Why the South China Sea Arbitration Case Undermines the World Marine Order

ByYe Qiang, China Research Institute of South China Sea



Why the South China Sea Arbitration Case Undermines the World Marine Order

ByYe Qiang, China Research Institute of South China Sea

There are various indications that the so-called Arbitral Tribunal on the South China Sea disputes arbitration has become a tool for a few Western countries such as the United States, Japan and some others outside the region to play political games with China and challenge China’s inherent rights and legitimate claims in the South China Sea, and it is generally predicted that the Arbitral Tribunal would support some of the Philippine appeal demands. However, on July 12, 2016, the announced so-called final ruling shocked the international community. The Arbitral Tribunal, without authorization, expanded its authority to infringe on sovereignty and territorial rights of China, having not only ignored the basic premise stipulated in the UN Convention on the Law of the Sea (UN Convention) that the state party sovereignty should be properly considered and protected, but also completely departed from the purpose underpinned by the UN Convention to promote the peaceful settlement of disputes and seriously damaged the integrity and authority of the UN Convention, and undermined the world marine order.

Having ignored China's position and imposed the arbitration

On January 22, 2013, without a consultation with the Chinese government, and in the absence of China’s consent, the Philippine government, in accordance with Article 287 and Annex VII of the UN Convention, unilaterally pushed the mandatory arbitration procedure on the South China Sea dispute between the two countries.

Although the Philippines cleverly packaged its appeal demands into the dispute the UN Convention can have the interpretation and application, but its core is still the disputes on ownership of the territory and maritime delimitation. A territorial sovereignty dispute does not fall into the scope of adjustment by the UN Convention, and the maritime delimitation dispute is excluded by the Chinese government from using mandatory arbitration procedures in its Statement 2006.

At the same time, China and the Philippines have reached a consensus on settlement of the dispute through negotiations and consultations. The two countries signed a number of bilateral documents during the years 1995-2011, which all clearly define the South China Sea disputes between the two countries should be resolved through friendly negotiations and consultations. In addition, Article 4 of the Declaration on the Conduct of Parties in the South China Sea (DOC) signed between China and ASEAN also clearly stipulates that the relevant South China Sea disputes should be resolved through negotiations and consultations by the parties directly involved. On the basis of the principles of international law that an agreement must be complied with and an estoppel be prohibited, the Philippine act of unilaterally filing the arbitration case not only broke its commitment, but also violated the principles of international law.

However, the so-called temporary Arbitral Tribunal, which is established at the Philippine unilaterally request was still pushing the procedure hard. In July 2015, the Arbitral Tribunal opened the hearing on the case’s jurisdiction and admissibility, and made a ruling on the issue on October 29th of the same year, having identified the Philippine 15 claim demands were explanatory and applicable to the UN Convention, and not involved in territorial sovereignty and maritime delimitation, negated the exclusive effect of jurisdiction of the Arbitral Tribunal by the Chinese government Statement 2006, pointed out that the DOC has no legally binding, not recognized settlement of disputes through negotiations and consultations, and emphasized that the Philippines's conduct did not constitute a abuse of power and had performed its duty to exchange views already. This means that the Chinese hope that the Arbitral Tribunal makes an impartial ruling, and terminates this arbitration case at the trial stage regarding the jurisdiction was shattered.

The Arbitral Tribunal was still forcing the arbitration procedures, which is a malicious use of the loopholes and ambiguity of some relevant provisions in the UN Convention, and a show of imposing its authority above the law.

The UN Convention does not necessitate a conclusion of a special agreement as the necessary condition for launching arbitration proceedings. This means that any State party to the UN Convention may at any time be pushed into the arbitral proceedings by another state party, regardless of the willingness of the state concerned. The arbitral mechanism designed by Annex VII of the UN Convention provides convenience for the rapid and efficient handling of maritime disputes, but can also become a tool for some individual countries to achieve political ends by abusing the arbitral procedures.

Meanwhile, formation of the Arbitral Tribunal is not affected by only one party's participation. In the case of both parties to a dispute are sovereign states, an Arbitral Tribunal shall be composed of five arbitrators. In the circumstance of both parties involved in the arbitration, each party shall appoint its arbitrator, and the agreement shall be reached to appoint another 3 arbitrators. However, if one party does not get involved, it is unable to reach an agreement on the appointment of arbitrators, then according to the provisions of the UN Convention, the other party may request chief of the International Tribunal of the Law of the Sea to appoint arbitrators. This means that, as long as one related-party insists a request, the other party refuses to participate in the arbitration and to appoint an arbitrator, an Arbitral Tribunal can still be set up. The UN Convention also stipulates whether an Arbitral Tribunal shall have jurisdiction over a case is its own decision. Even if one party does not show in court, as long as the other party requests, an Arbitral Tribunal may continue to hear the case and make a ruling.

One thing that should never be forgotten, however, is that sovereign states are the founders, explainers, users and revisers of the international law. The dispute settlement body, which can be understood as a judiciary organ, must perform duty under the framework of international law in accordance with laws concerned. In accordance with law means a comprehensive and objective interpretation and application of the principles and rules of international law, safeguarding integrity of the purpose of legislation and the system of international law, and maintaining the stability and impartiality of the international order.

The UN Convention is concluded at the third United Nations Conference on the Law of the Sea after 9-year negotiations by delegates of more than 150 countries and regions. At the fourth stage meeting of 1975, the delegates, targeted at maritime disputes unable to be settled after non-mandatory procedures such as negotiations and mediations, unfolded discussions on whether to apply compulsory dispute settlement procedures and the application scope of this procedure. The vast majority of countries adopted a cautious attitude, and believed that the mandatory procedures should be restricted by a number of conditions and the respect of the will of a state party should be put in the first place. This stance is taken up by the adopted UN Convention text, such as Articles 280 and 281prioritize the respect of parties to choose a method of dispute settlement; Article 298 gives parties the rights to exclude from using compulsory settlement mechanism on some dispute subject matters. Therefore, in the use of compulsory arbitration mechanism, an arbitral tribunal actually should have a higher standard of jurisdiction and ruling.

The reckless expansion of the jurisdiction runs counter to the purpose for concluding the UN Convention

Both China and the Philippines are the parties to the UN Convention, and are bound by the Part XV of the UN Convention, i.e. the settlement of a dispute. And this section is subdivided into three paragraphs, and the logical relationship between them is elaborated clearly in the Article 286, i.e. submitting for the mandatory dispute settlement procedures in the second paragraph must be subject to the general provisions of the first paragraph and the limitations and exceptions of the second paragraph applicable for the third paragraph. In other words, if the dispute settlement methods the parties concerned voluntarily choose fail in the first paragraph, but neither within the third paragraph exclusion and limits, applicability is possible under the second paragraph. Therefore, regarding the legal basis– Article 287-- for the Philippines to file the arbitration case, this clause of the UN Convention clearly belongs to the Second section of Part XV--- a procedure selection. According to the logical structure of the UN Convention text, this clause could not override the First section and Third section of Part XV.

However, the Arbitral Tribunal ignored the logical structure of the above rules, which on the one hand led to the smallest obstacles for formation of the Arbitral Tribunal, and on the other hand, to a serious violation of the legitimate rights and interests of China in the case.

is only a supplement to mandatory dispute settlement mechanism, which together with the dispute settlement procedures the parties concerned voluntarily choose constitute a double-tiered structure of dispute settlement mechanism in the UN Convention. And, compared with the voluntary choosing process, mandatory procedure is still secondary. If Article 287 existence will result in a compulsory dispute settlement procedures any State Party can straightforwardly file a case for it on any dispute, and whether the exceptions and limitations by the First section and the Second section respectively are legitimate and valid is reviewed by the court or tribunal under Article 287, which would, then, completely override the double-tiered structure, thus placing the mandatory procedure above the voluntary choosing process and the statement on selective exclusion. Any arbitrator who has a clear head will not come up with such a ridiculous conclusion contrary to the purpose of the instrument through explaining the law text.

China does not accept the arbitration, for which its legal basis includes two aspects: One is the two sides have already agreed to resolve the South China Sea dispute through negotiations. Two is the Chinese Government in 2006 issued the Statement pointing out that it does not accept mandatory dispute settlement procedure including arbitration for those disputes on the relevant maritime delimitation, historic waters or historic ownership Title, military activities and functional performance in the UN Security Council. The former is based on Article 280 and Article 281 of the UN Convention's mandate, which is under the First section. The latter is under the authorization of Article 298, which is under the authority of the Third section. Therefore, before applying the procedures specified in the Second section of Article 287, priority consideration must be given to exclude the application of procedures in the Second section restricted by the First section and Third section. This means that parties to a dispute are not allowed to initiate an arbitration at will, and chief of the International Tribunal of the Law of the Sea is not authorized to appoint arbitrators and has an arbitral tribunal formed without restrictions.

but include all dispute settlement procedures, i.e. the First section and the Third section of Part XV of the UN Convention, and a National Statement made according to Article 298 of the UN Convention, as well as customary regulations and international practice to solve peacefully international disputes. China does not accept the arbitration, for which its legal basis includes two aspects: One is the two sides have already agreed to resolve the South China Sea dispute through negotiations. Two is the Chinese Government in 2006 issued the Statement pointing out that it does not accept mandatory dispute settlement procedure including arbitration for those disputes on the relevant maritime delimitation, historic waters or historic ownership Title, military activities and functional performance in the UN Security Council. The former is based on Article 280 and Article 281 of the UN Convention's mandate, which is under the First section. The latter is under the authorization of Article 298, which is under the authority of the Third section. Therefore, before applying the procedures specified in the Second section of Article 287, priority consideration must be given to exclude the application of procedures in the Second section restricted by the First section and Third section. This means that parties to a dispute are not allowed to initiate an arbitration willfully, and chief of the International Tribunal of the Law of the Sea is not authorized to appoint arbitrators and has an Arbitral Tribunal formed without restrictions.

Even if Article 287 of the UN Convention is applicable, the Arbitral Tribunal shall also clarify the legal meaning of the procedure of choice, and the choice to issue a statement by the related parties. International practices show that Article 287 in existence in no way means that it is legitimate for one party to a dispute to directly file the arbitration case. Under this system, the authorized referee duties scope of state is determined by the relations with other countries with which a particular statement is made, and the legal nature of the statement for choice is “potential bilateral agreement” between the parties to a dispute, and the applicable rules shall be interpreted in good faith.

Therefore, in the case of the South China Sea arbitration, the Statement made by the Chinese Government in 2006 in accordance with Article 298 of the UN Convention must be defined as a bilateral agreement with the Philippines, and meanwhile should be interpreted in good faith in relation to the scope of the subject matter to be excluded by the Chinese Government intention. The Arbitral Tribunal also has an obligation to read from the context -- including a series of diplomatic statements and declarations made by China since it returned the arbitration notice to the Philippines on February 19, 2013 -- to determine whether the arbitration agreement between China and the Philippines is reached. If the Arbitral Tribunal could respect the established basic principles of international law and the long-term practice of the International Court of Justice, it is not difficult for it to draw a conclusion that China and the Philippines have not reached an agreement on the arbitration for the dispute settlement. Therefore, the established Arbitral Tribunal and announced jurisdiction by its ruling are all but serious ultra vires.

Placing the UN Convention over the customary international law

The ruling on the entity issues made by the Arbitral Tribunal on July 12, 2016, in terms of identifying facts and applying laws, is full of errors and loopholes, pride and prejudice, and is the award of ultra vires and infringement. The Arbitral Tribunal wrongly interpreted the national historic rights, and inland countries’ islands in ocean system under international law, and willfully expanded its authority to handle problems that should be taken up by the customary international law, willfully denied the customary law system, and negated China’s rights under customary practice.

The Arbitral Tribunal ruled that the historical rights and interests upheld by China within the dotted-line in the South China Sea are inconsistent with the spirit of the UN Convention. Anyone who has a little knowledge of the Chinese claims in the South China Sea knows the time of China’s Government official announcement of the dotted-line can be traced back to the year 1948, far earlier than the year 1982 when the UN Convention was born. The dotted-line in the South China Sea is not produced by the UN Convention. Thus, regulations established later cannot be used as the legal basis and premises to tailor the legitimacy of the previously existing rights and interests. Besides, the UN Convention Preface clearly stipulates that the matters which the UN Convention has not specified should continue to have the general rules and principles of international law as the basis. The Arbitral Tribunal was, out of context, using the UN Convention in this case, separating the integrity and the organic connection between the different clauses of the UN Convention, between the UN Convention and the customary international law, and between legal rules and legal principles, and made a serious error in applying law.

The Arbitral Tribunal wrongly interpreted the standards on a island under the Third section of Article 121 of the UN Convention, and willfully worked out standards to determine whether the state parties concerned have an agreement, and whether some islands have the legal status on which the international judicial practice has always avoid touching, downplayed all oceanic evidences China has upheld for the South China Sea to those “without island status”, thus, in serious violation of China’s territorial sovereignty, sovereign rights and oceanic jurisdiction.

Since ancient time, there are two kinds of ideas about the order of the sea: closed waters (Mare Clausum) and open waters (Mare Liberum). These two major principles of the law of the sea have developed up to date into a principle of domination, and a principle of freedom on the high seas. The UN Convention is the result of combining and expanding the two principles, and absorbs since the modern time the diversified ideas of marine rights of coastal states, such as the system of the continental shelf and exclusive economic zone, meanwhile safeguards the principle of freedom on the high seas, such as limiting the rights of the coastal states in the exclusive economic zone only to economic activities.

There is only one clause on the island system in the UN Convention, that is, Article 121. The oceanic evidences (islands, reefs, low-tide heights, etc.) in broad sense have complex geographical features and diverse legal status, can produce different marine rights and interests and has different effect in maritime delimitation. These contents are too much to be tailored by single clause. However, because a fundamental property of the reefs legal status is directly related to a country's territorial sovereignty -- those islands that can be supportive of human life or of human economic activities undoubtedly belong to the national territory; low-tide heights and reefs are difficult to be recognized as part of the national territory under the UN Convention system; and between the above-mentioned two kinds of typical marine evidences, there are tens of thousands of different islands, reefs, beaches in various shapes, etc., hence, a judgment on their legal status directly leads to expanding or reducing sovereignty and territory of a country. The Arbitral Tribunal attempted to deny islands status of the Nansha Islands and the islands property, and in essence, pinched one kind of marine law -- the freedom on the high seas -- against another principle -- the land dominating the ocean, and would seriously damage the stability and integrity of the contemporary system of the law of the sea.

The abuse of power undermines the authority on the dispute settlement mechanism of the UN Convention

Arbitration, as a kind of dispute settlement in parallel with filing a suit between two parties to a dispute, has a long history, and is widely used by all countries in the modern world, which constitutes the basis of modern legal system. The foundation of a fair arbitration is the voluntary choice of parties concerned. As a permanent mechanism, the judiciary is mandatory. Therefore, the justice of the judiciary is dominated by the authorized political organs --- for example, the state is responsible for the fairness of its country's judiciary court system. And a prerequisite for parties to file arbitration is the voluntary principle. In particular, some professional arbitration institutions are often based on social organizations and become the latter in the political state -- civil society binary structure. This means that the fairness of an arbitration is based on the cognition of the parties concerned. International arbitration is even more so, an international dispute submitted to arbitration shall require agreement reached by the parties to the dispute. As the British International law expert Brownlie said that there is no general obligation to resolve disputes by international law, … seeking dispute resolution in a formal legal procedure depends on consent of the parties concerned, …respecting the parties intention is an inevitable result of the sovereign equality of all states.

Review of ad hoc arbitration system can find in history a common choice for parties concerned, i.e. arbitration personnel often with noble character and high prestige, profound knowledge, fairness with people and familiar with the situation, which is also a basic required qualification for an arbitrator. For example, during ancient Rome period, various cities would submit disputes to the Senate of Rome for arbitration, the arbitration on the territorial dispute in 1493 between Spain and Portugal was undertaken by Pope Alexander VI.

While, of the composition of the South China Sea disputes Arbitral Tribunal, four arbitrators are from Europe, one from Africa. Whether they are familiar with the complex history and geopolitical status quo of the South China Sea, now seems to be questioned. What's more, some of the arbitrator's legal professional ethics is also flawed. For example, Holland arbitrator Alfred Soons has long argued that defining legal status of islands is an integral part of the maritime delimitation. But in this case, the professor changed his position that the determination of a reef legal status can be decoupled from its maritime delimitation, which was used as a reason to ignore China's Statement on the Exclusion. This uncharacteristical and uncertain position does not conform to qualification of an arbitrator's identity and fairness, and made the seriousness of international law a trifling matter.

Meanwhile, it is worth noting that the legal accountability of international institutions has been the general concerns of the international community. In 2002, the 54 Session of the United Nations Committee on International Law included the international organization accountability in its work program, and research work has been carried out with important progress achieved. The 66th United Nations General Assembly adopted the resolution on Responsibility of International Organizations Draft, thus, the legal system framework of the international organizations responsibility is initially formed. With this trend, the temporary nature and the lack of accountability mechanisms of an arbitral tribunal, to a certain extent, encouraged some arbitrators to take irresponsible attitude to the international politics. How the interim Arbitral Tribunal bears the losses on the parties concerned caused by its wrong ruling, the parties concerned and the international community having the Arbitral Tribunal legally accountable require parties to the UN Convention to consider.

After the ruling, some senior law experts held that the Arbitral Tribunal made a bold innovative ruling, and kept in mind the mandate to hear and decide the case with a developing view. Therefore, In essence, the purpose of the South China Sea arbitration case is not meant to solve the dispute between China and the Philippines, the Western forces with the help of the UN Convention mechanism and the Arbitral Tribunal discretion attempted to “re-legislate” for the South China Sea disputes.