12 July 2016, the Arbitral Tribunal in the South China Sea Arbitration (The

Republic of the Philippines v. The People’s Republic of China) issued a
unanimous award largely favourable to the Philippines. China has rejected the
ruling, but it may nonetheless be a stepping-stone on the way to a peaceful
resolution of the conflict.

BACKGROUND OF THE CASE

On 22 January 2013, the Philippines instituted arbitral proceedings against China in
concerning their respective “maritime entitlements” and the legality of Chinese activities in
China Sea. In response, by a diplomatic note dated 19 February 2013 addressed to the P
China expressed its rejection of the arbitration.

INTERVIEW: “HOW WAS THE PERMANENT COURT OF ARBITRATION INVOLVED?” BY PROF. KOHEN

 In China’s view, the Arbitral Tribunal did not have jurisdiction in the case because
China’s acceptance of dispute settlement under the UN Convention on the Law of the
Sea (UNCLOS) – the basis put forward by the Philippines – was limited and excluded
sea boundary delimitations and the determination of historic titles. Since then, China
has continuously refused either to accept or to participate in the arbitral proceedings
initiated by the Philippines. The tribunal, however, did not see this as an obstacle: on 29
October 2015, it delivered its first award finding that it had jurisdiction, and, on 12 July
2016, its award deciding on the merits of the dispute.

THE 12 JULY 2016 AWARD

The award addresses three main substantive issues: (a) the so-called “nine-
dash line” and China’s claim to historic rights in the South China Sea, (b) the
status of certain maritime features in the South China Sea and (c) the legality
of Chinese activities in the South China Sea. Because of jurisdictional limits,
however, the Arbitral Tribunal did not deal with matters related to territorial
sovereignty over the disputed maritime features between the parties. That
means that the tribunal did not decide who owned the maritime features
located in the South China Sea, such as the Spratly Islands, that are claimed
by both China and the Philippines or any other coastal state in the region.
Similarly, the tribunal did not delimit any maritime boundaries between the
Philippines and China in the South China Sea.

THE “NINE-DASH LINE” AND THE ALLEGED CHINESE HISTORIC

RIGHTS

The tribunal dealt with the question whether China’s claims to historic rights
within the “nine-dash line” were in conformity with UNCLOS. It first observed
that this area – in which China claimed rights, “formed in the long historical
course”, to living and non-living resources (i.e. fisheries and petroleum
resources) – partially overlaps with areas that would otherwise comprise
the exclusive economic zone (EEZ) or the continental shelf (CS) of the
Philippines. In the view of the tribunal, UNCLOS establishes a comprehensive
maritime zones regime and allocates rights in these areas to the coastal state
and other states: in the areas of the EEZ and the CS, the coastal state enjoys
exclusive sovereign rights to the exploitation of living and non-living natural
resources. Concerning the rights of other states in these areas, the tribunal
found that UNCLOS does not permit the preservation of historic rights of any
state within the EEZ or the CS of another state. Therefore, after the entry into
force of UNCLOS, the historic rights that might have existed for China within
the “nine-dash line” in areas that would otherwise include THE PRE-
EXISTING HISTORIC RIGHTS NO LONGER EXIST AS THEY ARE
NOT COMPATIBLE WITH UNCLOS. ACCORDINGLY, THE
TRIBUNAL CONCLUDED THAT CHINA’S CLAIMS WERE
CONTRARY TO UNCLOS AND EXCEEDED THE GEOGRAPHIC
LIMITS IMPOSED BY IT. the EEZ or the CS of the Philippines were
superseded by the maritime zones regime created by UNCLOS. That means
the pre-existing historic rights no longer exist as they are not compatible with
UNCLOS. Accordingly, the tribunal concluded that China’s claims were
contrary to UNCLOS and exceeded the geographic limits imposed by it.

THE STATUS OF MARITIME FEATURES

In a next step, the tribunal determined the legal status of certain maritime
features occupied by China in the South China Sea. Determining whether
these are “islands", “rocks", “low-tide elevations” (LTEs) or “submerged
banks” is important because, unlike fully entitled islands, rocks which cannot
sustain human habitation or economic life of their own do not generate an
EEZ and a CS. Consequently, rocks do not give rights to resource exploitation
beyond their territorial sea. Furthermore, LTEs or submerged banks do not
generate any maritime zone. The tribunal found most disputed maritime
features not to be capable of generating an EEZ or CS: it
classified Scarborough Shoal as a rock, and among those features in the
Spratly Islands, it found Mischief Reef, Subi Reef and Second Thomas Shoal
to be LTEs, and Johnson Reef, Cuarteron Reef and Fiery Cross Reef to be
mere rocks. However, contrary to the Philippines’ position, the tribunal
concluded that Gaven Reef (North) and McKennan Reef are rocks that are
not capable of generating an EEZ or a CS.

The tribunal assessed the status of these features taking into consideration
their natural condition, prior to human modifications. In this respect, THE
TRIBUNAL EMPHASISED THAT CHINA’S CONSTRUCTION OF
INSTALLATIONS AND SIGNIFICANT RECLAMATION WORK AS
WELL AS ITS MAINTENANCE OF MILITARY OR GOVERNMENTAL
PERSONNEL OR CIVILIANS CANNOT ENHANCE A FEATURE’S
STATUS FROM ROCK OR A LTE TO A FULLY ENTITLED ISLAND
CAPABLE OF GENERATING AN EEZ AND A CS. the Tribunal
emphasised that China’s construction of installations and significant
reclamation work as well as its maintenance of military or governmental
personnel or civilians cannot enhance a feature’s status from rock or a LTE to
a fully entitled island capable of generating an EEZ and a CS.

CHINESE ACTIVITIES IN THE SOUTH CHINA SEA

The tribunal also ruled on the legality of activities of Chinese officials and
Chinese vessels in the areas of the South China Sea located within the
Philippines’ EEZ and CS. It concluded that China breached the provisions of
UNCLOS, in particular by (a) temporarily prohibiting fishing in areas of the
South China Sea falling within the Philippines’ EEZ, (b) failing to prevent
Chinese vessels from fishing in the Philippines’ EEZ at Mischief Reef and
Second Thomas Shoal and (c) preventing Filipino fishermen from engaging in
traditional fishing at Scarborough Shoal. Regarding China’s construction of
artificial islands, installations and structures at Mischief Reef – a LTE which is
part of the Philippines’ EEZ and CS – without the authorisation of the
Philippines, the tribunal also found China to have violated UNCLOS.

In addition, with respect to the protection and preservation of the marine

environment in the South China Sea, the tribunal found that China breached
UNCLOS since it failed to prevent fishermen from Chinese flagged vessels
from harvesting (a) endangered species on a significant scale and (b) in such
a manner as to destroy the coral reef ecosystem. Furthermore, the tribunal
held that China’s land reclamation and construction of artificial islands,
installations and structures in the Spratly Islands caused severe, irreparable
harm to the coral reef ecosystem.

THE AFTERMATH OF THE TRIBUNAL’S DECISION

The Philippines welcomed the award, which vindicated most of its claims, and
stated that it remained open to negotiate with China. Conversely, China
rejected the decision as illegal, null and void and therefore without any binding
effect on itself. Other countries, including the United States, Vietnam,
Australia and Japan, backed the Philippines and called on China to respect
the tribunal’s decision. On the other hand, Cambodia supported China’s non-
acceptance of the award. ASEAN members issued a joint communiqué
reaffirming the need to avoid actions that might escalate tensions in the South
China Sea and to seek the peaceful resolution of disputes in accordance with
international law, including UNCLOS.

The tribunal’s ruling is certainly a legal victory for the Philippines over China
as the judges agreed unanimously on almost all the questions submitted by
the Philippines, including a declaration from the tribunal that China is obliged
to comply with UNCLOS and that the award is legally binding on China.THE
TRIBUNAL’S RULING IS CERTAINLY A LEGAL VICTORY FOR
THE PHILIPPINES OVER CHINA AS THE JUDGES AGREED
UNANIMOUSLY ON ALMOST ALL THE QUESTIONS SUBMITTED
BY THE PHILIPPINES, INCLUDING A DECLARATION FROM THE
TRIBUNAL THAT CHINA IS OBLIGED TO COMPLY WITH UNCLOS
AND THAT THE AWARD IS LEGALLY BINDING ON CHINA.  There
is no enforcement mechanism as such under UNCLOS in the event that
China fails to comply with the tribunal’s decision, but the Philippines could
either resort to diplomatic ways (bilateral or multilateral negotiations within the
framework of international organisations) or have recourse to further
arbitration under UNCLOS. Moreover, other states and non-state actors could
take further actions (i.e. economic sanctions) to put pressure on Beijing to
shift its behaviour. But, beyond China’s non-compliance attitude, the award
has a value for the states bordering the South China Sea and the rest of the
international community for two reasons: (a) the tribunal’s ruling clarified the
respective rights and obligations of both China and the Philippines in the
South China Sea, thereby facilitating their further relations, and (b) the
Tribunal’s findings might have an impact on policy considerations and
decision-making of other states as it clarified important legal issues in
UNCLOS.

To sum up, it is too early to tell to what extent the tribunal’s decision will
actually play a role at both regional and international levels. Nonetheless,
what we do know is that, at the moment, things are moderately quiet in the
South China Sea comparing to two years ago. Whether this situation could be
linked to the tribunal’s ruling is open for discussion. In the meanwhile, it is
hard to believe, for instance, that countries such as Japan with Okinotorishima
or the United States with Johnson’s Island will withdraw their claims over
features that they assert to be fully entitled islands and not mere rocks. In
addition, Vietnam continues its land reclamation and construction of two large
hangars on Spratly Island in response to China’s construction of military
facilities in the Spratlys. Thus, while the tribunal’s intention appeared to be
that of making a path forward to solve the problem between China and the
Philippines, the long-term effects of its award are still to be seen in the
incoming years.