Report: Critique of the South China Sea Arbitration Award

Part II： The Philippines unilaterally initiated the South China Sea arbitration case, and the Arbitral Tribunal exceeded its jurisdiction.

I. The disputes between China and the Philippines in the South China Sea shall be resolved preferably through negotiation as chosen by the two parties by mutual agreement

Pursuant to Article 281 of UNCLOS, if the States Parties which are parties to a dispute concerning the interpretation or application of UNCLOS have agreed to seek settlement of the dispute by a peaceful means of their own choice, the compulsory settlement procedures, such as arbitration, apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure.

In 2002, representatives of China and ASEAN countries, including the Philippines, jointly signed the Declaration on the Conduct of Parties in the South China Sea (DOC), Article 4 of which clearly stipulates that the Parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including UNCLOS. A number of bilateral documents between China and the Philippines also refer to the agreement of both parties to settle the disputes by negotiation. These provisions are consistent and constitute an agreement between China and the Philippines, whereby the two countries have assumed the obligation to settle the disputes through negotiation.

The Arbitral Tribunal, however, holds that the multilateral and bilateral documents of China and the Philippines, including the DOC, are merely political documents in nature and could not establish a binding relationship of rights and obligations for the parties. Even if the DOC and other documents are legally binding agreements, China and the Philippines have held negotiations and consultations on the disputes for many years without being able to resolve them. Even if documents such as the DOC are binding agreements creating a relationship of rights and obligations, there are no explicit provisions excluding the application of other procedures.

Whether or not China and the Philippines have reached an agreement on the settlement of disputes through negotiation is not centered on whether or not documents such as the DOC are political or legally binding in form. What is important is that in the relevant documents, China and the Philippines refer only to the settlement of disputes by negotiation, never to other means such as arbitration, and repeatedly use the words "agree", "confirm, and "commit", reflecting a clear intention to create a relationship of rights and obligations with respect to the matter of negotiation and to exclude other ways of dispute settlement, which is also corroborated by the context in which the relevant documents were reached and the subsequent practice of China and the Philippines. In practice, China and the Philippines have only conducted negotiations on the territorial sovereignty of the islands and reefs in question, but have not yet conducted negotiations on maritime delimitation, much less on the matters covered by the Philippines' arbitration claims. In other words, China's and the Philippines' efforts to settle their disputes through negotiation are far from exhausted. Therefore, the prerequisites outlined in Article 281 of UNCLOS have not been met, and compulsory settlement procedures such as arbitration shall not be initiated.

II. The essence of the subject matter of the arbitration is the territorial sovereignty over several islands, reefs and other features in the South China Sea, which constitute an integral part of the maritime delimitation over which the Arbitral Tribunal has no jurisdiction

Under UNCLOS, the jurisdiction of the Arbitral Tribunal is limited to disputes concerning the interpretation and application of UNCLOS. Issues of territorial sovereignty do not fall within the scope of matters regulated by UNCLOS. In addition, China made a declaration under UNCLOS in 2006 to exclude disputes relating to maritime delimitation from the application of compulsory settlement procedures, including arbitration. Therefore, the Arbitral Tribunal in the South China Sea arbitration case had no jurisdiction over the disputes over territorial sovereignty and maritime delimitation between China and the Philippines.

The Philippines has summarized its claims for arbitration in three categories: First, China's assertion of the "historic rights" to the waters, seabed and subsoil within the "nine-dash line" (i.e., China's dotted line in the South China Sea) beyond the limits of its entitlements under UNCLOS is inconsistent with UNCLOS. Second, China's claim to entitlements of 200 nautical miles and more, based on certain rocks, low-tide elevations and submerged features in the South China Sea, is inconsistent with UNCLOS. Third, China's assertion and exercise of rights in the South China Sea have unlawfully interfered with the sovereign rights, jurisdiction and rights and freedom of navigation that the Philippines enjoys and exercises under UNCLOS. The Philippines has asserted that its claims are unrelated to the disputes with China over territorial sovereignty and maritime delimitation.

However, the arbitration matters raised by the Philippines have already covered the main steps and major issues in the determination of sovereignty and the conduct of maritime delimitation.

Regarding the first category of claims presented by the Philippines for arbitration, the formation and development of China's historic rights in the South China Sea and the process of China's establishment of its sovereignty over Nanhai Zhudao are one and the same, and the areas in which the Philippines claims the existence of China's historic rights overlaps with the areas in which the two sides have yet to delimit their boundaries. Therefore, the issue of territorial sovereignty and maritime delimitation between China and the Philippines cannot be dealt with separately.

Regarding the second category of claims by the Philippines, the maritime rights of certain maritime features in the South China Sea cannot be considered in isolation from the issue of its sovereignty. Only countries with sovereignty over the islands and reefs in question can make maritime claims based on these islands and reefs. It is on that basis that the compatibility of the maritime claims in question with UNCLOS can be assessed. Therefore, if the sovereignty over the component features is undetermined, the prerequisite for claiming maritime rights based on the component features does not exist and does not constitute a concrete and real dispute that can be submitted to arbitration. In addition, whether low-tide elevations can be appropriated as territory is in itself a question of territorial sovereignty. UNCLOS is silent on this issue of appropriation.

Regarding the third category of the Philippines's claims, China maintains that the legality of China's actions in the waters of Nansha Qundao and Huangyan Dao rests on both its sovereignty over the relevant features and the maritime rights derived therefrom. The Philippine claim is premised on the condition that the relevant maritime areas are under the jurisdiction of the Philippines. Therefore, in order to adjudicate the Philippines' claim, it is necessary to determine the sovereignty over the component features and to complete the maritime delimitation.

The claims made by the Philippines necessarily involve the handling of issues of territorial sovereignty and maritime delimitation. The former does not fall within the interpretation and application of UNCLOS; the latter has been excluded from the arbitration proceedings by China. Therefore, the Arbitral Tribunal has no jurisdiction.