PCA: What the arbitration ruling means for the Philippines v China case

On 29 October 2015, a United Nations Convention on the Law of the Sea (UNCLOS) Tribunal issued the highly awaited Award on Jurisdiction and Admissibility in the Philippines–China arbitration case. The interim award sets up a climactic final ruling in 2016.

In the arbitration, Manila seeks rulings on three interrelated matters. First, none of the insular features in the South China Sea — be it the Scarborough Shoal in the northern sector of the Sea or the Spratly Islands in the southern sector — are capable of generating an entitlement to an exclusive economic zone (EEZ). They are ‘rocks’ at best, which generate a territorial sea at most.

Second, as there are no overlapping entitlements in these waters, Beijing’s land reclamation activities in the southern sector of the South China Sea, and law enforcement actions across both sectors, have interfered with Manila’s sovereign rights and freedoms in its EEZ.

Finally, China’s claims based on ‘historic rights’ within the ‘nine-dash line’ have no basis in UNCLOS and under international law.

Manila presented 15 specific submissions for redress. In its ruling, the Tribunal admitted (some with reservations) 14 of them. But this should not be seen as vindicating Manila’s arguments. Despite one significant victory and a few marginal rulings in its favour, Manila is likely to come up empty-handed for the most part in the final award.

The key driver of the Philippines’ legal filing in January 2013 was a jurisprudential innovation laid down by the International Court of Justice (ICJ) in November 2012. InNicaragua v Colombia, the ICJ found that a small maritime feature — and even an ‘island’ — situated on the ‘wrong side’ of the median line, and many nautical miles removed from any such similar feature, tended to produce a cut-off effect. Thisdisproportionately disadvantaged the opposite state’s coastal projection-based entitlement. It ruled that such a feature must be enclaved during the course of delimitation — that is, its entitlement restricted to a 12 nautical mile sea at most.

In 2016, the Tribunal appears poised to sustain this ‘enclaving’ argument regarding the Scarborough Shoal. The shoal is an isolated feature that resides deep within the Philippines’ coastal projection but is administered by China. Although Nicaragua v Colombia was issued in the context of an overlapping maritime delimitation, the Philippines–China Tribunal observed that a dispute over claimed entitlements should not automatically be conflated with one of delimitation. The former was adjudicable in the rarer instances where an overlap in the claims is lacking. The Scarborough Shoal is more than 200 nautical miles from any claimed feature in the South China Sea. It was therefore excluded from Beijing’s Article 298 sea boundary delimitation-related opt-out and is presumably liable to enclaving.

This action will effectively place the northern sector of the Sea adjacent to the metropolitan island of Luzon, including its exploitable hydrocarbon resources, beyond the zone of entitlement generated by the shoal and firmly within Manila’s exclusive jurisdiction. But Beijing can still argue that the overlapping entitlement from its claimed Nanshan Island in the Spratlys empowers it to exercise sovereign rights and jurisdiction to exploit a share of the vast Reed Bank hydrocarbon bounty.

Nicaragua v Colombia also foreshadows the limits to Manila’s legal entrepreneurialism. In 2012, the ICJ, recalling that international law did not prescribe any minimum size that a land feature must possess in order to be considered an ‘island’, accorded this status to a feature just 0.7 metres above sea level at high tide. In 2016, the Philippines–China Tribunal will find that every Beijing-administered feature in the Spratlys group resides within a 200 nautical mile radius of a Chinese-claimed ‘island’.

This means that the Tribunal, due to the overlap, is barred from determining the entitlements of each of these features in the southern sector of the South China Sea as they fall outside its jurisdiction. Let alone agree with Manila’s contention that no feature in the Spratlys warrants an entitlement beyond that of a ‘rock’, it will be unable to find that Beijing’s land reclamation activities and law enforcement actions have violated Manila’s exclusive rights and freedoms. This southern sector will persist as a patchwork of competing jurisdictions. As for the rush of artificial island-building by China, each instance — whether on a low-tide or high-tide elevation — is blatantly legal.

Finally, the Tribunal’s findings on China’s ‘historic rights’ claims to the waters within the nine-dash line may astonish its many detractors. As long as the historical access and enjoyment practices of traditional Chinese fishermen within the perimeter of the nine-dash line was continuous, reasonable and certain and is considered a ‘local custom or tradition’, these practices are not qualified by the Convention. They are instead governed by the rules of general and customary international law. And so long as these practice-based rights are exercised non-exclusively by traditional Chinese fishermen and are not backed by the long arm of Chinese enforcement in foreign EEZs, the South China Sea littoral states are obliged to pay due regard to these Chinese-held rights within each of their exclusive maritime zones created by the Convention.

But Beijing bears a prior obligation to lay out a cognisable ‘historic rights’ based claim to the waters within the nine-dash line. It must limit the scope of its assertion to practices that have been continuous, reasonable and certain. Ironically, Manila also claims such local custom-based traditional fishing rights in the territorial sea of the Scarborough Shoal and is likely to receive a favourable hearing.

Neither Beijing nor Manila will walk away dejected in 2016. The same cannot be said of Vietnam if the Tribunal confirms the nine-dash line and the scope of China’s overlapping entitlements-based opt-outs. Hanoi should not lodge belligerent filings as an interested third party within the Tribunal’s setting. Instead, it should sit down with Beijing and sort out its mutual differences on overlapping entitlements, obligations and jurisdiction in this contested waterway.

Source: Sourabh Gupta, Samuels International