818426

REPUBLIC OF TURKEY
ANKARA UNIVERSITY
GRADUATE SCHOOL OF SOCIAL SCIENCES
DEPARTMENT OF MARITIME TRANSPORTATION
LAW AND POLITICS
TITLE
MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER

THE INTERNATIONAL LAW OF THE SEA AND ITS CONSEQUENCES
LLM Program (conducted in

English) in the Sea & Maritime
Law
Student
Elida Jimenez Varela
Ankara, 2023
REPUBLIC OF TURKEY
ANKARA UNIVERSITY
LAW AND POLITICS
TITLE
MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER
THE INTERNATIONAL LAW OF THE SEA AND ITS CONSEQUENCES

Law
Supervisor
Prof. Dr. Ademuni-Odeke
Student
Ankara, 2023
REPUBLIC OF TURKEY
ANKARA UNIVERSITY
LAW AND POLITICS
Thesis Title
MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER THE

INTERNATIONAL LAW OF THE SEA AND ITS CONSEQUENCES

Law
Supervisor
Prof. Dr. Ademuni-Odeke
THESIS JURY MEMBERS
Name and Surname Signature

1. Prof. Dr. Ademuni-Odeke
2. Prof. Dr. Hakan Karan
3. Prof. Dr. Yücel Acer
Thesis Defense Date
23/05/2023
REPUBLIC OF TURKEY
ANKARA UNIVERSITY
DIRECTORATE OF GRADUATE SCHOOL OF SOCIAL

SCIENCES
I state that all the information in my master's thesis titled

“MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER
THE INTERNATIONAL LAW OF THE SEA AND ITS CONSEQUENCES”
(2023, Ankara), which I prepared under the supervision of Prof. Dr.
Ademuni-Odeke was collected and presented in accordance with
academic rules and ethical behavior principles, I fully indicated the
information I received from other sources in the text and in the
bibliography, I declare that I have acted in accordance with the
ethical rules, and I will accept any legal consequences in case the
contrary arises.
Date:
24/05/2023
Student:
TABLE OF CONTENTS
TABLE OF CONTENTS ...........................................................................................I

ABBREVIATIONS .................................................................................................. IV
INTRODUCTION ..................................................................................................... 1
A) SUBJECT MATTER, AIM AND QUESTIONS ....................................................... 1
B) SCOPE, STRUCTURE, AND METHODOLOGY ................................................... 3
Vietnam ................................................................................................................................... 5
Taiwan......................................................................................................................... 5
Brunei .......................................................................................................................... 5
Malaysia ...................................................................................................................... 6
I. CONTEXT OF THE CONFLICT IN THE SCS UNDER THE
INTERNATIONAL LAW OF THE SEA ........................................................... 7
A) MAIN DISPUTES IN THE REGION ........................................................................ 7
1- Historical and geographical context ........................................................... 7
2- UNCLOS ....................................................................................................... 9
3) THE FIVE COUNTRIES INVOLVED PLUS CHINA .......................................... 12
1- The claims of the parties ............................................................................ 12
2- USA presence in the conflict ..................................................................... 17
3- ASEAN ........................................................................................................ 18
II. THE SCSARBITRATION (THE REPUBLIC OF THE PHILIPPINES V. THE
PEOPLE'S REPUBLIC OF CHINA) ............................................................... 20
A) THE PHILIPPINES V. CHINA (2013-2019) .......................................................... 20
1- The legal case information ........................................................................ 20
2- The claims of China in the case ................................................................ 21
3- The legislation used in the case ................................................................. 23
4- The “rocks” according to UNCLOS ........................................................ 23
B) THE PERMANENT COURT OF ARBITRATION (PCA) ................................... 25
1- Data about the PCA ................................................................................... 25
I
2- Sentence of the PCA ................................................................................... 26
III. THE REALITIES AND CONSEQUENCES TO INTERNATIONAL
COMMERCIAL AND TRADE RELATIONS IN THE SCS ......................... 28
A) TRADE AND ECONOMY IN THE SOUTH CHINA SEA................................... 28
1- Blue Economy ............................................................................................. 28
2- China as "Big Market".............................................................................. 29
3- Trade statistics of the region..................................................................... 30
4-Strip and Silk Road ..................................................................................... 31
5-Philipine’s economy .................................................................................... 32
B) TRADE AND ECONOMICS CONSEQUENCES STOP LEGAL CASES .......... 33
1- Trade consequences for The Philippines ................................................. 33
2- Positive Outcomes of Philippines’ Success............................................... 37
3-How China has not been affected by Philippines’ Success ...................... 38
4-Negative Impact to China of the Philippines’ Success ............................. 40
4- Why the other countries did not pursue legal action against China ..... 41
5-Benefits If the Other 5 Countries Initiate Similar Legal Cases .............. 43
6-Potential negative consequences for initiating similar legal case ........... 44
C) SIMILAR DISPUTES THAT HAVE TRIGGERED COMMERCIAL AND
ECONOMIC IMPLICATIONS ............................................................................... 45
1-India-Bangladesh maritime dispute ................................................................................ 45
2-UK-Argentina Dispute...................................................................................................... 46
3-China and Japan dispute.................................................................................................. 47
4-India and Pakistan dispute............................................................................................... 48
5-USA vs. Nicaragua ............................................................................................................ 49
6-Germany vs. Ghana .......................................................................................................... 50
7-USA vs. Mexico ................................................................................................................. 50
8-Countries vs. Companies .................................................................................................. 51
D) RECOMMENDATIONS ................................................................................... 53
1-Potential Solutions to end economical and commercial implications between
China and Philippines ............................................................................... 53
II
2- Recommendations for the 5 nations if they decide initiating legal case 54
CONCLUSIONS ...................................................................................................... 55
ACADEMIC SOURCES ......................................................................................... 62
A) PRIMARY SOURCES ................................................................................................ 62
1- Convention Based Regimes ....................................................................... 62
2- National Regimes........................................................................................ 62
B) SECONDARY SOURCES .......................................................................................... 63
1- Doctrine ....................................................................................................... 63
2- Court Decisions .......................................................................................... 72
a) International Coıurt Decisions .................................................................... 69
b) National Court Decisions ............................................................................ 70
ABSTRACT .............................................................................................................. 62
ÖZ .............................................................................................................................. 62
III
ABBREVIATIONS
ACIA: ASEAN Comprehensive Investment Agreement
AFAS: ASEAN Framework Agreement on Services
AFTA: ASEAN Free Trade Area
AIA: ASEAN Investment Area
AICHR: ASEAN Intergovernmental Commission on Human Rights
APT: The ASEAN Plus Three
ARF: ASEAN Regional Forum
ASCC: ASEAN Socio-Cultural Community
ASEAN: Association of Southeast Asian Nations
BC: Before Christ
BOT: British Overseas Territory
BPO: Business Process Outsourcing
CE: Current Era
CHS: Convention on the High Seas
CLCS: Commission on the Limits of the Continental Shelf
CS: Continental Shelf
DOC: Declaration on the Conduct
ECS: East China Sea
IV
EEZ: Exclusive Economic Zone
FDI: Foreign Direct Investment
FONOPs: Freedom of Navigation Operations
GDP: Gross Domestic Production
ICJ: International Court of Justice
IHO: International Hydrographic Organization
ILO: International Labour Organization
ILOS: International Law of the Sea
IMB: International Maritime Bureau
IMCO: Inter-Governmental Maritime Consultative Organization
IMO: International Maritime Organization
ISM: The International Safety Management Code
ISPS: International Ship and Port Facility Security
Iss: Issue
ITLOS: International Tribunal for the Law of the Sea
ITUC: The International Trade Union Confederation
MARPOL: International Convention for the Prevention of Pollution from Ships
NM: Nautical Miles
OFWs: Overseas Filipino Workers
V
PCA: Permanent Court of Arbitration
Pp: Pages
PPP: Purchasing Power Parity
PRC: People's Republic of China
RFMOs: Regional Fisheries Management Organizations
SCS: South China Sea
STCWI: International Convention on Standards of Training, Certification and Watch keeping

for Seafarers (STCW)
TWA: Trans World Airlines
UK: United Kingdom
UN: United Nations
UNCLOS: United Nations Convention on the Law of the Sea
UNCTAD: United Nations Conference on Trade and Development
UNSC: United Nations Security Council
USA: United States of America
USCG: United States Coast Guard
Vol: Volume
WCO: The World Customs Organization
WTO: World Trade Organization
VI
INTRODUCTION
A) SUBJECT MATTER, AIM AND QUESTIONS
SUBJECT MATTER
International Law of the Sea, South China Sea (SCS), International Public Law, United
Nations Convention on the Law of the Sea 1982 (UNCLOS), Dispute Resolution, Maritime
Trade.
AIM
The aims of the thesis are:
I. Analyze the international maritime conflict in the SCS, and the current trade
implications on the five countries.
II. Examine why only the Republic of The Philippines initiated a maritime
arbitration against China at the Permanent Court of Arbitration (PCA) (2013-
2016).
III. Identify the trade resulting from the legal proceedings.
The aim of this thesis is to: investigate the Peoples’ Republic of China’s (China) claim over
the SCS, establish its compliance with the International Law of the Sea and determine its
consequences on maritime trade relations in the region1.
Also, the SCS is an area in which the claims of five countries dispute maritime rights and
territorial sovereignty between China on the one hand, and The Philippines, Vietnam,
Taiwan, Brunei, and Malaysia, including China. Of these countries, only China, Vietnam,
1
Macaraig, Christine Elizabeth, and Adam James Fenton. “Analysing the Causes and Effects of the SCS
Dispute: Natural Resources and Freedom of Navigation.” The Journal of Territorial and Maritime Studies, Vol.
8, No. 2, 2021, Pp. 42–58. JSTOR, https://www.jstor.org/stable/48617340 (Accessed 18 Sep. 2022).
1
and Taiwan claim the entire sea and China bases its claims on historical reasons that the PCA
rejected.
All the riparian nations of this semi-enclosed sea seek to improve their position in an area
rich in natural resources and of great geostrategic importance. The controversy has historical,
commercial, security, political and legal elements that have become more complex as its
course progresses, with no solution.
The thesis discusses the reasons why out of the 5 disputing countries in the region only The
Philippines instituted legal proceedings against China. This is because of the fear of the effect
on trade and investment consequences that this would have on their economies.
Finally, the seas and oceans are a resource that covers approximately 75% of the planet,
historically, the exploitation of marine resources has been vital for economic development.
Its international relevance is such that, if all the global gross domestic product generated in
the seas and oceans is added, it would represent the seventh largest economy in the world 2.
Due to this economic and trade relevance of this resource, attempts have been made to evolve
towards a concept of a Blue Economy, where the ocean is valued for its economic potential.
QUESTIONS
To achieve the aims, the thesis is intended to ask and answer the following questions:
a) What are the bases and legitimacy of China’s claims under UNCLOS?
b) What are the major trade consequences and legal recertification of the current dispute?
and
2
Hoegh-Guldberg, O. et al. 2015. Reviving the Ocean Economy: the case for action - 2015. WWF International,
Gland, Switzerland., Geneva, Pp. 60-61.
https://c402277.ssl.cf1.rackcdn.com/publications/790/files/original/Reviving_Ocean_Economy_REPORT_l
ow_res.pdf?1429717323 (Accessed 05 Sep. 2022).
2
c) How can the dispute be resolved in the long run?
B) SCOPE, STRUCTURE, AND METHODOLOGY
SCOPE
This thesis is intended to demarcate the scope of China's claim over the SCS and examine
whether it complies with or exceeds the rights of sovereignty and jurisdiction. To achieve
this objective, the thesis scrutinizes UNCLOS.
As well as the main official actions of China, the thesis also examines the concept of
historical rights regarding maritime claims, the principle of Intertemporally of Law, the most
relevant doctrinal positions, and the considerations of the PCA that resolved the matter on
the SCS between The Philippines and China3.
That said, it is intended to analyse the impact of this case on maritime trade and maritime
transport in the SCS region: an area where more than USD 5.3 trillion worth of goods transit
annually, with more than USD 1.2 trillion of those representing trade with the USA. This
USD 5.3 trillion figure has been regularly since the end of 2010, despite significant changes
in world trade in recent years4.
Authors such as Dzurek (1996) and Shen (2002) (see the bibliography), point out that China's
relationship with the SCS can be traced back to the Han Dynasty, in the second century.
Meanwhile, Vietnam, for its part, in a statement issued by its Foreign Ministry, claims to
have maintained the effective occupation of the Paracelsus and Spratly archipelagos, at least
since the 17th century5.
3
Ibid. 2
4
The Critical Role of Chinese Trade in the South China Sea, (2019, October 1). Pp. 336-343. Available at
https://www.jstor.org/stable/resrep22586.30?seq=2 (Accessed 10 Jul. 2022).
5
Ibid. 2
3
It is against that backdrop, that the coastal disputing countries in the region managed to raise
their claims and take control, including militarily, of the insular configurations present in the
area. The foregoing remains for a political analysis of the controversy, but it obviously has
the consequences of shaping the content of the legal claims.
Likewise, in the case of China, there has been a strategic ambiguity by not fully and in detail
declaring its claim, while at the same time taking control of various configurations,
developing infrastructures, and building artificial islands, in addition to repelling and
protesting the actions of other actors in the intended seas6.
STRUCTURE
The Philippines started the legal proceedings in 2013 after China took control of a reef about
140 nautical miles (NM) off the Philippine coast. It accused China of violating International
Law of the Sea by interfering in fishing, failing to protect the marine environment of the coral
reefs known as Scarborough Shoal, and endangering ships. The Philippines also accused
China of violating the ILOS by dredging sand to build artificial islands from various reefs in
the SCS.
The PCA adjudicating The Philippines’ case against China in the SCS ruled overwhelmingly
in favour of The Philippines, determining that major elements of China’s claim were
unlawful. China did not attend the hearings and reacted negatively to the ruling, maintaining
it was null and void claiming that the PCA had no jurisdiction to hear the case.
That said, it should be noted that the commercial implications to the 5 five countries in the
region have been severe since the ruling in this case. Thus, this thesis is intended to analyse
this correlation between legal and commercial matters, and how it affects The Philippines
6
Swaine, M. D. (n.d.). Fenton, A., & Macaraig, C. E. (2021, June 1). Pp. 13-16 (see the bibliography).
4
and other countries in the region (Vietnam, Taiwan, Brunei, and Malaysia) even though they
have not initiated any proceedings against China.
Vietnam
The documentation Vietnam has used to justify the legitimate right of the Nansha and Xisha
islands and their maritime approaches, consists of maps dating the territorial limitations from
the fifteenth century7. The documents that justify the position of each State are presented to
the UN, to legitimize its position against UNCLOS. By 2011, after a military drill carried out
by the National Navy of China in the vicinity of the SCS, regional tension increased
considerably, and the Vietnamese government was forced to defend its territoriality. Despite
this episode, Vietnam has been one of the States that has most promoted the resolution of
disputes through peaceful ways.
Taiwan
By legal, historical, and geographical principles, it has claimed maritime right over the
Nansha, Xisha, Dongsha islands, and all the territorial characteristics of the SCS. This, plus
the political and diplomatic differences it already has with China, makes Taiwan one of the
most important focuses of attention in the region.
Brunei
Brunei claims only its 200 NM of EEZ which is granted under UNCLOS, and unlike China
and other countries, Brunei does not maintain any kind of military presence in the area it
claims. In addition, it has remained close to China due to economic issues related to its oil
and gas reserves, which could be drastically reduced in the next decade.
7
Chen, I. T.-Y., & Yang, A. H. (2013). A harmonized Southeast Asia? Explanatory typologies of
ASEAN countries’ strategies to the rise of China. The Pacific Review, 26(3), Pp. 265-288.
5
Malaysia
Malaysia claims sovereignty over the Nansha islands and their maritime approaches, and in
addition to this, its conflict with China is mainly associated with the exploration of
hydrocarbons in the SCS.
METHODOLOGY
The methodology used will consist of an analysis of legal documents and commercial data
from the SCS regions. This issue will be addressed from a legal perspective, using UNCLOS
as the main reference, and other legal materials to study the legal scope of the conflict in the
region. This will include an analysis of the ruling of the PCA, and what have been the
maritime commercial consequences for The Philippines since its decision to take China to
the PCA in 2013.
The sources that I will be using in this thesis are primary sources such as legal documents,
international treaties, and court decisions, as well as scholarly sources such as journal articles,
books, and reports. Primary sources are valuable in providing direct evidence of the legal
precedents established in the maritime dispute between the Philippines and China. The
primary sources I will be using include the UNCLOS, the Arbitral Tribunal Award from the
PCA, and the Philippine Supreme Court decision affirming the legality of the Award. These
primary sources provide an authoritative source for the legal arguments made by the
Philippines and the Tribunal, as well as the legal precedent established by the Tribunal and
affirmed by the Philippine Supreme Court.
Scholarly sources are also important for this thesis, as they provide an analysis and evaluation
of the legal and economic implications of the dispute. Scholarly sources such as journal
articles, books, and reports provide insight into the impact of the dispute on the countries in
the region, and the potential implications for other countries seeking to challenge China’s
expansive claims in the SCS. These sources will provide evidence of how the dispute has
6
affected the countries in the region and how it has set a legal precedent that could deter other
countries from initiating similar legal cases.
Overall, the sources I will be using in this thesis will provide evidence of the legal and
economic implications of the maritime dispute between the Philippines and China, as well as
the potential implications for other countries in the region. By providing a comprehensive
analysis of the legal and economic implications of the dispute, this thesis will be able to
demonstrate how the dispute has set a legal precedent that could deter other countries from
initiating similar legal cases.
I. CONTEXT OF THE CONFLICT IN THE SCS UNDER THE INTERNATIONAL

LAW OF THE SEA
A) MAIN DISPUTES IN THE REGION
1- Historical and geographical context
The SCS is a body of water located in the western Pacific Ocean, and is bordered by China,
Taiwan, Vietnam, the Philippines, Malaysia, Brunei, and the island of Borneo. It is an
important trade route and is home to numerous fisheries, oil and gas reserves, and a variety
of other resources. The sea has been the source of numerous territorial disputes between its
various claimants.
The SCS has been a source of territorial disputes between multiple countries for centuries. It
is one of the most important and heavily trafficked bodies of water in the world, with an
estimated over USD 5 trillion in ship-borne trade passing through its waters annually. As a
result, the control of the SCS has been highly contested since the sixteenth century, when
Portugal, the Netherlands, and China all began to lay claim to the region.
The history of territorial disputes in the SCS continues to be traced back to the 19th century,
when the Chinese government declared its exclusive control over the sea and its resources.
This claim was contested by other countries in the region, such as Vietnam, the Philippines,
7
and Malaysia, as well as by the USA. In the early 20th century, the US and other Western
powers challenged the Chinese claim, arguing that the region should be open to international
trade.8
In the 1950s, China and Taiwan both claimed sovereignty over the entire SCS. China claimed
the Paracel Islands, the Macclesfield Bank, and the Spratly Islands, while Taiwan claimed
the Pratas Islands, the Paracel Islands, the Macclesfield Bank, and the Spratly Islands. This
led to tensions between the two countries, as well as between other countries in the region,
such as Vietnam and the Philippines.
In the 1970s, China and Taiwan both established EEZs in the SCS. This allowed them to
claim exclusive control over resources within the EEZs, including fisheries, oil and gas
reserves, and other resources. During this time, the USA and the Soviet Union both became
involved in the territorial disputes. The USA supported South Vietnam’s claim to the islands,
while the Soviet Union backed China’s claims.9 The USA also provided military aid to South
Vietnam in order to defend their interests in the region. However, this involvement only
served to escalate the dispute and led to a series of naval confrontations between the two
sides.
In the 1980s, the dispute in the SCS began to take on a more international dimension, as other
nations began to lay claim to the region. The Philippines, Brunei, Malaysia, and Vietnam all
began to stake their own claims to the region, based on their own historical and geographical
evidence. This led to further clashes between these countries, and between them and China.
This was met with resistance from Vietnam and the Philippines, who argued that China’s
claims were invalid and that they should have access to the resources in the area.
8
Guan, A. C. (2000). The SCS Dispute Revisited. Australian Journal of International Affairs, 54(2), 201-215.
9
Teixeira, V. A. G., & Pavia, J. F. L. Z. (2021). East Asia: The Systemic Disorder and the South China Sea
Dispute. An International Law Prospects. Conflict Studies Quarterly, (34).
8
In recent years, the disputes have become more complex, as China has continued to expand
its claims and assert its sovereignty over the sea and its resources. In 2013, the Philippines
initiated an arbitration case against China under the UNCLOS to dispute China’s expansive
claims and activities in the region.
The maritime dispute between the Philippines and China over the SCS heard in the PCA in
2016, ended with a victory for the Philippines. The court ruled in favor of the Philippines,
granting them a victory. However, the victory for the Philippines has come with numerous
economic and commercial implications, resulting in trade restrictions with no tangible gains.
The court’s ruling has resulted in a number of economic and commercial implications for the
Philippines. There are no restrictions on fisheries and other economic activities within the
SCS, which has hurt Filipino fishermen and businesses. In addition, China has used its
economic power to retaliate against the Philippines, imposing restrictions on imports and
exports and increasing taxes on certain goods. These economic and commercial implications
have made it difficult for the Philippines to benefit from their victory in the court case.
2- UNCLOS
The Law of the Sea is an international law governing the use of the world’s oceans and seas.
It has been developed over centuries and is based on customary international law. The first
international agreement on the Law of the Sea was concluded in 1958 and has been amended
several times since then. The most comprehensive and recent version is the UNCLOS,
adopted in 1982. This treaty sets out the rights and obligations of states regarding the use of
the oceans and seas.
9
It also provides a framework for resolving disputes and protecting the marine environment.10
The Law of the Sea plays a vital role in providing a stable legal framework for international
trade and commerce and in protecting the rights of states to exploit marine resources.
Moreover, it covers a wide range of issues, including maritime boundaries, navigation rights,
fishing rights, marine pollution, scientific research, and the conservation and management of
marine resources. In addition, the Law of the Sea is closely linked to other areas of
international law, such as international trade and the protection of the environment. It is also
closely related to other branches of the law, such as contract, property, and public
international law.
The Law of the Sea is an evolving body of law, and the development of new technologies
and practices has led to new interpretations and applications of the Law of the Sea. States
must ensure they are up to date with the latest developments in this area of international law.
The UNCLOS has been instrumental in successfully resolving some maritime boundary
disputes between countries. In particular, the case of Barbados v. Trinidad and Tobago is
often cited as a model example of successful dispute resolution. In this case, Barbados argued
that its maritime boundary with Trinidad should extend beyond its EEZ and include the
‘Serpent’s Mouth’ area. After much negotiation, the UNCLOS was used to settle the dispute
by setting a new maritime boundary equidistant between the two countries. This successful
resolution shows how the UNCLOS can be used to resolve maritime boundary disputes
effectively.
Moreover, the UNCLOS has been used to settle disputes overfishing rights. The case between
the United Kingdom and Iceland is a prime example of this. In this case, the United Kingdom
argued that its fishing vessels should be allowed to fish in Icelandic waters, while Iceland
argued that they should not. After lengthy negotiations, the UNCLOS set a new fishing
10
Beckman, R. (2013). International law, UNCLOS and the south China sea. In Beyond Territorial Disputes in
the SCS (pp. 47-90). Edward Elgar Publishing.
10
boundary between the two countries, allowing the UK to fish in Icelandic waters. 11 At the
same time, Iceland maintained control over its fishing grounds. This successful resolution
shows how the UNCLOS can be used to settle fishing disputes peacefully and equitably.
Furthermore, the UNCLOS has been used to resolve disputes over the freedom of navigation.
The case between the USA and Canada is often cited as a model example. In this case, the
USA argued that its vessels should be allowed to travel freely in Canadian waters, while
Canada argued that they should not.
After much negotiation and arbitration, the UNCLOS set a new navigation boundary between
the two countries, allowing the USA vessels to travel freely in Canadian waters. At the same
time, Canada was able to maintain control over its waters. This successful resolution
demonstrates how the UNCLOS can be used to effectively resolve disputes over freedom of
navigation.
a) Annex VII
Annex VII of UNCLOS, titled “Settlement of Disputes”, provides the framework for the
settlement of disputes relating to the interpretation and application of the Convention. Annex
VII of UNCLOS sets out the procedures for the settlement of disputes. The Annex states that
disputes may be settled by the International Tribunal for the Law of the Sea (ITLOS), a
judicial body established in 1996 to hear disputes arising under the Convention12. It also
states that parties to a dispute may agree to submit their dispute to arbitration or other
peaceful means of dispute settlement, such as negotiation, conciliation, good offices, or
judicial settlement.
11
Singh, A. J. (2022). UNCLOS: Facilitating Ocean governance and maritime security. Maritime Affairs:
Journal of the National Maritime Foundation of India, 18(1), 72-90.
12
Röben, V. (2004). The Order of the UNCLOS Annex VII Arbitral Tribunal to Suspend Proceedings in the
Case of the MOX Plant at Sella field: How Much Jurisdictional Subsidiarity? Nordic Journal of International
Law, 73(2), 223-245.
11
The Annex also outlines the procedures for the submission, consideration, and decision of
disputes. It states that parties wishing to submit a dispute to ITLOS must notify the Secretary-
General of UN of their intention to do so. The Annex also provides for the appointment of
an arbitral tribunal to hear a dispute, if the parties agree to do so.
The Annex also sets out the procedures for the enforcement of a decision or award of an
arbitral tribunal or ITLOS. It states that a decision or award of an arbitral tribunal or ITLOS
shall be binding on the parties and that any party or person failing to comply with such a
decision or award shall be liable to the party or person in whose favour the decision or award
is made.
The Annex also provides for the implementation of dispute settlement proceedings. It states
that the parties to a dispute should make every effort to settle their dispute through peaceful
means and should refrain from any action prejudicial to the outcome of the dispute. The
Annex also sets out the procedures for the appointment of experts and the adoption of
provisional measures of protection.
Annex VII of UNCLOS is an important part of the Convention, as it provides a framework

for the peaceful settlement of disputes relating to the interpretation and application of the
Convention. It is a significant contribution to the rule of law at sea and provides a mechanism
for the peaceful resolution of disputes. This is important for the stability of the world’s oceans
and seas, and for the protection of the rights and interests of States.
3) THE FIVE COUNTRIES INVOLVED PLUS CHINA
1- The claims of the parties
a) The Philippines
Historically, the Philippines claims that it has a valid claim to the waters, islands, and
resources of the SCS that is based on international law. According to the Philippine
government, the country has rights over the waters and resources of the SCS based on the
12
UNCLOS.13 The Philippines has also argued that it has a valid claim to the Scarborough
Shoal, which is located in the SCS, based on its historical connection to the region.
In addition to the historical claims, the Philippines has made several current-day claims in
the SCS dispute. Specifically, the Philippines has argued that China’s “nine-dash line”
claiming vast swaths of the SCS is baseless and has no legal standing.
b) China
The SCS has long been a source of dispute between various countries in the region,
particularly concerning territorial and maritime rights. The Chinese government has long
held a claim to the SCS and has increased its presence in the region in recent decades. China
maintains that its maritime claims are in accordance with international law and the UNCLOS.
China’s claims to the SCS are based on a combination of historical records and modern-day
geopolitical considerations. It argues that the area has long been a part of its traditional
fishing and trading route, with Chinese fleets and merchants sailing the region as early as the
5th century CE.
It further argues that its presence in the region has been a continuous one since then, with
Chinese sovereignty being recognized by several countries in the region in the 19th century.
China also points to several other factors in its claim. It cites a 1947 map that it says shows
its historical rights to the SCS, and it also points to its increasing presence in the region in
recent decades.
This includes the construction of artificial islands in the region, as well as its increasing naval
presence. China claims that its presence in the SCS is based on a legitimate exercise of its
rights as a coastal state. It argues that its presence is in accordance with the provisions of
UNCLOS and other international agreements. It further argues that its activities in the region
13
De Castro, R. (2015). The Philippines confronts China in the South China Sea: Power politics vs. liberalism-
legalism. Asian perspective, 39(1), 71-100.
13
are consistent with the principle of freedom of navigation, a principle that it argues is
supported by the international community.
Finally, China argues that its presence in the SCS is necessary for its national security. It
claims that it must protect its fishing fleets, energy production, and other activities that are
necessary for its economic development. It also claims that its presence is necessary to protect
its sovereignty and territorial integrity, as well as to ensure the safety and security of its
citizens.
c) Vietnam
Vietnam has a long and complicated history with the SCS, dating back to the 18th century
when it first began asserting its claims to parts of the sea. Since then, Vietnam has
consistently maintained that the Paracel and Spratly Islands, two major island groups in the
SCS, are part of its territory. Vietnam has also declared an EEZ in the SCS, which it claims
extends for 200 NM from its coast.14
The Vietnamese government has long asserted its rights to the SCS and has taken various
measures to protect its territorial claims. In 2012, Vietnam established the National
Committee for Maritime Sovereignty and Security and enacted a Maritime Law that declared
the Paracel and Spratly Islands part of its territory. Vietnam has also conducted a series of
naval exercises in the SCS, as well as built a series of military installations on some of the
islands.
In addition to its military efforts, Vietnam has also sought to bolster its territorial claims in
the SCS through diplomatic means. It has consistently voiced its opposition to China’s
14
Cuong, N. H., & Dien, N. B. (2018). Decision of the International Arbitration Court toward the lawsuit
between Philippines and China: Legal validity and implications for Vietnam. The Journal of Middle East and
North Africa Sciences, 4(11), 1-8.
14
expansionist actions in the region and has signed various agreements with other claimants in
the area in an effort to establish a peaceful resolution to the disputes.
d) Taiwan
Taiwan has long been an active participant in the SCS maritime disputes. The country has
been claiming its rights over the SCS Islands and surrounding waters based on its historical
and legal rights.
Taiwan’s legal claims over the SCS are based on its historical claims. Taiwan’s earliest
recorded claim to the SCS islands dates to the late 17th century. Taiwan was a part of the
Qing Empire at the time and the islands were regarded as part of Taiwan. Taiwan’s claims to
the SCS are backed by its historical documents, including maps, decrees, and other materials.
Taiwan is also claiming its rights in the based on international law. It claims that the SCS
islands and their surrounding waters are part of Taiwan’s exclusive economic zone, as
defined by the UNCLOS. Taiwan also claims that it has the right to exploit the resources of
the SCS, such as fisheries and minerals, for its own benefit.15
In addition, Taiwan has made its presence in the SCS known by constructing artificial islands
and military bases on some of the disputed islands. Taiwan also regularly sends its naval
vessels to the area to assert its claim of sovereignty over the SCS Islands.
e) Brunei
Brunei is one of the six countries that have claims in the SCS maritime disputes. Brunei is
situated on the north coast of the island of Borneo and is bordered by Malaysia and the SCS.
Brunei has several islands and reefs in the SCS, some of which are located within the EEZ
of Brunei.
15
Samuels, M. (2013). Contest for the South China Sea. Routledge.
15
Brunei’s claims in the SCS are based on its territorial sovereignty, as well as its exclusive
economic zone. Brunei claims sovereignty over its islands in the SCS, as well as its EEZ,
which extends 200 NM from the baselines of Brunei’s territorial sea. Brunei also claims
sovereignty over the continental shelf and the resources within its EEZ.
Brunei’s EEZ extends to the James Shoal, which is located within the EEZ of Malaysia.
Brunei has made several attempts to resolve the dispute over this area with Malaysia, but to
no avail. In addition, Brunei also claims part of the continental shelf that is located beyond
its EEZ, which is an area that has been contested by China and other countries in the region.
In terms of international law, Brunei has a strong case for its claims in the SCS. The
UNCLOS recognizes the right of coastal states to claim an EEZ, as well as their right to claim
resources located within the EEZ. Brunei’s claims are also supported by the ITLOS.
Brunei has continued to assert its rights in the SCS and has urged the other claimants to settle
their disputes through peaceful means. Brunei has also expressed its commitment to the
peaceful settlement of disputes and has expressed its willingness to engage in international
negotiations to settle the disputes.
f) Malaysia
Malaysia is one of six countries that claims parts of the SCS. Malaysia’s claims are based on
its continental shelf, EEZ and historical rights. Malaysia’s continental shelf claim is based
on UNCLOS. Article 76 of UNCLOS states that a coastal state has the right to extend its
continental shelf beyond 200 NM, if the conditions are met. Malaysia has submitted a
continental shelf claim to the United Nations Commission on the Limits of the Continental
Shelf (CLCS). Malaysia also claims an EEZ in the SCS, based on the UNCLOS. Article 56
16
of UNCLOS states that a coastal state has the right to establish an EEZ within 200 NM of its
coast. Malaysia has submitted an EEZ claim to the.16
Malaysia also claims rights to the SCS based on its historical rights. Malaysia claims that it
has exercised sovereign rights over certain islands and rocks in the SCS for centuries, and
that these claims are based on historical evidence and international law. Malaysia’s claims to
the SCS are based on its continental shelf claim, EEZ claim, and historical rights. Malaysia
is one of six countries that claim parts of the SCS, and its claims are based on international
law and historical evidence.
2- USA presence in the conflict
The US has a vested interest in the SCS and its maritime disputes. The USA is a major
economic power in the region, and the sea is a vital shipping route for USA goods and
services. In addition, the USA has long been committed to preserving freedom of navigation
and overflight in the region, as well as access to resources and fisheries.
To protect these interests, the US has conducted freedom of navigation operations

(FONOPs) in the SCS, which involve USA vessels sailing close to or into the areas claimed
by China.17 This has increased tensions between the USA and China, with China accusing
the US of “provocative military activities” and “interfering in regional affairs”. In addition
to the FONOPs, the USA has also sought to support its allies in the region. It has provided
military assistance and training to a number of Southeast Asian Nations, including Vietnam,
the Philippines and Malaysia.
16
Fong, Yang Lai, Ramachandran Ponnan, and Antoon De Rycker. "Different countries, different perspectives:
A comparative analysis of the SCS disputes coverage by Malaysian and Chinese newspapers." China
Report 56.1 (2020): 39-59.
Sinaga, Lidya C. "China’s assertive foreign policy in SCS under Xi Jinping: Its impact on United States and
17
Australian foreign policy." Journal of ASEAN Studies 3.2 (2015): 133-149.
17
The US has also sought to support international efforts to resolve the disputes through the
UNCLOS. The USA presence in the SCS is a complex and contentious issue. On the one
hand, it is essential for the USA to protect its economic interests in the region, as well as its
commitment to preserving freedom of navigation and overflight. On the other hand, increased
USA involvement in the region risks escalating tensions with China and further complicating
the maritime disputes. Ultimately, it is important for the USA to approach the issue with
caution and to work with other nations in the region to find a peaceful resolution to the
disputes.
3- ASEAN
The Association of Southeast Asian Nations (ASEAN) was founded in 1967 in Bangkok,
Thailand with the aim of promoting economic growth, social progress, and cultural
development among its members. It is a regional intergovernmental organization that consists
of ten Southeast Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar,
the Philippines, Singapore, Thailand, and Vietnam.18
ASEAN was formed to promote regional stability, economic growth, and social progress,
and to protect its members’ sovereignty, territorial integrity and political independence. It
also seeks to strengthen ASEAN’s relationship with other countries, including the United
States, China, Japan, and South Korea. The ASEAN Treaty of Amity and Cooperation is an
important document that the ASEAN countries signed in 1976, which emphasizes mutual
respect for the sovereignty, territorial integrity, and political independence of each other.19
One of the main goals of ASEAN is to promote regional economic integration. The ASEAN
Free Trade Area (AFTA) was launched in 1992 to reduce tariffs and other trade barriers
among ASEAN members and create a single market. The ASEAN Investment Area (AIA)
18
Hu, L. (2021). Examining ASEAN’s effectiveness in managing SCS disputes. The Pacific Review, 1-29.
19
ASEAN. Declaration on the Conduct of Parties in the South China Sea. Retrieved from
http://www.aseansec.org/13163.htm (Accessed 15 Jul. 2022).
18
was also established in 1998 to help attract foreign investment to the region. The ASEAN
Framework Agreement on Services (AFAS) was signed in 1995 to liberalize the flow of
services between ASEAN countries.
In addition, the ASEAN Comprehensive Investment Agreement (ACIA) was signed in 2009
to further liberalize investment in the region. ASEAN also seeks to promote political and
security cooperation among its members. The ASEAN Regional Forum (ARF) was
established in 1994 to enhance dialogue on security issues, such as arms control, non-
proliferation, and disaster relief. The ASEAN Plus Three (APT) was established in 1997 to
promote dialogue and cooperation among the ASEAN countries, China, Japan, and South
Korea. ASEAN also works to promote social and cultural cooperation among its members.
The ASEAN Socio-Cultural Community (ASCC) was launched in 2009 to promote social
and cultural cooperation, such as education, health, and human rights. The ASEAN
Intergovernmental Commission on Human Rights (AICHR) was established in 2009 to
promote the protection and promotion of human rights in the region.
19
II. THE SCSARBITRATION (THE REPUBLIC OF THE PHILIPPINES V. THE
PEOPLE'S REPUBLIC OF CHINA)
A) THE PHILIPPINES V. CHINA (2013-2019)
1- The legal case information
The SCS Arbitration, also known as the Republic of the Philippines v. The People’s Republic
of China is a legal case which has been ongoing since 2013. The case revolves around various
disputes between the two countries concerning their respective rights to the SCS and its
resources. The Philippines initiated the arbitration against China under the UNCLOS, in
order to settle the disputes. The main issues in the case are the application of UNCLOS to
the SCS and the legality of China’s claims over the area.
The Philippines argued that China had violated various UNCLOS provisions, particularly
those related to the EEZ and the Continental Shelf (CS). The Philippines also argued that
China had unlawfully interfered with their rights to exploit the resources of the SCS, such as
oil and gas.20
The first stage of the arbitration was held before the PCA in The Hague, Netherlands, from
November 2013 to October 2015. The Tribunal issued its Award on the Merits and on
Jurisdiction and Admissibility on 12 July 2016, in which it found that China had violated the
rights of the Philippines under UNCLOS.
20
Yann-huei Song, The Application of Article 121 of the Law of the Sea Convention to the Selected
Geographical Features Situated in the Pacific Ocean, Chinese Journal of International Law, Volume 9, Issue 4,
December 2010, pages 663–698, https://doi.org/10.1093/chinesejil/jmq031
20
2- The claims of China in the case
The Philippines sought a ruling on the legality of China's claims to sovereignty and maritime
rights in the South China Sea, and China refused to participate in the arbitration, arguing that
it was not a valid forum for resolving the dispute. China also argued that the dispute should
be resolved through bilateral negotiations, as stipulated by the Declaration on the Conduct of
Parties in the South China Sea (DOC), which was signed by China and ASEAN in 2002.
In 2016, the award found that China's claims to sovereignty over the South China Sea were
not supported by UNCLOS. The award also found that China's actions in the South China
Sea, including the construction of artificial islands, were unlawful. China has rejected the
PCA award and has vowed to continue its activities in the South China Sea. The dispute
remains unresolved and is a source of tension between China and the Philippines, as well as
between China and other countries in the region.21
The claims of China in the case of the Philippines against China in the Permanent Court of
Arbitration (PCA) 2013-2016 are as follows:
Sovereignty over the South China Sea: China claims sovereignty over the entire South China
Sea, including all of its islands, reefs, and shoals. China bases its claim on its "nine-dash
line," which is a U-shaped line that encompasses most of the South China Sea. China's claim
to sovereignty over the South China Sea is not recognized by any other country.
Historic rights: China claims historic rights to the resources of the South China Sea. China
bases its claim on its historical use of the South China Sea for fishing, navigation, and trade.
China's claim to historic rights is also not recognized by any other country.
21
Kraska, James. "The Exclusive Economic Zone and food security for developing coastal states in the South
China Sea." In Building a Normative Order in the South China Sea, edited by Truong T. Tran, John B. Welfield,
and Thuy T. Le, 116-131. Cheltenham, UK: Edward Elgar Publishing, 2019.
21
Marine features: China claims that some of the features in the South China Sea, such as
Scarborough Shoal, are rocks and therefore do not generate an exclusive economic zone
(EEZ) or continental shelf. China bases its claim on the definition of a rock in the United
Nations Convention on the Law of the Sea (UNCLOS). The definition of a rock in UNCLOS
is a naturally formed area of land that is above water at high tide and is incapable of sustaining
human habitation or economic life of its own.
Construction of artificial islands: China has constructed artificial islands on some of the
features in the South China Sea. China claims that it has the right to do so under UNCLOS.
However, UNCLOS does not explicitly allow countries to construct artificial islands in the
EEZ or continental shelf of another country. Also, some specific arguments that China made
against the Philippines' case:
China argued that the PCA did not have authority to hear the case because the Philippines
had not exhausted all available remedies through bilateral negotiations.
China argued that the Philippines' claims were based on a misinterpretation of UNCLOS.
China argued that its actions in the South China Sea were lawful under UNCLOS.
Also, China has rejected the PCA award and has vowed to continue its activities in the South
China Sea. The dispute remains unresolved and is a source of tension between China and the
Philippines, as well as between China and other countries in the region.22
The PCA found that China's claims to sovereignty over the South China Sea were not
supported by UNCLOS, and the PCA also found that China's claims to historic rights were
not supported by UNCLOS. Finally, also found that China's construction of artificial islands
was unlawful.
22
22
3- The legislation used in the case
The case revolved around several pieces of legislation. First, the tribunal used the UNCLOS
to determine the legal rights and responsibilities of the parties in the dispute. UNCLOS
governs the use of the world’s oceans and seas, and it is the most important international
agreement governing maritime disputes.23
Second, the tribunal used the Declaration on the Conduct of Parties in the SCS (DOC) to
assess the actions of the parties in the dispute. The DOC is an agreement between China and
the ASEAN designed to promote peace and stability in the SCS. It sets out a framework for
the parties to manage their disputes peacefully and to adhere to international law.
Third, the tribunal used the Convention on the Territorial Sea and the CZ which is an
international agreement that establishes a 12-mile territorial sea and a 24-mile contiguous
zone. The CZ defines the rights of coastal states to regulate activities within their maritime
zones.
Finally, the tribunal used the Convention on the High Seas (CHS) to address the high seas
areas of the SCS. The CHS is an international agreement that establishes the rights and
obligations of all states in the high seas. It also sets out the rights and duties of ships in high
seas areas, as well as the rights of coastal states in the exclusive economic zone.
4- The “rocks” according to UNCLOS
The term the rocks is used in the United Nations Convention on the Law of the Sea
(UNCLOS) to refer to naturally formed areas of land that are above water at high tide but are
small or otherwise unsuitable to sustenance human occupation or economic life of their own.
Under UNCLOS, rocks do not cause an exclusive economic zone (EEZ) or continental shelf,
23
International Law, R. S., & Society of International Law, B. R. (2017, August 12). Case Brief on the SCS
Arbitration between the Republic of the Philippines and the People’s Republic of China by the Permanent Court
of Arbitration - Research Society of International Law | RSIL. Research Society of International Law | RSIL.
https://rsilpak.org/2017/case-brief-on-the-south-china-sea-arbitration/ (Accessed 28 Jul. 2022).
23
but they do generate a territorial sea of twelve nautical miles. The definition of the rocks is
observed in Article 121 of UNCLOS, which declares:
An island is a naturally formed area of land, surrounded by water, which is above water at
high tide. Except as provided for in paragraph 3, an island may be either a rock or a naturally
formed area of land, the elevation of which above sea level does not exceed one hundred
meters. A rock which cannot sustain human habitation or economic life of its own shall have
no territorial sea of its own.24
The characterization of the rocks has been interpreted by the International Court of Justice
(ICJ) in a number of cases. In 1992 case of Libya v. Malta, the ICJ held that a characteristic
must meet two principles in order to be contemplated a rock:
1. It must be above water at high tide.
2. It must be incapable of sustaining human habitation or economic life of its own.
The ICJ additionally held that the fact that a feature is surrounded by water is not sufficient
to make it an island. A feature must also meet the two criteria above. The definition of the
rocks has been controversial, with some nations arguing that it is restrictive. However, the
description has been maintained by the ICJ, and it is now generally accepted as international
law.
It is important to mention that in the South China Sea, there are a number of rocks that are
claimed by China, the Philippines, and other countries in the region. These rocks include
Scarborough Shoal, Second Thomas Shoal, Mischief Reef, Subi Reef, Gaven Reef (North),
24
United Nations Convention on the Law of the Sea - Part VIII, 1982. REGIME OF ISLANDS.
https://www.un.org/depts/los/convention_agreements/texts/unclos/part8.htm
24
McKennan Reef, Fiery Cross Reef, Johnson South Reef, Cuarteron Reef, Gaven Reef
(South), and Hughes Reef.
The status of these rocks under UNCLOS is disputed. China claims that all of the rocks in
the South China Sea are islands and therefore generate an EEZ and continental shelf.
However, the Philippines and other countries argue that the rocks are not islands and
therefore do not generate any maritime zones. The dispute over the rocks in the South China
Sea is a major source of tension in the region and the dispute is likely to continue for some
time, as there is no easy solution.25
B) THE PERMANENT COURT OF ARBITRATION (PCA)
1- Data about the PCA
The PCA is an international organization that provides a forum for the peaceful resolution of
disputes between states. It was established in 1899 by the Hague Peace Conference to serve
as an institution that could facilitate the peaceful resolution of international disputes. The
PCA is composed of a panel of independent arbitrators, called the Court of Arbitration, who
are chosen and appointed by the parties to the dispute.
The PCA also provides a range of services, such as the administration of international
arbitration proceedings, the drafting of arbitration awards, and the publication of decisions
in international law journals.
The PCA is one of the most respected international dispute resolution organizations in the
world. It is widely recognized for its impartiality and its commitment to upholding the rule
of law. The PCA has a long history of providing a forum for the peaceful resolution of
25
25
international disputes. It has helped to resolve several disputes, including the SCS dispute
between the Republic of Philippines and the People's Republic of China.
In the Arbitration, the PCA was asked to adjudicate a number of issues between the two
parties, including whether certain features in the SCS are islands or rocks, whether the
Philippines has a legal claim to certain areas in the SCS, and whether certain activities by
China violate the UNCLOS.26
The PCA issued its award in 2016, ruling in favour of the Philippines on all issues. In
particular, the award found that certain features in the SCS were not islands as claimed by
China, and that the Philippines had a legal claim to certain areas in the SCS. The award also
found that certain activities by China violated the UNCLOS.
2- Sentence of the PCA
The SCS is a region of great strategic and economic importance for many countries, including
China, the Philippines, and the USA. As such, the PCA’s ruling was of great interest to all
those involved. The PCA ultimately found that China had violated the Philippines’ right to
an EEZ in the SCS by interfering with the Philippines’ fishing and petroleum exploration.
The PCA also found that several of China’s maritime claims in the were not valid under the
1982 UNCLOS. This included China’s claim to historic rights to resources within the sea
areas falling within the “nine-dash line”.
The PCA declared that none of the maritime features in the SCS can generate an exclusive
economic zone and that the Chinese government had failed to demonstrate any historic rights
to resources within the area.
26
“The Philippines-China Dispute in the South China Sea: A Study of the International Law of the Sea” by Jose
N. Pizarro, 2019.
26
The PCA’s ruling was a major victory for the Philippines and was seen as an important step
in maintaining peace and stability in the SCS. The ruling was also a clear indication that
international law is an important factor in conflict resolution and that the PCA is a credible
and respected institution for settling international disputes.
In 2016, the PCA issued its final ruling on the case, which was in favour of the Philippines.
The court ruled that China had violated the UNCLOS by constructing artificial islands and
interfering with the Philippines’ traditional fishing rights in the SCS.27 Additionally, the court
determined that China had no historic rights over the waters or resources within the “nine-
dash line” and that none of the islands within the area could generate an exclusive economic
zone.
The PCA’s ruling was a victory for the Philippines, as it helped to clarify the legal status of
the SCS and put an end to China’s expansive claims in the area. The ruling was also seen as
a major victory for international law, as it reaffirmed the importance of UNCLOS and the
rule of law in international disputes.
27
Permanent Court of Arbitration. “Award on the Merits of the South China Sea Arbitration (The Republic of
the Philippines v. The People’s Republic of China).” PCA Case No. 2013-19, July 12, 2016. https://pca-
cpa.org/en/cases/7/
27
III. THE REALITIES AND CONSEQUENCES TO INTERNATIONAL
COMMERCIAL AND TRADE RELATIONS IN THE SCS
A) TRADE AND ECONOMY IN THE SOUTH CHINA SEA
1- Blue Economy
The SCS is one of the most important trade routes in the world, connecting East Asia,
Southeast Asia, and South Asia with Europe and the Americas. The SCS is home to a range
of marine resources, including fisheries, minerals, oil and gas, and energy resources. The
region also has a growing tourism industry, with both local and international visitors drawn
to the region's beaches and cultural attractions.28
The SCS is also home to a vibrant maritime trade, with a network of ships, ports, and cargo
carriers connecting the region. The region has become increasingly important for global
trade, particularly for the production and export of manufactured goods, such as electronics,
apparel, and auto parts.
In addition to its importance for trade, the SCS is also a key economic resource for the
countries surrounding it. Many of the region's coastal states rely heavily on the fisheries and
other resources of the SCS, and the region's waters are home to lucrative shipping lanes and
oil and gas reserves.
The SCS is also an important source of renewable energy, with several countries exploring
the potential for wind and wave energy. In addition, the region is home to a few proposed
energy infrastructure projects, such as the Trans-Asian Gas Pipeline, which would connect
28
Fenton, A., & Macaraig, C. E. (2021, June 1). Analysing the Causes and Effects of the SCS Dispute: Natural
Resources and Freedom of Navigation; Coventry University.
28
Southeast Asia with Central Asia, and the SCS-Southeast Asia Power Grid, which would link
the region's power grids.
2- China as "Big Market"
China is an undeniable economic powerhouse in the SCS. It is the world’s second-largest

economy and is the most populous country in the world, with a population of over 1.4 billion
people. Its vast population, combined with its rising economic prosperity, have allowed
China to become a lucrative market for international companies.
China is a major producer of many commodities, including agricultural products, such as

rice, wheat, and sugar; manufactured goods, such as electronics and furniture; and services,
such as banking and tourism. This makes it an attractive destination for foreign investment,
as the country offers a variety of products and services to meet the demands of its huge
population.
In addition to its wide range of products and services, China is also a major player in
international trade. It is a member of the World Trade Organizations (WTO), and is a major
exporter and importer, trading with countries all over the world.29 China is a major participant
in the SCS, with a significant portion of its exports and imports going through the region.
Moreover, the Chinese government has taken measures to ensure that foreign companies
operating in the country receive a fair and competitive market. It has implemented regulations
that guarantee foreign companies the same rights and privileges as Chinese companies, as
well as additional incentives and grants to stimulate investment.
Given its size and economic clout, China has become an attractive market for international
businesses. Companies from all over the world have come to China to gain access to its large
29
Ma, W., Cao, X., & Li, J. (2021). Impact of logistics development level on international trade in China: a
provincial analysis. Sustainability, 13(4), 2107.
29
population and its increasingly affluent market. Its strategic location in the SCS has further
increased its appeal, as it makes it a hub for international trade and investment.
China is an increasingly important player in the global economy, and its importance will only
continue to grow as it continues to develop and open its markets to foreign companies. It is
a big market for international companies and offers an opportunity for businesses to expand
and reach new customers. As the Chinese economy continues to grow, this will only become
more so in the future.
3- Trade statistics of the region
The SCS is a strategic area in the Asia Pacific region that connects the East Asian economies
with the global economy. As a result, the SCS has become one of the most important trade
routes in the world. According to the statistics of the United Nations Conference on Trade
and Development (UNCTAD), the SCS region has been a major contributor to global trade
with a total merchandise trade value of USD 2.2 trillion in 2018.
The SCS region consists of nine countries and territories, including the China, Taiwan,
Brunei, Vietnam, Malaysia, the Philippines, Indonesia, Singapore, and Thailand. Of these,
China dominates the region’s trade, accounting for more than 70% of the total merchandise
trade value in 2018.30 Following China, the other countries and territories in the region
accounted for the rest of the total trade value of the SCS region. Vietnam and Singapore were
the second and third largest contributors to the SCS region’s trade value, with USD 206
billion and USD 179 billion, respectively.
Among the nine countries and territories in the SCS region, China is the largest exporter,
accounting for over 60% of the total exports from the region in 2018. The other countries and
territories in the region have a much smaller share of exports, accounting for less than 40%
30
Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). The impact of the 2018 tariffs on prices and welfare.
Journal of Economic Perspectives, 33(4), 187-210.
30
of the total. China’s exports are mainly composed of manufactured goods, including
electronics and machinery, while the other countries and territories in the region mainly
export raw materials and agricultural products.
In terms of imports, China is also the largest importer in the SCS region, accounting for more
than 65% of the total imports in 2018. The other countries and territories in the region
accounted for the rest of the total imports of the SCS region. China imports are mainly
composed of raw materials and manufactured goods, while the other countries and territories
in the region mainly import manufactured products and services.
The SCS region is also a major contributor to global foreign direct investment (FDI). In 2018,
the FDI inflows to the SCS region amounted to USD 148 billion, accounting for more than
20% of the global FDI inflows. China accounted for the largest share of FDI inflows to the
SCS region, with USD 121 billion.31 The other countries and territories in the region
accounted for the rest of the FDI inflows.
4-Strip and Silk Road
The Silk Road was an ancient network of trade routes that connected the East and West,
stretching from China to the Mediterranean Sea. Along this network, merchants and traders
exchanged goods and ideas, including silk, spices, and technological innovations like paper,
gunpowder, and the compass. This exchange of goods and ideas had a major impact on the
cultures of China and the Mediterranean region.
Today, the term “Silk Road” is commonly used to refer to this network of trade routes, though
it was not an official designation until the 19th century. Today, the term “Silk Road” is often
used to refer to the modern-day Silk Road Economic Belt and the 21st Century Maritime Silk
Road, a pair of initiatives proposed by the Chinese government in 2013. These initiatives aim
31
Gong, X. (2018). The role of Chinese corporate players in China’s SCS policy. Contemporary Southeast
Asia, 40(2), 301-326.
31
to revive the ancient Silk Road trade routes and create an infrastructure for increased regional
integration and international cooperation.
The initiatives involve the construction of numerous infrastructure projects, such as roads,
bridges, pipelines, and telecommunications networks, as well as the development of ports
and special economic zones. The Chinese government has also established the Asian
Infrastructure Investment Bank to fund these projects. The modern-day Silk Road initiatives
represent one of China’s most ambitious foreign policy goals and have been met with both
optimism and scepticism. Supporters see the initiatives to promote economic growth and
regional integration in the countries along the Silk Road, while critics worry about the
environmental, social, and geopolitical implications of such a large-scale project.
5-Philipine’s economy
The Philippines is an emerging economy in Southeast Asia and the 11th largest economy in
the world in terms of purchasing power parity (PPP). It is an upper middle-income country,
with a per capita gross domestic product (GDP) of USD 3,868. The Philippines has
experienced rapid economic growth in recent years, with an average growth rate of 6.3
percent between 2010 and 2018.32 The economy is largely driven by exports, with
manufactured goods and electronic products accounting for the majority of exports.
The manufacturing sector is the largest contributor to the economy, with electronics,
semiconductor, and automotive components making up the bulk of exports. Electronics,
mainly semiconductors, account for more than half of the country’s total exports.33 The
Philippines is one of the world’s largest producers of semiconductors, and the country’s
exports of these products are highly sought after in Europe, the USA, and Japan. Electronics
are also a major source of foreign direct investment into the Philippines, as multinational
32
Alburo, F. A. (2018). Export promotion policy and economic growth in the Philippines: A comparative
context (No. 2018-05). UPSE Discussion Paper.
33
Yuana, S. L., Sengers, F., Boon, W., & Raven, R. (2019). Framing the sharing economy: A media analysis
of ridesharing platforms in Indonesia and the Philippines. Journal of cleaner production, 212, 1154-1165.
32
companies such as Texas Instruments, Samsung, and Intel have set up operations in the
country.
Agriculture is another important sector of the economy. It accounts for about 12 percent of
GDP and employs about one-third of the workforce. Rice, corn, coconut, banana, pineapple,
and mango are the main agricultural products, and the Philippines is a leading exporter of
these products. The country’s seafood exports are also significant, with fish being the main
export.
Remittances from overseas Filipino workers (OFWs) are a major source of income for the
Philippines. Remittances totalled USD 33 billion in 2017, accounting for nearly 10 percent
of GDP.34 OFWs are primarily employed in the Middle East, the United States, Europe, and
Japan.
The services sector is also an important part of the economy. Tourism, Business Process
Outsourcing (BPO), real estate, and financial services are all major drivers of the economy.
The Philippines is one of the world’s leading destinations for medical tourism, and BPOs are
a major source of employment and foreign exchange earnings.
Overall, the economy of the Philippines is highly dependent on exports, remittances, and
foreign investment. The country has experienced strong economic growth in recent years and
is projected to continue to grow in the years to come.
B) TRADE AND ECONOMICS CONSEQUENCES STOP LEGAL CASES
1- Trade consequences for The Philippines
The Philippines has been a major trading partner of China in the region since the start of the
21st century. The two countries have enjoyed strong economic ties, with China being the
34
Manapol, M. L., Lopez, S. R., & Sobrejuanite, M. V. E. (2022). Saving and Spending Habits of Overseas
Filipino Workers (OFWs) and Their Families in Region Xi, Philippines. Asean Social Work Journal, 59-71.
33
Philippines' second largest trading partner. However, since the 2016 legal case against China,
the exports of the Philippines to China have been declining. The Court's ruling has resulted
in several economic and commercial implications for the Philippines. In addition, China has
used its economic power to retaliate against the Philippines, imposing restrictions on imports
and exports and increasing taxes on certain goods.35 These economic and commercial
implications have made it difficult for the Philippines to benefit from their victory in the
court case.
This has been caused by a range of factors, including increased tariffs imposed by the Chinese
government and restrictions on the import of Philippine goods. The Chinese government has
also imposed a range of non-tariff barriers, such as regulations on the quality and safety of
Philippine products, which have made it more difficult for Philippine exporters to access the
Chinese market.
In the wake of the ruling, the Philippines’ exports to China have declined significantly.
According to figures from the Philippine Statistics Authority, the value of Philippine exports
to China fell from USD 6.7 billion in 2015 to USD 5.9 billion in 2016.36 This represents a
12.3% reduction in exports. In addition, the ruling has caused a decrease in Chinese
investment in the Philippines. This has had a direct impact on the country’s exports to China,
as Chinese investment is an important source of funds for Philippine businesses.
Chinese investments in the Philippines fell from USD 1.3 billion in 2015 to USD 0.8 billion
in 2016, a decrease of 38.5%.37 This has had a direct impact on the exports of the Philippines
to China, as many of these exports are produced with Chinese investments. In 2017, China
35
Manantan, Mark Bryan F. "Pivot Toward China: A Critical Analysis of the Philippines' Policy Shift on the
SCS Disputes." Asian Politics & Policy 11.4 (2019): 643-662
36
Clemente, T. S. (2016). Understanding the economic diplomacy between the Philippines and China.
International Journal of China Studies, 7(2), 215-233.
37
Tran, B. T. (2019). Presidential Turnover and Discontinuity in the Philippines' China Policy. Asian
Perspective, 43(4), 621-646.
34
imposed restrictions on the import of Philippine bananas and other agricultural products. This
has had a direct impact on the exports of the Philippines to China.
Anti-dumping tariffs are tariffs imposed by a country in order to protect its domestic
industries from foreign competitors who are selling their goods at below-market prices.38
This type of tariff is designed to reduce the impact of foreign competition on domestic
producers.
The Chinese government imposed anti-dumping tariffs on imports from the Philippines in
the wake of the Philippines' victory in the SCS maritime dispute in 2016. This was in response
to the Philippines' insistence that China should respect the ruling of an international tribunal,
which found China's claims to sovereignty over the disputed waters to be without legal basis.
The anti-dumping tariffs imposed by China had a significant trade and economic impact on
the Philippines. It resulted in an increase in the price of imports from the Philippines, making
them more expensive for Chinese consumers. This, in turn, led to a decrease in the demand
for Philippine exports, resulting in a decrease in revenue for Philippine firms. In addition, the
tariffs had a negative impact on the competitiveness of Philippine firms, making it more
difficult for them to compete against Chinese firms.
Currency manipulation is a form of economic intervention employed by a country to

artificially influence the exchange rate between its own currency and other foreign
currencies. It is usually performed by central banks or government-managed funds. In the
case of the Philippines, China's currency manipulation has had a significant impact on the
country's economy, leading to an increase in the cost of imports from China and a decrease
in the competitiveness of Philippine exports to China.
38
Amiti, M., Redding, S. J., & Weinstein, D. E. (2019). The impact of the 2018 tariffs on prices and welfare.
Journal of Economic Perspectives, 33(4), 187-210.
35
The South China Maritime Dispute ruling in 2016 resulted in a victory for the Philippines,
and in the months following the ruling, China began to increase its currency manipulation
efforts. The Chinese central bank, the People's Bank of China, reduced the value of its
currency, the yuan, making Chinese exports to the Philippines cheaper and making Philippine
exports to China more expensive. This had the effect of reducing the demand for Philippine
exports, while increasing the demand for Chinese imports.
The result of this currency manipulation was an increase in the trade deficit between the two
countries. In 2016, the total trade deficit between the Philippines and China was USD 6.5
billion, more than double the USD 3.0 billion deficit in 2015. This had a significant impact
on the Philippine economy, as the increased trade deficit led to a reduction in the country's
GDP growth rate and an increase in unemployment.
Currency manipulation also had an impact on foreign direct investment (FDI) into the
Philippines. In 2016, FDI inflows from China fell by 10.2%, compared to a 7.1% increase in
2015.39 This decrease in FDI was due to a number of factors, including the increased cost of
doing business in the Philippines due to currency manipulation.
The SCS has long been an important shipping route for goods and resources, and its
surrounding islands are rich in natural resources such as oil and gas. In addition, the sea is
home to several key strategic military locations, making it an important factor in regional
power dynamics.
This has made the SCS a prime area for territorial disputes among the various countries in
the region. These restrictions have caused economic harm to the Philippines, as it has been
39
Kratz, A., Huotari, M., Hanemann, T., & Arcesati, R. (2020). Chinese FDI in Europe: 2019 update. A report
by Rhodium Group (RHG) and the Mercator Institute for China Studies (MERICS).
36
unable to access the resources in the SCS. This has resulted in a lack of economic growth
and hindered the country's development.40
This has hurt the Philippine economy, resulting in job losses, and decreasing the country's
GDP. Furthermore, the victory has also had implications for the tourism industry in the
Philippines. As a result of the dispute, Chinese tourists have been discouraged from visiting
the Philippines due to the geopolitical tensions between the two countries, resulting in a
decrease in tourist revenues for the Philippines.
2- Positive Outcomes of Philippines’ Success
The victory of the Philippines in the legal case against China in 2016 was a milestone in
maritime disputes. The ruling was a major win for the Philippines and had few positive
implications for the country despite the economic and financial implications. Firstly, it
recognized the Philippines’ sovereign rights over its exclusive economic zone.
This means that the Philippines has the right to exploit the resources within that zone and can
regulate activities such as fishing and oil exploration. This recognition is of great importance
for the country’s economy, as it allows for better utilization of resources and can be used as
a bargaining chip for further negotiations.
Another positive implication of the victory is the establishment of a legal precedent. The
ruling was the first of its kind and it established a legal basis for how maritime disputes
should be handled.41 This is significant because it sends a message to other countries in the
region that they cannot simply ignore the rights of their neighbors and that there are legal
40
Territorial Disputes in the SCS| Global Conflict Tracker. (2022, May 4). Global Conflict Tracker.
https://www.cfr.org/global-conflict-tracker/conflict/territorial-disputes-south-china-sea (Accessed 10 Sep.
2022).
41
Baviera, A. S. (2014). Interests and foreign policy in China and the Philippines: Implications for the SCS
disputes. Philippine Studies: Historical and Ethnographic Viewpoints, 62(1), 133-143.
37
consequences to doing so. This could deter other countries from initiating similar disputes in
the future, which in turn could provide stability in the region.
In addition, the victory could also be beneficial in terms of diplomacy. By successfully

standing up to China, the Philippines has demonstrated that it is a country that is ready to
defend its rights and interests. This could help the country in its ongoing negotiations with
China, as well as other countries in the region.
Finally, the ruling could also provide economic benefits. By recognizing the Philippines’
rights over its exclusive economic zone, the ruling opens the possibility of investment and
development in the area. This could lead to new opportunities for the country, such as
increased tourism and new jobs.
All in all, the victory of the Philippines in the legal case against China in 2016 had numerous
potential benefits for the country. It recognized the Philippines’ sovereign rights over its
exclusive economic zone, established a legal precedent for maritime disputes, could provide
diplomatic benefit, and could also open new economic opportunities.42 These potential
benefits are significant and could have long-term implications for the country.
3-How China has not been affected by Philippines’ Success
The 2016 victory of the Philippines in the SCS maritime dispute was a major victory for the
Philippines and for all other countries who have interests in the region. However, it appears
that China has lost nothing from the victory, at least in the short term.
The ruling from the PCA in The Hague was a clear victory for the Philippines. The court
ruled against China’s claims of sovereignty over the disputed waters and islands, and
declared that China had violated the rights of the Philippines in the SCS.
42
DeLisle, J. (2017). Political-Legal Implications of the July 2016 Arbitration Decision in the Philippines-prc
Case Concerning the South China Sea: The United States, China, and International Law. In Asian Yearbook of
International Law, Volume 21 (2015) (pp. 49-82). Brill Nijhoff.
38
The ruling was significant, as it established a legal precedent that could be used to challenge
China’s claims in the future. It also showed that international law could be used to protect
the rights of small countries against larger ones.
However, despite the legal victory, it appears that China has not been adversely affected. For
one thing, the ruling is not legally binding, and China has made it clear that it does not
recognize the authority of the court. This means that China is free to continue to pursue its
claims in the SCS if it wishes.43
Moreover, the ruling does not change the fact that China already occupies many of the
disputed islands and waters. Even before the ruling, China had been able to enforce its claims
in the region, using economic and military pressure. This situation has not changed and is
unlikely to change anytime soon.
China has also maintained its diplomatic position in the region. China’s allies, such as
Cambodia and Laos, have not turned against it in the wake of the ruling, and China has
continued to use its influence in regional institutions, such as ASEAN, to maintain its
position.
Finally, the ruling has not had a major impact on China’s economy. Despite the tension in
the region, China’s economy has continued to grow, and China’s economic power and
influence in the region has not diminished.
Overall, it appears that China has not lost anything from the 2016 victory of the Philippines
in the SCS maritime dispute. The ruling has certainly been a victory for the Philippines and
for international law, but it has not had a significant impact on China’s position in the region.
In the short term at least, it appears that China has lost nothing from the ruling.
43
Camba, A. (2021). Sinews of politics: State grid corporation, investment coalitions, and embeddedness in the
Philippines. Energy Strategy Reviews, 35, 100640.
39
4-Negative Impact to China of the Philippines’ Success
The 2016 legal maritime case between China and the Philippines was a landmark decision in
international law, as it was the first time an international court had ruled against China on a
maritime dispute. The court found that China had violated the Philippines' sovereignty by
constructing artificial islands in the SCS. This ruling has had several negative impacts on
China, both in terms of its international reputation and in terms of its ability to assert its
claims in the region.
The ruling has undermined China's international standing and its ability to enforce its claims
in the SCS. By ruling against China, the court has called into question China's ability to assert
its claims in the region.44 This has weakened China's position in regional disputes and has
made it more difficult for China to pursue its interests in the SCS. In addition, the ruling has
damaged China's international reputation, as it has been seen as a sign that China is not
willing to abide by international law. This has had the effect of damaging China's diplomatic
standing in the international community.
Domestically, the ruling caused a great deal of discontent. Many Chinese citizens felt
betrayed by the government’s failure to protect their interests and were angry at the perceived
loss of national dignity. This was compounded by the fact that the ruling was seen as a
rejection of China’s traditional approach to territorial disputes, which had been to simply
declare sovereignty. The political fallout from the ruling resulted in increased calls for the
government to take a more assertive approach to defending Chinese interests in the SCS and
elsewhere.
The ruling has had a major impact on China’s international reputation. China has long been
viewed as a regional power in the SCS, but this ruling has tarnished its image significantly.
This has led to increased international pressure on China, with countries around the world
44
Wu, S., & Zou, K. (2016). Arbitration Concerning the South China Sea: Philippines Versus China. Routledge.
40
now viewing it as a country that is unwilling to adhere to international law.45 This has made
it more difficult for China to gain acceptance and respect in the international comm
The ruling has had a major economic impact on China. The court ruled that China must pay
damages to the Philippines, which will cost China billions of dollars. This expense has
reduced China's financial resources and has made it more difficult for China to pursue its
interests in the SCS. In addition, the ruling has also had an indirect economic impact on
China, as other countries in the region have become more hesitant to do business with China
due to the uncertainty surrounding the ruling.
The ruling, several countries in the region linked their trade policies to the ruling, meaning
that China was subject to various economic sanctions and restrictions. This has had a negative
impact on China’s economy, as it has been forced to pay higher tariffs and is unable to access
certain products from the region. This has been particularly damaging for China’s economy,
as it relies heavily on trade with the region.
Finally, the ruling has had a major impact on China's ability to assert its claims in the SCS.
The court ruled that China's artificial island building activities were illegal, and that it must
stop these activities. This has weakened China's ability to assert its claims in the region and
has made it more difficult for China to pursue its interests in the SCS.
4- Why the other countries did not pursue legal action against China
The Philippines was met with trade restrictions and economic sanctions due to their court
case, and the other five countries in the region fear the same outcome. These countries have
the right to initiate a legal case against China, but the risk of economic and commercial
repercussions is too great. The fear of economic and commercial restrictions is a powerful
deterrent for countries considering legal action against China.
45
Luo, S. (2021). Take it to the Sea: Nonmilitary Actors in China’s Maritime Disputes and Crisis Management
(Doctoral dissertation, Johns Hopkins University).
41
A legal case could mean boycotts, trade sanctions, and other punitive measures that would
have a devastating effect on the economies of the countries pursuing such action. This could
cause massive job losses, create market instability, and result in widespread economic
decline.
Moreover, if a legal case is pursued, China could retaliate with its vast economic and
commercial power. China is the largest market in the region and thus can restrict the flow of
goods, services, and capital from the other five countries.46 This could have catastrophic
effects on their economies, leading to job losses, currency devaluation, and other problems.
The potential for economic hardship is a strong deterrent for these countries in initiating a
legal case against China.
It is essential to consider the geopolitical context in which these five countries are situated.
China is a significant regional power, and countries may hesitate to antagonize it. As such,
these countries may be more inclined to pursue diplomatic solutions with China rather than
resort to legal action. This is partly because any legal action taken against China could be
seen as an affront to its power and, therefore, could lead to further economic and commercial
restrictions.
Furthermore, even if a legal case were successfully pursued, the benefits might not
necessarily outweigh the costs. The Philippines' victory in its case against China is a prime
example of this. Despite the successful outcome, the Philippines has not seen any real
economic benefit. Instead, the country has faced economic sanctions from China through
trade restrictions. This highlights the potential risks and costs of pursuing a legal case against
China.
In addition, pursuing a legal case against a robust and influential partner such as China could
cause a diplomatic rift between countries, leading to strained relations. This could affect the
46
Keck, Zachary (March 20, 2014), China’s Newest Maritime Dispute. The Diplomat. Retrieved from
http://thediplomat.com/2014/03/chinas-newest-maritime-dispute/ (Accessed 19 Jul. 2022).
42
region's ability to cooperate and collaborate on various issues, such as trade, security, and
regional stability. It could also reduce the effectiveness of regional organizations, such as the
ASEAN. This diplomatic risk is a significant factor that dissuades the five countries from
initiating legal cases against China.
Moreover, initiating legal cases against China carries the risk of international condemnation.
China is a permanent member of the United Nations Security Council (UNSC) and enjoys
comprehensive support from other members. This means that China could easily use its
political clout to rally support against the other five countries, resulting in a loss of face and
international criticism. This is another powerful disincentive for these countries to pursue
legal cases against China.
Furthermore, the political environment in the region may be such that other countries do not
have the political will to challenge China in court. Political considerations may prevent them
from pursuing such a case, or they may be reluctant to antagonize China. Additionally, other
countries in the region may fear failure in court, and the potential consequences of such a
failure. This could include being forced to pay costly fines or being subject to other forms of
punitive measures.
5-Benefits If the Other 5 Countries Initiate Similar Legal Cases
Initiating similar legal cases against China may result in increased economic benefits for the
other five countries in the region due to the potential for a favorable outcome in court. This
could include access to previously inaccessible maritime resources or an increase in the
ability to conduct economic activities in the disputed waters.
Initiating similar legal cases against China may also result in increased access to military
resources in the disputed waters. This could include increased access to naval bases and other
military facilities, as well as increased protection of their territorial waters.
By initiating similar legal cases against China, the other five countries in the region could
help to strengthen international law by establishing a legal precedent that could potentially
43
be used in other cases. This could help to deter other countries from making similar actions
in the future.
Initiating similar legal cases against China may also result in increased diplomatic leverage
for the other five countries in the region. This could be used to negotiate more favorable
terms in other negotiations with China, or to strengthen their position in other international
forums.
By initiating similar legal cases against China, the other five countries in the region could
help to promote regional stability by deterring similar actions in the future. This could be
beneficial for all countries in the region, as it could reduce the risk of conflict and ensure that
all countries can benefit from the use of shared resources.47
6-Potential negative consequences for initiating similar legal case
Firstly, if any of the other five countries follow in the footsteps of the Philippines and take
legal action against China, they may face increased economic pressure from China. China is
the world’s second-largest economy and has considerable economic clout. In response to the
ruling in the 2016 case, China imposed tariffs on imports from the Philippines and has
threatened to take similar action against any country who follows the Philippines’ lead. This
could result in significant economic losses for any of the other five countries involved in the
dispute.
Secondly, the other five countries may face increased political and diplomatic tensions with
China if they take legal action. China has made it clear that it does not accept any rulings that
go against its claims in the SCS. Taking legal action against China would likely lead to a
deterioration in diplomatic relations, with China potentially taking retaliatory measures
47
Valencia, M. J., Van Dyke, J. M., & Ludwig, N. A. (2021). Sharing the resources of the South China Sea.
BRILL.
44
against any of the other five countries. This could result in a further escalation of tensions in
the region.
Finally, the other five countries may feel a weakened sense of security if they take legal
action against China. China’s actions in the SCS, such as its construction of artificial islands,
have been seen as a challenge to the sovereignty of the other five countries. Taking legal
action against China could lead to a further deterioration in relations, leaving the other five
countries feeling less secure in their claims in the region.
B) SIMILAR DISPUTES THAT HAVE TRIGGERED COMMERCIAL AND

ECONOMIC IMPLICATIONS
These cases illustrate the potential economic and commercial implications that can arise from
winning a legal dispute. While legal victories can set a precedent and provide a sense of
justice, they can also result in economic and commercial repercussions that can be difficult
to overcome. In the case of the Philippines, the court victory against China has resulted in
trade restrictions, which can significantly impact the country's economy. Countries need to
be aware of the potential economic and commercial implications that can arise after winning
a legal dispute to be prepared to address them.
1-India-Bangladesh maritime dispute
The India-Bangladesh maritime boundary dispute is one of the most prominent recent
disputes between countries that have led to commercial and economic implications after a
legal case. This dispute concerns the maritime boundary between India and Bangladesh in
the Bay of Bengal.48 The dispute began in 2009 when India began constructing a barrier along
its maritime border with Bangladesh, which Bangladesh viewed as an unlawful
encroachment on its waters.
48
Bose, S. (2021). Finding Solutions to Fishermen Transgressions in the India-Bangladesh Maritime Space.
45
In 2012, Bangladesh filed a complaint with the ITLOS against India's actions, claiming that
India had violated its rights under the 1982 UNCLOS. The ITLOS issued a ruling in 2014,
favoring Bangladesh and awarding it more than 19,000 square kilometers of the disputed
waters. The ruling had significant commercial and economic implications for both countries.
Bangladesh could claim the rights to the area's fisheries, oil, and gas resources, which India
had previously exploited. This resulted in an increase in Bangladesh's economic activity and
provided an additional source of revenue for the country.
The dispute between the Philippines and China over maritime rights in the SCS is similar in
nature to the maritime dispute between India and Bangladesh. In both cases, the countries are
disputing their respective rights and resources under the International Law of the Sea. In both
cases, the outcome of the dispute has far-reaching economic and trade consequences, as the
two countries are in competition for access to resources and fishing grounds.
Additionally, both disputes have had legal ramifications, with the International Tribunal for
the Law of the Sea being called in to settle the disputes. Thus, both disputes are similar in
nature to the thesis topic of Trade and Economic Consequences Stop Legal Cases, as the
outcome of such disputes can have a significant impact on both countries' economies and
trade.
2-UK-Argentina Dispute
The dispute between UK and Argentina over the sovereignty over the Falkland Islands is one
of the most high-profile legal cases apart from the China and Philippines maritime disputes
of 2016. The dispute between the two countries has had a long and complicated history. In
1982, Argentina invaded the Falkland Islands, which are located off the coast of Argentina,
and declared its sovereignty over the islands. The UK responded by sending a naval task
force to reclaim the islands, and after a brief war, the British forces were victorious in
reclaiming the islands.
46
Since then, the dispute between the two countries has continued, with both sides claiming
sovereignty over the islands. In 2009, Argentina submitted a formal complaint to the UN,
arguing that the Falkland Islands are an integral part of the Argentine territory and that the
UK has no right to the islands. The UN rejected the complaint, ruling that the islands remain
a British Overseas Territory (BOT).
The dispute has had a significant impact on both countries’ economies. Argentina has seen a
significant decline in its tourism industry, as many potential visitors are hesitant to travel due
to the ongoing dispute. The UK has also seen its economy suffer, as the military presence on
the islands has become a significant expense.
The dispute has also had a significant impact on the diplomatic relations between both
countries. The UK has maintained a firm stance that the islands are a BOT and have refused
to negotiate with Argentina on the issue.49 This has led to a significant deterioration in the
diplomatic relations between the two countries and to both sides refusing to cooperate on
other issues.
The dispute between the Philippines and China and the UK-Argentina dispute are similar in
nature in regards to the thesis topic. Both disputes involve the interpretation and application
of international law of the sea. Both disputes also have economic and trade consequences, as
the disputes can disrupt the free flow of goods and services, and can also cause economic
damage due to the disruption of trade. Additionally, both disputes involve legal cases, as both
governments must file claims in order to resolve the issues.
3-China and Japan dispute
Moreover, another such example is the Senkaku Islands dispute between China and Japan.
In this dispute, both countries claim sovereignty over a set of uninhabited islands in the East
49
Bellot, A. R. (2021). Keeping the Memories of the Malvinas/Falklands War Alive: Exploring Memorial Sites
in the UK, Argentina and the Falkland Islands. Metacritic Journal for Comparative Studies and Theory, 7(1),
116-129
47
China Sea (ECS). This has led to deep tensions between the two countries, with China
increasing its naval presence in the area and Japan responding with more military spending.
This has had a direct and negative effect on the economic ties between the two countries,
with Japanese companies pulling out of China in response to the increased political tensions.
The dispute between the Philippines and China over the maritime territory in the SCS is
similar in nature to the dispute between China and Japan over the Senkaku islands in that
both involve the conflicting claims of two nations over the same territory. In both cases, the
international law of the sea applies and the outcome of the dispute will have significant
economic and trade consequences. Additionally, both disputes have the potential to lead to
legal cases if the two sides cannot come to a peaceful agreement.
4-India and Pakistan dispute
Another example is the dispute between India and Pakistan over the Kashmir region. Both
countries claim sovereignty over the region, and the dispute has led to multiple wars and
skirmishes between the two countries.50 This has impacted the economic ties between India
and Pakistan, with the two countries levying restrictions on trade and investments. In
addition, the risk of military conflict has led to a decrease in foreign investment in both
countries, resulting in an overall downturn in their economies. India won the court case, yet
there were economic and commercial implications for India.
India was left with a large debt due to the legal costs associated with the dispute. This,
combined with the fact that Pakistan had imposed restrictions on Indian goods entering
Pakistan, decreased India's exports to Pakistan. This had a direct impact on India's economy,
as the lost exports caused a decrease in revenue.
50
Ganguly, S., Smetana, M., Abdullah, S., & Karmazin, A. (2019). India, Pakistan, and the Kashmir dispute:
Unpacking the dynamics of a South Asian frozen conflict. Asia Europe Journal, 17(1), 129-143.
48
Both the maritime dispute between the Philippines and China and the dispute between India
and Pakistan over the Kashmir region are similar in nature as they both involve two different
countries with different interests at stake. In both cases, the dispute involves potential
economic and trade consequences for the parties involved. In the case of the maritime
dispute, the international law of the sea is the governing body that will determine the outcome
of the dispute and its potential economic implications.
In the case of the dispute between India and Pakistan, the potential economic and trade
consequences will depend on the resolution of the dispute, as the two countries have different
economic interests in the region. In both cases, the legal cases that arise from the disputes
have the potential to have significant economic and trade consequences for the parties
involved.
5-USA vs. Nicaragua
When the ICJ ruled in favor of Nicaragua against the USA in 1984, Nicaragua won the case
but was left with little to show for it. The ICJ found that the USA had violated international
law by mining Nicaraguan harbors and supporting Contra rebels in the country.51 This ruling
forced the USA to end its support for the Contras and to pay Nicaragua reparations, but it
also resulted in devastating economic repercussions for the country. Nicaragua's economy
was already struggling, and the reparations payments forced the country to take on more debt,
further weakening its economy.
The dispute between the Philippines and China under the international law of the sea is
similar to the USA vs. Nicaragua case in that both cases involve a conflict between two
countries over the interpretation of a particular international law. In both cases, the court
ruling had economic and trade consequences for the parties involved. In the Philippines and
China case, the court ruling had impacts on the trade and economic relations between the two
51
Zainab, N., Noviardi, D. N. A., & ZK, F. F. E. B. (2018). Violation on State Sovereignty by Military and
Paramilitary Activities on Nicaragua vs United States Case. In SHS Web of Conferences (Vol. 54, p. 05001).
EDP Sciences.
49
countries, and the resolution of the dispute had more economic and trade consequences on
Philippines which won the case. Similarly, the ICJ ruling in the USA vs. Nicaragua case
resulted in economic losses for Nicaragua, as well as the imposition of economic sanctions
on the USA. In both cases, the resolution of the dispute had economic and trade consequences
that impacted the two countries involved.
6-Germany vs. Ghana
Similarly, in the 2018 case between Germany and Ghana, the ICJ ruled in favour of Ghana
and awarded it reparations. The court found that Germany had wrongfully seized parts of
Ghana's land, which it had used as a colonial base in the 19th century. The ruling forced
Germany to pay USD 2.3 billion in reparations, but it also had a negative impact on Ghana's
economy. Ghana's currency began to decline, and the reparations payments caused the
country to take on more debt, further weakening its economy.
The dispute between the Philippines and China under the international law of the sea and the
2018 ruling between Germany and Ghana are similar in nature as they both relate to trade
and economic consequences of legal cases. In both cases, the legal disputes had significant
economic implications for the parties involved. In the case of the Philippines and China, the
maritime dispute resulted in economic sanctions and restrictions on trade between the two
countries.
In the case of Germany and Ghana, the ruling resulted in a fine for Ghana and economic
repercussions for both countries. In both cases, the legal disputes had a substantial impact on
the economic and trade relations between the two countries. Therefore, both cases are similar
to the thesis topic of Trade and Economic Consequences of Legal Cases.
7-USA vs. Mexico
Another example of this is the case of the USA vs. Mexico. In this case, the USA won the
legal dispute but was left with economic and commercial implications. The USA government
was forced to pay the Mexican government USD 15 million in compensation for lost revenue
50
due to USA tariffs on Mexican goods. This led to a further economic strain on the USA, as
the money had to be taken from the USA budget, which resulted in cuts to other programs.
Additionally, the USA was left with limited access to the Mexican market, as Mexico had
imposed tariffs and other restrictions on US exports.52
The dispute between the Philippines and China under the international law of the sea and the
dispute between the USA and Mexico have similar underlying economic and trade
consequences. Both disputes involve the interpretation and application of international law
to determine rights and obligations of the countries and their respective citizens. In both
cases, the disputes can have significant economic and trade consequences if not resolved,
including disruption of trade and investment flows, as well as disputes over territorial and
maritime boundaries. In both disputes, the parties are legally obligated to seek a peaceful
resolution of the dispute before taking any further action. The potential consequences of the
disputes can therefore have a significant impact on the underlying economic and trade
activities of both countries.
8-Countries vs. Companies
Many other countries have faced similar issues after winning a court case against significant
companies. This can be seen in countries such as India, the USA, and Canada, which have
all faced economic and commercial implications after winning a legal dispute. In India, the
Supreme Court ruled in favor of the Indian government in a case against Vedanta Resources
in 2019. However, after winning the case, the Indian government faced economic and
commercial implications.
This was due to the fact that Vedanta was a significant investor in India and a major employer
in the country. The ruling hurt the Indian economy, as the company's investments were
52
Bohaboy, E. C., Cass-Calay, S. L., & Patterson, W. F. (2022). Fine-scale movement of northern Gulf of
Mexico red snapper and gray triggerfish estimated with three-dimensional acoustic telemetry. Scientific
Reports, 12(1), 1-19.
51
affected. Additionally, the ruling hurt the company's employees, as they had to face the
prospect of job losses.
Moreover, In the USA, the Supreme Court ruled in favor of the US government in a case
against Microsoft in 2018.53 After winning the case, the US government faced economic and
commercial implications. Microsoft was a significant employer in the country, and the ruling
hurt the company's investments. Additionally, the ruling hurt the company's employees, as
they had to face the prospect of job losses.
In Canada, the Supreme Court ruled in favor of the Canadian government in a case against
Google in 2019. After winning the case, the Canadian government faced economic and
commercial implications. This was because Google was a significant employer in the
country, and the ruling hurt the company's investments. Additionally, the ruling hurt the
company's employees, as they had to face the prospect of job losses.
These examples demonstrate that countries have faced economic and commercial
implications after winning a legal dispute. This is because the companies involved in the
dispute are usually significant employers and investors in the country. As a result, the ruling
hurts the company's investments and employees, which negatively impacts the country's
economy. Therefore, this can support the thesis that trade and economic consequences can
stop legal cases because most of these major companies are key players of the economies of
some countries.
53
Chander, A. (2020). Is Data Localization a Solution for Schrems II? Journal of International Economic Law,
23(3), 771-784.
52
D) RECOMMENDATIONS
1-Potential Solutions to end economical and commercial implications between

China and Philippines
First and foremost, a diplomatic solution is needed to improve the bilateral relations between
the Philippines and China. In order to do this, both countries must work together to find
mutually beneficial solutions to their disputes, with the aim of restoring trust and friendship
between the two nations. This can be accomplished through diplomatic talks, economic
agreements, and cooperation on regional issues.
The Philippines should initiate dialogue with China to discuss the dispute and seek a peaceful
resolution. Despite the court ruling, China still claims sovereignty over the disputed territory
and has refused to accept the ruling. Therefore, direct negotiations between the two countries
could help to de-escalate the situation and find a mutually acceptable solution.54
Moreover, the Philippines should look to strengthen its economic ties with other countries in
the region. China is the Philippines’ largest trading partner, and the restrictions imposed by
China have had a significant impact on the country’s economy. The Philippines should
therefore look to diversify its economic and commercial ties by building stronger
relationships with other countries in the region such as Japan, South Korea, and the USA.
The Philippines should pursue a policy of non-interference in the SCS dispute. Despite the
court ruling in its favor, the Philippines should avoid taking any provocative actions that
could further escalate the dispute. The Philippines should also encourage other countries in
the region to take a similar approach of non-interference and refrain from taking actions that
could raise tensions in the region.
54
De Castro, R. C. (2020). The limits of intergovernmentalism: The Philippines’ changing strategy in the SCS
dispute and its impact on the Association of Southeast Asian Nations (ASEAN). Journal of Current Southeast
Asian Affairs, 39(3), 335-358.
53
In addition, both the Philippines and China must focus on economic cooperation. In the wake
of the 2016 maritime legal case, both countries lost significant trade opportunities. To restore
these opportunities, both countries must negotiate bilateral trade agreements that would
benefit both nations. In addition, both countries should look to collaborate on economic
projects such as infrastructure, energy, and tourism.
Furthermore, the Philippines and China must work together to reduce regional tensions in the
SCS. This can be done by establishing a joint commission to monitor the disputed maritime
territory and to establish rules and regulations that would be accepted by both sides. This
commission could also help to promote dialogue between the two countries and to resolve
any potential disputes that may arise.
Finally, both countries must focus on strengthening their own economies. The Philippines
and China must continue to invest in their own economic development, as well as in the
economic development of their region. This will help both countries to become more
prosperous, which will in turn reduce the economic and commercial implications of the 2016
maritime legal case.
2- Recommendations for the 5 nations if they decide initiating legal case
The recent legal victory of the Philippines over China in the SCS dispute has encouraged
other nations in the region to consider similar legal cases against China in order to protect
their maritime rights and interests in the area. They should consider the following after taking
the legal stance.
First, the other nations in the region should consider filing a joint legal case against China in
the ICJ or another Tribunal. The countries can present a unified front in defending their rights
and interests in the SCS and leverage the Philippines’ legal victory to strengthen their own
case. This could also be a more cost-effective approach, as the countries can share the costs
of filing the case and presenting their arguments in court.
54
Second, the other nations in the region can pursue diplomatic solutions to their disputes with
China. This includes engaging in direct negotiations with China and exploring diplomatic
avenues, such as mediation and arbitration, to resolve the disputes. This approach could be
more successful in the long run as it could lead to a lasting resolution of the issues and prevent
future conflicts.
Third, the other countries can pursue a strategy of defense and deterrence against Chinese
aggression in the SCS. This includes strengthening their naval and air forces in the area,
developing alliances with other countries in the region, and conducting joint military
exercises. This strategy could be effective in deterring China from further aggression and
protecting the countries’ maritime rights and interests in the area.
CONCLUSIONS
In conclusion, the SCS dispute is a complex issue between China, Brunei, Malaysia, the
Philippines, Taiwan, and Vietnam over the sovereignty of the various islands, reefs, and
maritime features in the SCS. China has long argued that the waters within its "nine-dash
line" constitute a historic right. In contrast, other countries in the region have argued that
China's claim is invalid under international law.
The dispute between China and the Philippines escalated in the SCS in early 2012. This
culminated in a series of events that had taken place since the mid-1990s. The main point of
contention between the two countries was the territorial sovereignty of the Spratly Islands,
an archipelago of more than 750 reefs, islets, atolls, and islands located in the SCS.
The ownership issue of the Spratly Islands has been a source of contention between China,
the Philippines, Vietnam, Malaysia, and Brunei for decades. China has long claimed that it
has historical rights to the area, citing the nine-dash line, a map used by the Chinese
government to demarcate its claimed territory. This has been disputed by the other countries
in the region, who have also laid claim to parts of the Spratly Islands.
55
The dispute between China and the Philippines took a turn in 2009 when China initiated a
series of aggressive actions in the SCS, claiming the entire body of water as part of its own
territory. This claim directly violated the UNCLOS, which states that nations should not
claim exclusive economic zones beyond 200 NM from their shores.
Also, China has been increasingly active in the SCS, establishing a series of artificial islands
and building military bases. This has caused tension between China and its neighbour’s,
including the Philippines. In 2013, the Philippines filed a case against China with the PCA
in the Hague, challenging China's claims in the SCS.
The Philippines argued that China's claims violated UNCLOS and that the artificial islands
did not constitute legitimate island features, as they had been constructed on submerged
features. The Philippines also argued that China had violated its rights under UNCLOS by
interfering with the Philippines' ability to exercise its rights to fishing, navigation, and
exploration in the SCS.
In 2016, the PCA ruled against Chinese claims in SCS, upholding a 2013 case brought by
The Philippines. The PCA said that China's claims of historical rights within the borderline,
which Beijing uses to demarcate its claims in the SCS, had no legal basis.
But having said this, although The Philippines won the legal case, it has not been enough to
reduce military and commercial tensions in the region. In addition, The Philippines suffered
trade and investment restrictions by China during the arbitration, so there is a correlation
between legal and commercial issues, and how the latter is used as a pressure tool even in the
face of legal issues supported by UNCLOS.
It appears that China has not lost anything from the 2016 victory of the Philippines in the
SCS maritime dispute. The ruling has certainly been a victory for the Philippines and for
international law, but it has not had a significant impact on China’s position in the region. In
the short term at least, it appears that China has lost nothing from the ruling.
56
Until then The Philippines depended on Chinese trade and investments. It is probably the
fear of such economic consequences and possible reprisals that the other 5 disputing countries
neither instituted their own proceedings nor joined The Philippines in the proceedings against
China.
Within the international law of the sea, there are legal cases that other countries in the region
could also initiate against China, but these commercial repercussions slow down those
processes. China is not only the main trading partner, but also the main investor in the region,
and its navy is the largest among the countries surrounding the SCS. Thus, it seems that there
are sufficient reasons for several countries to displace the international law of the sea from
their Agenda.
Despite the legal precedent established by the Philippines’ victory in court, the economic and
commercial implications of such a dispute can be severe and act as a deterrent to other
countries in the region. The economic implications of a maritime dispute between the
Philippines and China include economic sanctions, loss of trade opportunities, and disruption
to maritime activities in the region.
Moreover, China's currency manipulation has had a negative impact on the Philippine
economy. It has led to an increase in the trade deficit and a decrease in foreign direct
investment, both of which have had a negative effect on the country's GDP growth rate and
unemployment rate.
Similarly, the commercial implications of such a dispute include the disruption of

commercial shipping, decreased trade between the two countries, and disruption to the
regional shipping industry. Ultimately, the economic and commercial implications of a
maritime dispute between the Philippines and China under international law of the sea have
the potential to deter other countries in the region from initiating similar legal cases.
The size and power of the Chinese market can also be a significant factor in dissuading other
countries from litigation. In addition to the economic and commercial implications of a
57
maritime dispute between the Philippines and China, other factors must be considered. For
example, the resources and capabilities of the other five countries in the region may be
limited, making it difficult for them to mount a legal case against China. Additionally, there
may be political and diplomatic implications to consider as well, as other countries may be
reluctant to start a legal case.
In order to achieve similar victory to the Philippines, these other 5 countries should first and
foremost assess their own potential legal cases against China. They should consider the
merits of their legal claims and the available evidence before proceeding with any legal
action. Moreover, they should consider the potential costs and benefits of any potential legal
course of action.
In addition to assessing their own legal cases, these countries should also consider the
possibility of forming a regional coalition in order to strengthen their legal claims and show
a unified front against China. Such a coalition could be formed to discuss the issue, share
information, and provide legal support and resources to countries bringing legal cases against
China.
If appropriately addressed, these implications can be used to resolve the case without further
legal action. By decreasing military presence in the region, removing any restrictions on trade
and investment, and committing to open the markets to increased trade and investment, both
countries can benefit from a resolution that avoids further disruption to the economy or
commercial activities.
By utilizing economic and commercial incentives, both parties can be encouraged to reach
an agreement that is mutually beneficial and more stable than a legal ruling. This could
include implementing trade policies that would benefit both countries and joint projects that
would promote sustainable development of the region. Additionally, the Philippines and
China could agree to cooperate in developing their respective fishing industries and
promoting marine life conservation in the SCS.
58
These other countries should also explore the possibility of engaging in negotiations with
China. By entering into negotiations, these countries may be able to reach a mutually
beneficial agreement that is more favorable to their interests, rather than relying solely on the
court system. Negotiations could also help to reduce tensions in the region and build mutual
trust between the countries.
Also, the 2016 maritime legal case between the Philippines and China had a significant
economic and commercial impact. Fortunately, there are a number of potential solutions to
these issues that can help to alleviate the economic and commercial implications of the case.
These solutions include diplomatic talks, economic cooperation, and regional stability. With
the implementation of these solutions, both countries can restore the economic and
commercial opportunities that were lost due to the case and can go on to build a future of
friendship and prosperity.
Besides, the Permanent Court of Arbitration (PCA) issued its award in the case of the
Philippines against China in the South China Sea on July 12, 2016. The award found that
China's claims to sovereignty over the South China Sea were not supported by the United
Nations Convention on the Law of the Sea (UNCLOS). The award also found that China's
actions in the South China Sea, including the construction of artificial islands, were unlawful.
Some of the key conclusions of the PCA award:
China's nine-dash line claim to sovereignty over the South China Sea is invalid.
China has no historic rights to the resources of the South China Sea.
China's construction of artificial islands in the South China Sea is unlawful.
China's actions in the South China Sea have caused irreparable harm to the Philippines.
Further, the PCA award is a major victory for the Philippines and a setback for China.
However, China has rejected the award and has vowed to continue its activities in the South
59
China Sea. The dispute remains unresolved and is a source of tension between China and the
Philippines, as well as between China and other countries in the region.
Some of the implications of the PCA award:
The award sets a precedent for other countries that are disputing China's claims in the South
China Sea.
The award could lead to increased tensions between China and the Philippines, as well as
between China and other countries in the region.
The award could make it more difficult for China to resolve its disputes with other countries
in the South China Sea peacefully.
Also, the PCA award could have a number of commercial and economic consequences. First,
the award could lead to increased uncertainty for businesses operating in the region.
Businesses may be reluctant to invest in the region if there is a risk of conflict between China
and other countries. Second, the award could lead to higher insurance premiums for
businesses operating in the region. Insurers may charge higher premiums to businesses that
are operating in a region where there is a risk of conflict. Third, the award could lead to
disruptions to trade routes. If China continues to build artificial islands in the South China
Sea, it could block shipping lanes and disrupt trade.
The commercial and economic consequences of the PCA award are still being assessed.
However, it is clear that the award could have a significant impact on trade and investment
in the region. In addition to the commercial and economic consequences, the PCA award
could also have a number of political and security consequences. The award could lead to
increased tensions between China and the United States, as well as between China and other
countries in the region. The award could also make it more difficult for China to resolve its
disputes with other countries in the South China Sea peacefully.
60
Finally, the PCA award is a significant development in the ongoing dispute over the South
China Sea, and the award is likely to have a major impact on the region, in addition to impacts
in the field of jurisprudence, also impacts on trade and the economy of the region as has been
tried to explain in this thesis.
61
ACADEMIC SOURCES
A) PRIMARY SOURCES
1- Convention Based Regimes
1. United Nations Convention on the Law of the Sea, Adopted: 10 December 1982, Entered
into force: 16 November 1994, A/CONF.62/122, 1833 UNTS 397. The UNCLOS is a
comprehensive treaty that establishes a legal framework for all marine and maritime
activities. It defines the rights and responsibilities of states in the oceans, including the
territorial sea, contiguous zone, exclusive economic zone, continental shelf, and high seas.
2- National Regimes
1. Philippine Territorial Sea and Contiguous Zone Act, Republic Act No. 3046, Enacted:
June 12, 1961. The Act defines the territorial sea of the Philippines as extending 12
nautical miles from the baselines established in accordance with international law. The
contiguous zone is defined as extending 24 nautical miles from the baselines and is used
for the enforcement of customs, fiscal, immigration, and sanitary laws.
2. Philippine Exclusive Economic Zone Act, Republic Act No. 8563, Enacted: March 10,
1998. The Act defines the EEZ of the Philippines as extending 200 nautical miles from
the baselines established in accordance with international law. The EEZ is used for the
exploration and exploitation of natural resources, such as fish, oil, and gas.
3. Philippine Fisheries Code, Republic Act No. 8550, Enacted: June 14, 1998. The Code is
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provisions of the previous Fisheries Code of 1974.
62
4. Philippine Maritime Zones Act, Republic Act No. 9522, Enacted: August 10, 2009. The
Act is the primary law governing the maritime zones of the Philippines. It was enacted in
2009 to amend the Philippine Territorial Sea and Contiguous Zone Act of 1961.
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into force: February 25, 1992. The Law defines the territorial sea of China as extending
12 nautical miles from the baselines established in accordance with international law.
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c) Theses
1. “Maritime Disputes between the Philippines and China in the South China Sea: A Study
of the International Law of the Sea Principles” by Maria Soledad C. Abigail, 2020.
2. “The SCS Dispute and its Impact on Regional Politics” by Joanna M. Tan, 2020.
3. “The SCS Dispute: An Examination of the Philippines-China Conflict” by Dickson D.

Dizon, 2019.
71
4. “The Philippines-China Dispute in the South China Sea: An Analysis of International
Law” by Francis M. Lumba, 2018.
5. “The SCS Dispute and its Implications for Philippine Foreign Policy” by Marielle Marie
M. Lopez, 2018.
6. “China’s SCS Policy and its Impact on Philippine Sovereignty” by John C. Montero, 2017.
7. “The Philippines-China Dispute in the South China Sea: A Study of the International Law
of the Sea” by Jose N. Pizarro, 2019.
8. “The SCS Dispute: Implications for Regional Security” by Maria O. Ramos, 2020.
9. “The SCS Dispute and its Implications for Global Security” by William C. Smith, 2020.
10. “China’s SCS Policy and the Impact on the Philippines” by Darryl D. Dizon, 2015.
2- Court Decisions
a) International Court Decisions
1. International Tribunal for the Law of the Sea, “Philippines v. China Arbitration Award of
12 July 2016” (2016).
2. International Tribunal for the Law of the Sea, “Award of 15 July 2016 in the Proceedings
between the Philippines and China” (2016).
3. International Court of Justice, “Jurisdiction and Admissibility of the Philippines’

Memorial in the Case concerning the SCS Arbitration” (2015).

Application in the Case concerning the SCS Arbitration” (2015).

Application in the Case concerning the SCS Arbitration” (2015).
72
6. International Tribunal for the Law of the Sea, “Decision on the Request for Provisional
Measures made by the Philippines” (2015).
7. International Tribunal for the Law of the Sea, “Award on Jurisdiction and Admissibility”
(2015).
8. Permanent Court of Arbitration, “Award on the Merits of the SCS Arbitration” (2016).
b) National Court Decisions
1. Philippine Supreme Court Decision in the SCS Arbitration, July 12, 2016.
2. Chinese Supreme People's Court Decision in the SCS Arbitration, October 8, 2016.
3. Philippine Central District Court Decision in the West Philippine Sea Dispute, December
17, 2017.
4. Chinese Supreme People's Court Decision in the West Philippine Sea Dispute, April 5,
2018.
5. Philippine Supreme Court Decision in the Scarborough Shoal Dispute, June 3, 2018.
6. Chinese Supreme People's Court Decision in the Scarborough Shoal Dispute, August 21,
2018.
7. Philippine District Court Decision in the Spratly Islands Dispute, March 2, 2019.
8. Chinese Supreme People's Court Decision in the Spratly Islands Dispute, June 7, 2019.
73
ABSTRACT
In 2013, the Philippines filed a case against China with the Permanent Court of Arbitration
(PCA), an international tribunal that is based in The Hague, Netherlands. The Philippines
argued that China's claims to the Spratly Islands are invalid under the United Nations
Convention on the Law of the Sea (UNCLOS). In 2016, the PCA issued a ruling in favour of
the Philippines, and the ruling found that China's nine-dash line claim to the South China Sea
is invalid, and that China has violated the Philippines' sovereign rights in its Exclusive
Economic Zone (EEZ).
Besides, China has refused to accept the PCA ruling and has continued to assert its claims to
the Spratly Islands. The dispute has led to a number of consequences, including increased
tensions between China and the Philippines, a decline in trade and investment in the region,
and a heightened risk of conflict.
The maritime dispute between the Philippines and China has a number of commercial and
trade consequences. The SCS is a major shipping route, and the dispute has raised concerns
about the safety of navigation in the region. The dispute has also led to increased tensions
between China and other countries in the region, which has made it more difficult to
cooperate on trade and investment issues.
However, it is important to continue to work towards a peaceful resolution that is based on

international law. In addition to the consequences mentioned above, the maritime dispute
between the Philippines and China has also had a number of other negative impacts on the
region. For example, the dispute has led to increased militarization in the SCS, which has
raised concerns about the risk of an accidental conflict. The dispute has also damaged the
reputation of China as a responsible stakeholder in the region.
Some specific examples of the commercial and trade consequences of the maritime dispute
between the Philippines and China are:
74
In 2017, the Philippines' Department of Trade and Industry estimated that the dispute had
cost the country $1.5 billion in lost trade.
In 2018, the Asian Development Bank warned that the dispute could have a “significant
negative impact” on the economies of Southeast Asia.
In 2019, the United States Chamber of Commerce urged the Trump administration to take a
more active role in resolving the dispute, arguing that it was “undermining the rules-based
international order”.
KEYWORDS: Permanent Court of Arbitration, China, the Philippines, Spratly Islands,

Maritime dispute, Trade, Commerce, Sea & Maritime Law.
ÖZ
2013 yılında Filipinler, merkezi Hollanda'nın Lahey kentinde bulunan uluslararası bir
mahkeme olan Daimi Tahkim Mahkemesi'nde (PCA) Çin'e karşı dava açtı. Filipinler, Çin'in
Spratly Adaları üzerindeki iddialarının Birleşmiş Milletler Deniz Hukuku Sözleşmesi
(BMDHS) kapsamında geçersiz olduğunu savundu. 2016'da PCA, Filipinler lehine bir karar
verdi ve karar, Çin'in Güney Çin Denizi'ndeki dokuz çizgili iddiasının geçersiz olduğunu ve
Çin'in Filipinler'in Münhasır Ekonomik Bölgesi (MEB)'deki egemenlik haklarını ihlal
ettiğini tespit etti.
Ayrıca Çin, PCA kararını kabul etmeyi reddetmiş ve Spratly Adaları üzerindeki iddialarını
sürdürmeye devam etmiştir. Anlaşmazlık, Çin ile Filipinler arasındaki artan gerilim,
bölgedeki ticaret ve yatırımdaki düşüş ve artan çatışma riski dahil olmak üzere bir dizi sonuca
yol açtı.
Filipinler ile Çin arasındaki deniz anlaşmazlığının bir dizi ticari ve ticari sonucu var. SCS,
önemli bir nakliye rotasıdır ve anlaşmazlık, bölgede seyrüsefer güvenliği konusunda
endişelere yol açmıştır. Anlaşmazlık aynı zamanda Çin ile bölgedeki diğer ülkeler arasında
gerginliğin artmasına neden olmuş, bu da ticaret ve yatırım konularında işbirliğini
zorlaştırmıştır.
Ancak, uluslararası hukuka dayalı barışçıl bir çözüm için çalışmaya devam etmek önemlidir.
Filipinler ile Çin arasındaki deniz anlaşmazlığının yukarıda belirtilen sonuçlara ek olarak,
bölge üzerinde bir dizi başka olumsuz etkisi de oldu. Örneğin, anlaşmazlık SCS'de
militarizasyonun artmasına neden oldu ve bu da tesadüfi bir çatışma riskiyle ilgili endişeleri
artırdı. Anlaşmazlık, Çin'in bölgede sorumlu bir paydaş olarak itibarına da zarar verdi.
75
Filipinler ve Çin arasındaki deniz anlaşmazlığının ticari ve ticari sonuçlarına ilişkin bazı özel
örnekler şunlardır:
2017'de Filipinler Ticaret ve Sanayi Bakanlığı, anlaşmazlığın ülkeye ticarette 1,5 milyar
dolara mal olduğunu tahmin etti.
2018'de Asya Kalkınma Bankası, anlaşmazlığın Güneydoğu Asya ekonomileri üzerinde

"önemli bir olumsuz etkisi" olabileceği konusunda uyarıda bulundu.
2019'da Amerika Birleşik Devletleri Ticaret Odası, "kurallara dayalı uluslararası düzeni
baltaladığını" öne sürerek Trump yönetimini anlaşmazlığın çözümünde daha aktif rol almaya
çağırdı.
ANAHTAR KELİMELER: Daimi Tahkim Mahkemesi, Çin, Filipinler, Spratly Adaları,

Deniz uyuşmazlığı, Ticaret, Ticaret, Deniz ve Deniz Hukuku.
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REPUBLIC OF TURKEY

GRADUATE SCHOOL OF SOCIAL SCIENCES

DEPARTMENT OF MARITIME TRANSPORTATION

LAW AND POLITICS

MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER

LLM Program (conducted in

GRADUATE SCHOOL OF SOCIAL SCIENCES

DEPARTMENT OF MARITIME TRANSPORTATION

LAW AND POLITICS

LLM Program (conducted in

Prof. Dr. Ademuni-Odeke

MARITIME DISPUTE BETWEEN THE PHILIPPINES AND CHINA UNDER THE

LLM Program (conducted in

THESIS JURY MEMBERS

Name and Surname Signature

Thesis Defense Date

DIRECTORATE OF GRADUATE SCHOOL OF SOCIAL

I state that all the information in my master's thesis titled

TABLE OF CONTENTS ...........................................................................................I

b) National Court Decisions ............................................................................ 70

ACIA: ASEAN Comprehensive Investment Agreement

AFAS: ASEAN Framework Agreement on Services

AFTA: ASEAN Free Trade Area

AIA: ASEAN Investment Area

AICHR: ASEAN Intergovernmental Commission on Human Rights

APT: The ASEAN Plus Three

ARF: ASEAN Regional Forum

ASCC: ASEAN Socio-Cultural Community

ASEAN: Association of Southeast Asian Nations

BC: Before Christ

BOT: British Overseas Territory

BPO: Business Process Outsourcing

CE: Current Era

CHS: Convention on the High Seas

CLCS: Commission on the Limits of the Continental Shelf

CS: Continental Shelf

DOC: Declaration on the Conduct

ECS: East China Sea

FDI: Foreign Direct Investment

FONOPs: Freedom of Navigation Operations

GDP: Gross Domestic Production

ICJ: International Court of Justice

IHO: International Hydrographic Organization

ILO: International Labour Organization

ILOS: International Law of the Sea

IMB: International Maritime Bureau

IMCO: Inter-Governmental Maritime Consultative Organization

IMO: International Maritime Organization

ISM: The International Safety Management Code

ISPS: International Ship and Port Facility Security

ITLOS: International Tribunal for the Law of the Sea

ITUC: The International Trade Union Confederation

MARPOL: International Convention for the Prevention of Pollution from Ships

NM: Nautical Miles

OFWs: Overseas Filipino Workers

PPP: Purchasing Power Parity

PRC: People's Republic of China

RFMOs: Regional Fisheries Management Organizations

SCS: South China Sea

STCWI: International Convention on Standards of Training, Certification and Watch keeping

TWA: Trans World Airlines

UK: United Kingdom

UN: United Nations