South China Sea Case: A Guide to the Verdict

The PCA ruling may be binding but territorial claims will continue to aggravate tensions in the area, with Beijing likely to ask whether continued adherence to UNCLOS is in its national interest.

The Hague: The tribunal constituted by the Permanent Court of Arbitration in The Hague to adjudicate the South China Dispute has decisively ruled in favour of the Philippines, stanching China’s objections on its jurisdiction to hear the matter.

The verdict, however, is expected to change very little on the ground. China has said the verdict’s award is “null and void and has no binding force. China neither accepts nor recognises it.”

Five significant conclusions emerge from the PCA’s 500-page verdict.

1. Beijing has no legitimate claim to exercise “sovereign rights” within its nine-dash-line in the South China Sea.
2. The maritime region around Mischief Reef and Second Thomas Shoal are within the Exclusive Economic Zone of the Philippines, granting it the sole right to exploitation of natural resources.
3. China has a positive obligation not to impede Filipino fishing vessels from exercising their EEZ rights, and to prevent Chinese fishermen from exploiting the same resources.
4. China’s island building activities and conduct in the Mischief Reef — not the Second Thomas Shoal — constitute a violation of its obligations under the UN Convention on the Law of the Sea (UNCLOS) to preserve the marine ecosystem and settle maritime disputes peacefully.
5. The UN Convention on the Law of the Sea enjoys absolute primacy as the arbiter of maritime disputes.

These findings lead the way to four distinct geopolitical consequences for the South China Sea, and indeed, Asia.

1. Since the PCA has made no pronouncement on the validity of the nine-dash-line, China will harden its sovereign claim to the territory under question.
2. While Chinese law enforcement vessels must not impede the activity of Filipino fishing vessels in the EEZ, there is no bar on their continued (and even enhanced) presence in the area, because the PCA has not settled the maritime boundary.
3. With a view to invoke Article 298 (1) (b) of UNCLOS, which exempts disputes over military activities from the remit of the tribunal, China will pursue the militarisation of Mischief Reef just as the Philippines has done with Second Thomas Shoal.
4. To escape its obligations under UNCLOS, China may consider withdrawing from the convention citing its national interests in the South China Sea. As a corollary, the impact of UNCLOS decisions on a powerful maritime state like China will further discourage the United States from ratifying the law of the sea treaty.

Needless to say, all four consequences are potentially destabilising for the region.

Virtually all of the Philippines’s claims have been accepted by the arbitral tribunal in this dispute, but the verdict comes with an important rider. The tribunal has made it clear that “nothing in the award should be understood to imply a view on questions of land sovereignty”.

The decision of the tribunal was unanimous, and signed by all five arbitrators. Judge Thomas A. Mensah of Ghana, a leading practitioner of international maritime law, presided over the tribunal. His co-arbitrators included Judge Jean-Pierre Cot (France), Judge Stanislaw Pawlak (Poland), Professor Alfred H.A. Soons (the Netherlands) and Judge Rudiger Wolfrum (Germany). While Judge Wolfrum was appointed by the Philippines, the other four arbitrators were selected by the president of the International Tribunal on the Law of the Sea (ITLOS).  Interestingly, Judge Mensah was appointed as president of the arbitral tribunal after his predecessor M.C.W Pinto, a Sri Lankan jurist, chose to relinquish the post in 2013. MCW Pinto’s stepping down, it would seem, was not a matter of routine. Ahead of the ruling, Pinto suggested that the tribunal lacked the “vital element of consent” from China, which is the “basis of its jurisdiction.”

While the “historic rights” claimed by China have been found to have been extinguished by provisions of the UNCLOS, the legitimacy of the nine-dash-line is itself a matter of open debate. Beijing has been precluded from asserting the attendant rights of fishing and oil exploration in the South China Sea, but not against asserting territorial control over the islands within the nine-dash-line.

“This tribunal is not empowered to address the question of sovereignty […] over Spratly Islands and Scarborough Shoal,” it has ruled.

Instead, it has simply asserted that maritime features like the Mischief Reef and Second Thomas Shoal do not generate an EEZ or continental shelf by itself. Mischief Reef is occupied and controlled by China, a fact that is not going to change by virtue of this ruling.

Any attempt by China to impose a moratorium on fishing in Philippines’ EEZ violates its obligations under UNCLOS, the tribunal has held. In particular, the M/V Veritas Voyager incident – when Chinese surveillance patrols approached a Philippines oil exploration vessel and ordered it to leave the area – has been flagged by the PCA, suggesting that China has no mandate to stop or seize foreign vessels in the area. But the tribunal has unequivocally said that it cannot hold China in violation of UNCLOS merely on account of the “presence of Chinese law enforcement vessels” at both Mischief Reef and Second Thomas Shoal.

Is it realistic to believe that, after this verdict, Filipino fishermen and oil explorers will readily venture into an area heavily populated by Chinese patrols? The Philippines government could of course escort their vessels, but this would dramatically raise the possibility of an international incident. Similarly, the tribunal has imposed a positive obligation on China to prevent their fishermen from entering the Philippines EEZ. Is it likely that Chinese state vessels in the area will watch on while their fishermen are swatted away by Philippine patrols?

On the issue of island construction and “land reclamation” by China, the PCA tribunal has gone for the jugular. Tuesday’s verdict chastises Beijing for its utter disregard for South China Sea’s rich marine ecology and the source of livelihood of fishermen in the region. Even so, it has relied on China’s own assertion that island building in the Mischief Reef is entirely dedicated for “civilian purposes”. Should activities in the said South China Sea islands relate to military conduct, the matter would be outside the remit of the arbitral tribunal (Article 298 (1)(b) of UNCLOS) — a fact it has been careful to note in the case of Second Thomas Shoal, currently occupied by Philippines. It is now entirely foreseeable that China will now attempt to militarise the “reclaimed islands”, with a view to keep compulsory dispute settlement out of the picture.

In an immediate reaction to the ruling, the United States said:

“When joining the Law of the Sea Convention, parties agree to the Convention’s compulsory dispute settlement process to resolve disputes… As provided in the convention, the tribunal’s decision is final and legally binding on both China and the Philippines.  The United States expresses its hope and expectation that both parties will comply with their obligations.”

We encourage claimants to clarify their maritime claims in accordance with international law — as reflected in the Law of the Sea Convention — and to work together to manage and resolve their disputes.  Such steps could provide the basis for further discussions aimed at narrowing the geographic scope of their maritime disputes, setting standards for behaviour in disputed areas, and ultimately resolving their underlying disputes free from coercion or the use or threat of force.

That the PCA ruling in the South China Sea dispute is binding on China is beyond doubt. But what exactly does it bind China to? China – whose foreign minister has described the arbitration as “a political farce staged under legal pretext” – has been asked to stop civilian activities in the EEZ that belongs to the Philippines, and stripped of all exploitation rights within a sizeable portion of the ‘nine-dash-line’. In reality, territorial claims will continue to aggravate tensions in the area, with Beijing likely pondering whether continued adherence to UNCLOS is in its national interest.

In fact the damaging economic consequences of the verdict — all international contracts that Chinese companies have signed for oil exploration will now have to be rescinded — will likely fuel Beijing’s hostile policies towards its maritime neighbours. The verdict from the Permanent Court of Arbitration is well-intentioned on paper, with a view to uphold the treaty rights of the Philippines. In practice, however, it is unlikely to mitigate the continued antagonism between major maritime players in the South China Sea.

Arun Mohan Sukumar is at the Observer Research Foundation, New Delhi. He is covering the South China Sea dispute at the Permanent Court of Arbitration in The Hague at the invitation of The Wire.

His earlier dispatches:

China, and Asia, Brace for Diplomatic Fallout from South China Sea Case

Beyond Claims, South China Sea is Battleground for US, Chinese Exceptionalism