

The tribunal noted indeed that the arbitration concerned “the source of maritime entitlements in the South China Sea and the interaction of China’s claimed historic rights with the provision of the [United Nations Convention on the Law of the Sea]” (§ 170). It held that the dispute did not concern maritime boundary delimitation or sovereignty “insofar as the Philippines has asked the Tribunal to determine the source of rights to maritime areas, and not to decide sovereignty over any land features within the South China Sea.” (§ 170)

Chris Whomersley, a former Deputy Legal Adviser in the United Kingdom’s Foreign and Commonwealth Office disagrees. “The real issue was disputed sovereignty over land territory”- he asserted at the same roundtable where Sands made his comments.   He pointed out that there is no precedent for deciding merely on “status of ‘special features’ unless sovereignty is disputed and cannot be decided by the tribunal. China itself had made public statements on a similar line arguing that “It is meaningless to indulge in the empty talk on the legal status and entitlements of maritime features without making a preliminary decision on who is the “coastal State” and in separation from State sovereignty. The legal status and entitlements of maritime features do not constitute actual disputes in themselves, and there is no precedent in international law deciding otherwise.“ (The South China Sea Arbitration, § 446)

A case of “putting the cart before the horse”?

Was the separation made by the tribunal between sovereignty (delimitation) on the one hand and status of a feature (land/territory) on the other, artificial?   For Whomersly the question of the status of any feature is integral to maritime boundary delimitation –to the drawing of the line. “If you take the decision on Scarborough Shoal, that ‘it had to be a rock for the purposes of the Convention’ – implications follow.”

The tribunal found that Scarborough Shoal is a “rock” for the purposes of Article 121 (3) of UNCLOS (§ 554). It concluded that there was “no evidence that [it] could independently sustain an economic life of its own.” (§ 556). There are implications in respect of the application of Article 74 (Delimitation of the exclusive economic zone between States with opposite or adjacent coasts) and Article 83 (Delimitation of the continental shelf between States with opposite adjacent coasts) of UNCLOS. To Whomersly’s view The South China Sea arbitration “is a case where the tribunal put the status cart before the sovereignty horse”.   Whomersly’s point has force. There has not been precedent where the legal status and entitlements of maritime features have been decided outside a claim concerning sovereignty where different features are weighed and seen collectively in relation to a particular claim on sovereignty.


The Impact

The nearly 500-pages award has been held to be a sweeping victory for the Philippines.

Whilst the award represents in the view of some, a “David’s over Goliath’s like-triumph”, Professor Julia Xue, a Fellow at the International Law Programme of Chatham House, describes the award as one that may “ruin the reputation of international law, the competence of UNCLOS”.

China rejects the award issued by a tribunal, which it argues, had no jurisdiction to hear the case.

But the significance of the award goes beyond the additional bargain power that Philippines may have gained with a view to a possible bilateral settlement. After all, as asserted by Sands, in his opinion, “Bilateralized negotiations have failed”.   The significance of the award seems rather to point at the attempted multilateralization of the dispute concerning the South China Sea to involve all those countries with claims in respect of the disputed sovereignty and entitlements over the South China Sea. By contrast, China takes the view that the South China Sea issues are to be resolved bilaterally in each case.

Although the award is binding only in respect of China and Philippines, the tribunal’s findings –argues Sands- can be relied on by other parties, when making their own claims. As Sands warns: “we would probably be seeing more litigation surrounding the South China Sea”.  

Seen from that perspective, the South China Sea arbitration may just be compared to a carefully-thought chess movement in a wider chess strategy -the opening with White in a sort of legal chess game that has placed Philippines now in a positional advantage for the next move. From that perspective, the award in itself is just a movement upon which other movements will be building in a theatre in which law and politics meet.

Law as process

Then, how is one to understand the role of arbitration in that context?

In his book The South China Sea Arbitration: A Chinese Perspective, Professor Talmon argues that the reason why the Philippines adopted “a confrontational approach” was to “publicise its case against China to the world.”

A conversation I had many years ago in between sessions of the International Law Commission in Geneva with the late Iain Brownlie comes to my mind. We discussed the extent cases impact politics and vice versa.     He told me: “When the Nicaragua provisional measures request was resolved in favour of Nicaragua, it was as if we had already won the case.” Brownlie had been counsel for Nicaragua and he was explaining to me the way he saw, politics and law interact sometimes. The case had just started, but winning the provisional measures was “almost as if winning the case” due to the large media attention and public opinion impact.

There is no avoiding the essential relationship between law and politics”- points out former ICJ judge Rosalyn Higgins, in her book Problems & Process (OUP, 1994 at 5). Just as “extra-legal considerations are part of the legal process” as she aptly noted, we can see in the South China Sea case that legal processes may be part of wider extra-legal processes.   It goes back to the essential relationship Higgins did not fail to acknowledge.

What is it that makes states regard international law as ‘binding’ then? Higgins observed that whilst some pointed at the “natural obligations of justice” which were “necessary for subsistence and self-preservation”, others focused on “consent” as the key to the binding nature of international law. The route the South China Sea case may take, may indeed range between those two paradigms: “consent” (or rather lack of consent for the award (in the Chinese view)) on the one hand and a need for “subsistence and self-preservation” in the South China Sea.   Whatever route it takes, it is clear that international law would take the form of a process, which the South China Sea arbitration may have initiated.


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Lijun zhao says

August 10, 2016

I found the discussion on the jurisdiction is very persuasive with persuasive evidence. I like reading the direct quotation from the ICJ.