REPUBLIC OF THE PHILIPPINES

VS
REPUBLIC OF CHINA
“The South China Sea Dispute”

By: Haibe Joe and Cindy Mae Yap

I. PRELIMINARY IN RELATION TO UNCLOS

If the United Nations Convention on the Law of the Sea (UNCLOS) does not apply to the
South China Sea dispute, as when China’s 9-dashed lines are allowed to gobble up the Exclusive
Economic Zones of coastal states as well as the high seas, then UNCLOS, the constitution for the
oceans and seas, cannot also apply to any maritime dispute in the rest of the oceans and seas of
our planet. It will be the beginning of the end for UNCLOS. The rule of the naval canon will
prevail in the oceans and seas of our planet, no longer the rule of law. There will be a naval arms
race among coastal countries.

II. MAP LOCATION OF THE SOUTH CHINA SEA

 The South China Sea is a semi-enclosed sea in the western Pacific Ocean, spanning an
area of almost 3.5 million square kilometres, and is depicted in Map 1 on page 9 below. The
South China Sea lies to the south of China; to the west of the Philippines; to the east of Viet
Nam; and to the north of Malaysia, Brunei, Singapore, and Indonesia. The South China Sea is a
crucial shipping lane, a rich fishing ground, home to a highly biodiverse coral reef ecosystem,
and believed to hold substantial oil and gas resources. The southern portion of the South China
Sea is also the location of the Spratly Islands, a constellation of small islands and coral reefs,
existing just above or below water, that comprise the peaks of undersea mountains rising from
the deep ocean floor. Long known principally as a hazard to navigation and identified on nautical
charts as the “dangerous ground”, the Spratly Islands are the site of longstanding territorial
disputes among some of the littoral States of the South China Sea.

III. FACTS

China asserts maritime rights beyond its UNCLOS entitlements based on several
domestic legislations:
 1992 Chinese Law on the Territorial Sea and the Contiguous Zone;
 1996 Chinese Law on Exclusive Economic Zones; and
 1998 Chinese Law on the Exclusive Economic Zone and the Continental Shelf.

These are the primary sources of its claim of “historic rights” and justification for its
“nine-dash line” in South China Sea.
 The Nine-Dash Line [at various times also referred to as the "10-dash line" and the "11-
dash line"] refers to the demarcation line used initially by the government of the Republic of
China (ROC / Taiwan) and subsequently also by the government of the People's Republic of
China (PRC), for their claims of the major part of the South China Sea. It covers 90% of the
contested waters.

The Nine-Dash Line cut through, and off, areas where SEA States have entitlements
under UNCLOS (EEZ, Contiguous Zones). [China not having a land mass in the specified area]

It would give China rights to within 39 miles of Luzon, 34 miles of Palawan, 24 miles of
Malaysia, among others. These “historic rights” would entitle China to exclusive sovereign rights
and jurisdiction far beyond limits of maritime zones established by UNCLOS –superseding and
nullifying rights of other States.

Effect of China’s 9-dashed lines

The Philippines loses about 80% of its EEZ facing the West Philippine Sea, including the
entire Reed Bank and part of the Malampaya gas field. Malaysia loses also about 80% of its EEZ
in Sabah and Sarawak facing the South China Sea, as well as most of its active gas and oil fields
in the same area. Vietnam loses about 50% of its total EEZ. Brunei loses about 90% of its total
EEZ. Indonesia loses about 30% of its EEZ facing the South China Sea in Natuna Islands, whose
surrounding waters comprise the largest gas field in Southeast Asia.

Dispute in the South China Sea

There is a territorial dispute in the South China Sea that is rooted in conflicting territorial
claims over islands, rocks, and reefs above water at high tide. There is also a maritime dispute
that is rooted in conflicting maritime claims over maritime zones. The dispute involves six
countries bordering the South China Sea.

The 9-dashed lines claim, through which China is aggressively asserting “indisputable
sovereignty” to all the islands and waters enclosed by the lines, is the main driver of the South
China Sea dispute. China’s 9-dashed lines claim encloses 85.7% of the entire South China Sea.
This is equivalent to 3 million square kilometers out of the 3.5 million square kilometers surface
area of the South China Sea.

Applicability of the UNCLOS

 China and the Philippines have ratified the UNCLOS
 UNCLOS took effect on 1994
 UNCLOS provides for a compulsory dispute settlement mechanism for the settlement of
maritime disputes
 UNCLOS is limited only to maritime disputes, not territorial sovereignty disputes
Basis of Arbitration

Article 287 (5) UNCLOS provides that “if the Parties to a dispute have not accepted the
same procedure for the settlement of the dispute, it may submitted only to arbitration in
accordance with Annex VII”

Since both Parties have ratified UNCLOS, both are bound by its Convention including its
provisions under Part XV (settlement of disputes). It satisfies requirement of “consent” of the
Parties.

In November 2012, China informed the Philippines that Chinese surveillance vessels
would remain permanently in Scarborough Shoal. Basically, China is invading Philippine
territory. Philippines has no capacity to retake Scarborough Shoal. The only response was to file
for arbitration

After the Philippines filed in January 2013 its arbitration case against China under
UNCLOS, China’s Foreign Minister Wang Yi declared that the South China Sea dispute should
be resolved in accordance with “historical facts and international law.”

China’s Non-Appearance

On 25 August 2006 (10 years after its ratification), China makes declaration that it does
not accept the procedures in Part XV, particularly Article 298.

Article 298 (a) – “xxx…disputes concerning interpretation or application of EEZ,

Territorial Sea, Continental Shelf, disputes concerning military activities and law enforcement”
 Article 9, Annex VII of the UNLOS: “Absence of a party or failure of a party to defend
its case shall not constitute a bar to the proceedings”

China’s Foreign Ministry has also highlighted in its statements, press briefings, and
interviews that it considers non-participation in the arbitration to be its lawful right under the
Convention.

The Convention, however, does not address the sovereignty of States over land territory.

The Tribunal has not been asked to, and does not purport to, make any ruling as to which
State enjoys sovereignty over any land territory in the South China Sea, in particular with respect
to the disputes concerning sovereignty over the Spratly Islands or Scarborough Shoal.

None of the Tribunal’s decisions in this Award are dependent on a finding of sovereignty,
nor should anything in this Award be understood to imply a view with respect to questions of
land sovereignty. (Paragraph 5, PCA Ruling)

PARTIES’ POSITIONS
 CHINA’S POSITION PHILIPPINE’S POSITION
ON JURSDICTION
First, “the essence of the subject-matter of the The Philippines does not seek in this
arbitration is the territorial sovereignty over arbitration a determination of which Party
the relevant maritime features in the South enjoys sovereignty over the islands claimed
China Sea, which is beyond the scope of the by both of them. Nor does it request a
Convention and is consequently not delimitation of any maritime boundaries.
concerned with the interpretation or
application of the Convention.”
Second, “China and the Philippines have In any event, the Declaration of Conduct is an
agreed, through bilateral instruments and the aspirational document, not a legally binding
Declaration on the Conduct of Parties in the agreement. Moreover, there is no bilateral
South China Sea, to settle their relevant agreement between the Philippines and China
disputes through negotiations. By unilaterally stating that their maritime dispute shall be
initiating the present arbitration, the resolved exclusively through negotiations.
Philippines has breached its obligation under Although UNCLOS requires an “exchange of
international law.” views” by the parties to the dispute before
recourse to compulsory arbitration, this
requirement cannot be used by a party to
prevent compulsory arbitration.
Third, “even assuming, arguendo, that the The exclusion from the Arbitral Tribunal’s
subject-matter of the arbitration were jurisdiction in Article 298 of UNCLOS refers
concerned with the interpretation or to boundary delimitation of overlapping
application of the Convention, that subject- territorial seas, overlapping EEZs and
matter would constitute an integral part of overlapping ECSs.
maritime delimitation between the two
countries, thus excludes, inter alia, disputes China does not claim that the waters enclosed
concerning maritime delimitation from by the nine-dashed line are its territorial sea,
compulsory arbitration and other compulsory EEZ or ECS. In the first place, the nine-
dispute settlement procedures.” dashed line is not measured from baselines
along China’s coast. The nine-dashed line
cannot possibly delineate China’s territorial
sea, EEZ or ECS.

Fourthly, “China has never accepted any
compulsory procedures of the Convention
with regard to the Philippines’ claims for
arbitration. The Arbitral Tribunal shall fully
respect the right of the States Parties to the
Convention to choose the means of dispute
settlement of their own accord, and exercise
its competence to decide on its jurisdiction
within the confines of the Convention. The
initiation of the present arbitration by the
Philippines is an abuse of the compulsory
dispute settlement procedures under the
Convention. There is a solid basis in
international law for China’s rejection of and
non-participation in the present arbitration.”
China ratified, and therefore is bound by,
UNCLOS. Article 286, section 2 on
Compulsory Procedures Entailing Binding
Decisions, provides that “subject to section 3
(on Limitations and Exceptions to
Applicability of section 2), any dispute
concerning the interpretation or application of
this Convention shall, where no settlement
has been reached by recourse to section 1 (on
Exchange of Views), be submitted at the
request of any party to the dispute to the court
or tribunal having jurisdiction under this
section.” In short, states that ratified
UNCLOS gave their consent, in advance, to
compulsory arbitration with respect to any
dispute falling under Article 298 (1)(a) of
UNCLOS. There is no need to secure again a
state party’s consent to compulsory arbitration
when a dispute arises in the future.

ON THE MERITS: PHILIPPINE’S POSITION

(1) China’s maritime entitlements in the South China Sea, like those of the Philippines, may
not extend beyond those expressly permitted by the United Nations Convention on the Law of
DECISION OF THE TRIBUNAL

A. THE TRIBUNAL’S DECISIONS ON THE SCOPE OF ITS JURISDICTION

1. Whether China’s non-participation constitute a bar to the proceedings?

No. The Convention expressly acknowledges the possibility of non-participation by one
of the parties to a dispute and confirms that such non-participation does not constitute a
bar to the proceedings pursuant to Article 9, UNCLOS.

2. Whether the subject-matter raised by the Philippines’ claims deal with territorial
sovereignty hence outside the scope of UNCLOS?

No. The Philippine arbitration case against China does not involve a territorial dispute but
exclusively a maritime case against China involving the interpretation or application of
UNCLOS.

A maritime dispute can refer to, inter alia, (1) overlapping maritime entitlements or
(2) disputes on the interpretation or application of UNCLOS. The Tribunal noted that
a dispute concerning whether a State has an entitlement to a maritime zone is a distinct
matter from the delimitation of maritime zones in an area in which they overlap. The
Tribunal settles only maritime entitlements and not determination of sovereignty or
delimitation of maritime boundaries.

3. Whether a state may be prevented from making use of the mechanisms under the
convention if they have already agreed to another means of dispute resolution?

No. The Tribunal held that the Declaration is a political agreement and not legally
binding, does not provide a mechanism for binding settlement, does not exclude other
means of dispute settlement, and therefore does not restrict the Tribunal’s jurisdiction
under Articles 281 or 282.

The Tribunal also considered the Treaty of Amity and Cooperation in Southeast Asia, and
the Convention on Biological Diversity, and a series of joint statements issued by the
Philippines and China referring to the resolution of disputes through negotiations and
concluded that none of these instruments constitute an agreement that would prevent the
Philippines from bringing its claims to arbitration.

4. Whether the Philippines failed to fulfil the obligation of exchanging views with
China on the means of dispute settlement as required under Article 283?

No. With respect to the exchange of views on the settlement of the dispute, the Tribunal
held that Article 283 requires parties to exchange views on the means of settling their
dispute, not the substance of that dispute. The Tribunal further held that the Parties had
exchanged views regarding the settlement of their disputes, as required by Article 283 of
the Convention, before the Philippines initiated the arbitration. The Tribunal concluded
 that this requirement was met in the record of diplomatic communications between the
Philippines and China, in which the Philippines expressed a clear preference for
multilateral negotiations involving the other States surrounding the South China Sea,
while China insisted that only bilateral talks could be considered.

Hence, based on the foregoing, the Tribunal found that it has jurisdiction to consider the
Parties’ dispute concerning historic rights and the source of maritime entitlements in the
South China Sea.

B. THE TRIBUNAL’S DECISIONS ON THE MERITS OF THE PHILIPPINES’ CLAIMS

 HISTORIC RIGHTS AND THE ‘NINE-DASH LINE’

1. Whether there are overlapping EEZs between the Philippines and China in the
West Philippine Sea
The waters enclosed within China’s 9-dashed lines do not constitute an EEZ because
the 9-dashed lines are not drawn from baselines along the coast of continental land
or habitable islands. Under UNCLOS, EEZs can only be drawn from baselines along
the coast of continental land or an island capable of human habitation or economic
life of its own, China’s 9-dashed line do not comply with the basic requirement of
UNCLOS for drawing EEZs.
 The Nine-Dash Line cut through, and off, areas where SEA States have entitlements
under UNCLOS (EEZ, Contiguous Zones). [China not having a land mass in the
specified area.)
It would give China rights to within 39 miles of Luzon, 34 miles of Palawan, 24 miles
of Malaysia, among others. These “historic rights” would entitle China to exclusive
sovereign rights and jurisdiction far beyond limits of maritime zones established by
UNCLOS –superseding and nullifying rights of other States.

2. Whether China has historic rights to resources in the South China Sea beyond
the limits of the maritime zones that it is entitled to pursuant to the Convention?

No. The Tribunal found that China’s claim to historic rights to resources was
incompatible with the detailed allocation of rights and maritime zones in the
Convention and concluded that, to the extent China had historic rights to resources in
the waters of the South China Sea, such rights were extinguished by the entry into
force of the Convention to the extent they were incompatible with the Convention’s
system of maritime zones.

 STATUS OF FEATURES

1. Do LTEs and acquire a maritime zone if by reclamation they are raised above at
high water tide?

No. UNCLOS defines an island as a “naturally formed” area of land, surrounded by

water, and above water at high tide.
2. Whether certain coral reefs claimed by China are or are not above water at high
tide

The Tribunal noted that many of the reefs in the South China Sea have been heavily
modified by recent land reclamation and construction and recalled that the
Convention classifies features on the basis of their natural condition. The Tribunal
appointed an expert hydrographer to assist it in evaluating the Philippines’ technical
evidence and relied heavily on archival materials and historical hydrographic surveys
in evaluating the features.

High tide features: Scarborough Shoal, Johnson Reef, Cuarteron Reef, Fiery Cross
Reef, Gaven Reef (North), and Mckennan Reef
Submerged at high tide: Subi Reef, Hughes Reef, Mischief Reef, and Second
Thomas Shoal

3. Whether any of the features claimed by China could generate an entitlement to

maritime zones beyond 12 nautical miles

Article 121 of the Convention: islands generate an entitlement to an exclusive

economic zone of 200 nautical miles and to a continental shelf, but rocks which
cannot sustain human habitation or economic life of their own shall have no exclusive
economic zone or continental shelf — closely linked to the expansion of coastal State
jurisdiction and intended to prevent insignificant features from generating large
entitlements to maritime zones that would infringe on entitlements of inhabited
territory or on high seas and the area of the seabed reserved for the common heritage
of mankind

Entitlements of a feature depend on the a) objective capacity of a feature, b) its

natural conditions to sustain either c) a stable community of people or d) economic
activity that is neither dependent on outside resources nor purely extractive in nature

Even if many of the features are currently controlled by one or other of the littoral
States, which have constructed installations and maintained personnel there and have
been modified to improve their habitability (by land reclamation and construction of
infrastructure), the current presence of official personnel on many of the features does
not establish their capacity, in their natural condition, to sustain a stable community
of people and considered that historical evidence of habitation or economic life was
more relevant to the objective capacity of the features

Temporary of use of features (as in by small groups of Chinese fishermen and from
other states in the Spratly Islands and Japanese fishing and guano mining enterprises)
did not amount to inhabitation by a stable community and that all historical economic
activity had been extractive in nature

All high-tide features in the Spratly Islands are legally “rocks” that do not generate an
exclusive economic zone or continental shelf
 The Convention does not provide for a group of islands (such as the Spratly Islands)
to generate maritime zones collectively as a unit

 Chinese Activities in the South China Sea

1. Lawfulness of various Chinese actions in the South China Sea under the
Convention

Because Mischief Reef, Second Thomas Shoal and Reed Bank are submerged at high
tide and are not overlapped by any possible entitlement of China, they from part of
the exclusive economic zone and continental shelf of the Philippines; the Convention
is clear in allocating sovereign rights to the Philippines with respect to sea areas in its
exclusive economic zone

China had violated the Philippines’ sovereign rights with respect to its exclusive
economic zone and continental shelf: China had a) interfered with Philippine
petroleum exploration at Reed Bank, b) purported to prohibit fishing by Philippine
vessels within the Philippines’ exclusive economic zone, c) protected and failed to
prevent Chinese fishermen from fishing within the Philippines’ exclusive economic
zone at Mischief Reef 11 and Second Thomas Shoal, and d) constructed installations
and artificial islands as Mischief Reef without the authorization of the Philippines

2. Traditional fishing rights at Scarborough

Fishermen from both China and the Philippines and from other countries had long
fished at the Scarborough Shoal and had traditional fishing rights in the area.
Scarborough Shoal is above water at high tide so it generates an entitlement to a
territorial sea, its surrounding waters do not form part of the exclusive economic
zone, and traditional fishing rights were not extinguished by the Convention
China had violated its duty to respect the traditional fishing rights of Philippine
fishermen by halting access to the Shoal after May 2012.

Sovereignty vs. Sovereign rights

Sovereignty bestows full rights, or supreme authority on a country within its
territorial waters, which stretch to 12 nm.

Sovereign rights are not rights deriving from sovereignty but rights of a specific
functional purpose. (Article 56 UNCLOS)

3. Effect of China’s actions on the marine environment

Chinas’s large scale land reclamation and construction of artificial islands at seven
features in the Spratly Islands has caused severe harm to the coral reef environment.
Moreover, Chinese fishermen were engaged in the harvesting of endangered sea
turtles, corals and giant clams on a substantial scale in the South China Sea using
 methods that inflicted severe damage on the coral reef environment; Chinese
authorities were aware of these and failed to fulfill their due diligence obligation
under the Convention to stop them.

4. Lawfulness of conduct of Chinese law enforcement vessels at Scarborough Shoal

in April and May 2012 (Chinese vessels sought to physically obstruct Philippine
vessels from approaching or gaining entrance to the Shoal)

Assisted by an independent expert on navigational safety and expert evidence on

navigational safety provided by the Philippines • Chinese law enforcement vessels
had repeatedly approached the Philippine vessels at high speed and to cross ahead of
them at close distances, creating serious risk of collision and danger to Philippine
ships and personnel. China breached its obligations under the Convention on the
 International Regulations for Preventing Collisions at Sea (1972), and Article 94 of
the Convention concerning maritime safety

 Aggravation of Dispute

1. Whether China’s actions since the commencement of the arbitration had

aggravated the dispute between the Parties.

The Tribunal found that it lacked jurisdiction to consider the implications of a stand-
off between Philippine marines and Chinese naval and law enforcement vessels at
Second Thomas Shoal, holding that this dispute involved military activities and was
therefore excluded from compulsory settlement. The Tribunal found, however, that
China’s recent large-scale land reclamation and construction of artificial islands was
incompatible with the obligations on a State during dispute resolution proceedings,
insofar as China has inflicted irreparable harm to the marine environment, built a
large artificial island in the Philippines’ exclusive economic zone, and destroyed
evidence of the natural condition of features in the South China Sea that formed part
of the Parties’ dispute.

 Future Conduct of the Parties

Finally, the Tribunal considered the Philippines’ request for a declaration that, going
forward, China shall respect the rights and freedoms of the Philippines and comply with
its duties under the Convention. In this respect, the Tribunal noted that both the
Philippines and China have repeatedly accepted that the Convention and general
obligations of good faith define and regulate their conduct. The Tribunal considered that
the root of the disputes at issue in this arbitration lies not in any intention on the part of
China or the Philippines to infringe on the legal rights of the other, but rather in
fundamentally different understandings of their respective rights under the Convention in
the waters of the South China Sea. The Tribunal recalled that it is a fundamental principle
of international law that bad faith is not presumed and noted that Article 11 of Annex VII
provides that the “award . . . shall be complied with by the parties to the dispute.” The
Tribunal therefore considered that no further declaration was necessary.

VII. CONCLUSION

The Tribunal considers it beyond dispute that both Parties are obliged to comply with the
Convention, including its provisions regarding the resolution of disputes, and to respect the
rights and freedoms of other States under the Convention. Neither Party contests this, and the
Tribunal is therefore not persuaded that it is necessary or appropriate for it to make any further
declaration.

- end -