A Short Primer on the PH-China Arbitration

Prepared by: The Office of Representative Herminio Harry L. Roque Jr.

Former Professor of International Law and Constitutional Law, University of the Philippines, College of
Law
Former Director, Institute of International Legal Studies, UP Law Center
Vice-President for Southeast Asia and member, Executive Council, Asian Society of International Law

Introduction

The purpose of this primer is to inform the reader of the nuances of the case that is to be
decided shortly in the arbitration between the Republic of the Philippines and the People’s
Republic of China. By understanding the positions of China and the Philippines respectively,
one can predict the outcome of the case, and come up with a plan of action for the Philippine
government.

The Dispute: An Overview

Under international law, every sovereign state has the exclusive right to explore and exploit
the waters extending 200 nautical miles from its baselines – otherwise known as the Exclusive
Economic Zone. The Philippine-China dispute stems from China’s alleged interference of the
exclusive sovereign rights of the Philippines to its maritime entitlements under the UN
Convention on the Law of the Sea.

Over the past few years, China has prevented Filipino fishermen from fishing around various
locations or “features” within the West Philippine Sea. China has also constructed artificial
islands and implements in areas claimed by the Philippines as part of its Continental Shelf
and EEZ. The Philippines argues that all these actions are inconsistent with the rules laid out
by the United Nations Convention on the Law of the Sea (UNCLOS), a treaty to which both
States are state parties.

The dispute revolves around features such as the Scarborough Shoal, the Spratly Islands, and
various reefs and reclaimed lands. These are encompassed within what is known as the
“Nine-Dash Line” – an area China claims has always belonged to it in history.

By U.S. Central Intelligence Agency - Asia Maps — Perry-Castañeda Map Collection: South China Sea (Islands) 1988,
Public Domain,

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On the other hand, the Philippines claims that the disputed features within this supposed
Nine-Dash Line fall within its EEZ, measured off the baselines of Philippine territory – and
thus China is in no position to prevent Filipinos to exploit the resources within them.

The Arbitration of the Permanent Court of Arbitration (PCA).

The Philippines filed the case against China before the International Tribunal of the Law of
the Sea (ITLOS), a specialized international body dealing with disputes between states that
are parties to the UNCLOS. The actual proceedings however, are being conducted by the
Permanent Court of Arbitration (PCA), which acts as the registry for the ITLOS in the arbitral
proceedings. As a body, the PCA has extensive experiencing hearing disputes under Chapter
VII of the UNCLOS, which is the same part of the UNCLOs under which the Philippines
brought suit against the People’s Republic of China.

China has refused to formally participate in the proceedings. However it has made public its
arguments against the Philippine claim though various statements released to the public as
well as through letters sent to the individual members of the Tribunal.

To its credit, the ITLOS has taken every effort to account for the Chinese position – though
expressed largely through unofficial means, given the Chinese refusal to take part in the
arbitration – in the submissions made by the Philippines.

On October 29, 2015, the PCA released two documents to explain that it had jurisdiction over
the case between the Republic of the Philippines and the People’s Republic of China.

This ruling however, is limited only to the first phase of the arbitration, which concerns
whether the arbitral body may actually hear the Philippine case. Thus in this ruling, the
tribunal declared that it may proceed to hear the substantive arguments of the parties on
several points.

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 The experience of other international tribunals shows that sometimes courts can very well
rule in the preliminary or procedural phase that it has the jurisdiction to adjudicate the
questions brought before it by the parties but hold during the merits or substantive phase
that it has no jurisdiction to make any ruling on the substantive issues concerned. Thus,
winning in the procedural phase does not guarantee winning in the substantive phase.

Recently, it was announced that the merits of the case will finally be decided and released by
the first week of July 2016. In a few weeks, the PCA will finally resolve the substantive claims
of the Philippines against China.

At this juncture, it is important to note the following: (1) the issues the arbitration will not
address, (2) the issues to be resolved in the arbitration, and (3) the positions of the parties.

The Arbitration does not address which State has sovereignty or ownership over the
features within the West Philippine Sea.

Although it seems as though the Philippines and China are simply arguing over who has title
over the features such as the Spratly Islands, such is not the case.

Since the UNCLOS only deals with the law of the sea, any arbitration arising out of the rules
under the UNCLOS are limited to such rules. Thus, the tribunal cannot resolve a dispute
concerning sovereignty over land, or island for that matter.

Under international law, States may only claim title over lands or habitable islands. Strictly
speaking, States do not exercise sovereignty over the waters or the seas – the UNCLOS
merely provides or “delimits” certain rights to States, such as the right to explore or exploit
the waters, otherwise known as “sovereign rights.”

Sovereign rights are not equivalent to full sovereignty or ownership of a state over a land
territory or an island.

Where a state has full sovereignty, it may impose in the area found within its scope all of its
laws and exercise acts of ownership in the area. The concept of sovereign rights however,
deals only in general with a state’s right to exploit resources over a defined maritime area, to
the exclusion of other states.

While sovereign rights may not be coextensive with full sovereignty, nevertheless, it is of
exceeding importance in such an area as the West Philippine Sea teeming with oil and
natural gas, as well as rich fishery stocks, not to mention extensive areas known for their
rich biodiversity.

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 Maritime Zones under the UNCLOS

The UNCLOS provides that coastal States have sovereign rights to a Contiguous Zone, a
Continental Shelf, and an EEZ, to be measured off the baseline of its territory.

The Contiguous Zone is an area extending for 12 nautical miles from the limits of the
territorial sea or 24 nautical miles from the baseline. It is an area adjacent to the territorial sea
where a state may exercise certain protective jurisdiction, such as customs enforcement,
fiscal, immigration and sanitary rules.

The EEZ is an area adjacent to the territorial sea extending up to 200 nautical miles from the
baselines from which the territorial sea is also measured. Within the EEZ, a state has
sovereign rights to explore, exploit, conserve and manage natural resources, as well as build
artificial islands, carry out environmental protection and conduct marine scientific research.

The Continental Shelf is the undersea natural prolongation of the landmass of a State
extending beyond the territorial sea up to 200 nautical miles from the baselines of the
territorial sea. It is coextensive with the EEZ, but may extend for another 150 nautical miles
under the Extended Continental Shelf (ECS) Regime, depending on the presence of certain
geological features.

Oil and natural gas are often found in the Continental Shelf.

Thus, the UNCLOS provides the rules for establishing a state’s maritime entitlements. It does
not deal with the question of who owns land territories or islands for that matter. The issue

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of full sovereignty is determined by the rules of effectivite or exercise of sovereign acts –
something beyond the scope of the current arbitration.

The Arbitration could determine the marine entitlements of the features within the West
Philippine Sea

Without declaring which State exercises sovereignty over features such as the Spratly Islands,
the PCA could, however, declare the legal entitlements of the features. In other words, while
the PCA cannot say that a certain island belongs to China or the Philippines, it can however
say that a certain feature is, in fact and law, an island.

According to the UNCLOS, an island is a “naturally formed area of land, surrounded by

water, which is above water at high tide.” Additionally, islands must be able to sustain
human habitation or economic life. Meanwhile rocks are protrusions those that cannot
sustain human habitation or economic life.

If the PCA declares a certain feature to be an island, then the international community must
respect all legal entitlements associated to such an island. Such would be entitled to a
territorial sea, a Contiguous Zone, and Exclusive Economic zone and Continental shelf much
like any other land territory. On the contrary, if a certain feature is merely a rock, it would
only be entitled to no more than the 12 nautical mile-territorial sea.

The PCA may also hold that some of these disputed features in the West Philippine Sea are
merely “low-tide elevations” which are part of the seabed and cannot be acquired by a state,
unless they are part of its continental shelf. Nevertheless, the status of such elevations under
international law is disputed vigorously by China.

What are the issues raised before the Permanent Court of Arbitration?

The issues of the arbitration can be summarized into two:

(1) Whether or not the Nine-Dash Lines are ineffective and inconsistent with
international law?
(2) Whether or not the various features within the West Philippine Sea/South China Sea
generate maritime zones under the UNCLOS?
(3) Whether or not Panatag island falls within the Philippines’ Exclusive Economic Zone

What is the Philippines’ position on the case?

The Philippine position, summarized, is as follows:

(1) China’s claim and exercise of sovereign rights pursuant to the supposed Nine-Dash
Line is ineffective and inconsistent with international law, as the line exceeds
maritime entitlements under UNCLOS;
(2) The Philippines is entitled to a territorial sea, an EEZ, and a Continental Shelf under
the UNCLOS and to enjoy sovereignty and sovereign rights as appropriate to these
maritime entitlements.
(3) The various features in the West Philippine Sea, such as Mischief Reef, Second
Thomas Shoal, and others, are low-tide elevations that are not entitled to certain
maritime zones under the Law of the Sea that China may lay a claim over;
(4) Accordingly, China’s acts of preventing Philippine nationals from enjoying its
sovereign rights within these areas and those areas over which it is entitled under

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 UNCLOS, as well as its alleged construction, exploration and exploitation activities
are inconsistent with its obligations under the Law of the Sea.
(5) The Philippines has sovereign rights over the waters outside the 12 nautical miles of
Scarborough shoal but within the 200 nautical miles of the country’s EEZ.

What is China’s position on the case?

Briefly, based on reports and statements made by Judge Due Hanquin of the Asian Society of
International Law, the Chinese position is as follows:

(1) The arbitral tribunal has no subject matter jurisdiction since what are involved are
maritime territories generated by land territories;
(2) Assuming arguendo that the Tribunal has subject matter jurisdiction, it is barred
because it is a matter of delimitation, which China has reserved from the jurisdiction
of the UNCLOS dispute settlement procedure.

Thus, the Philippines makes the following claims in regard to certain features in dispute (the
Tribunals October 29, 2015 holdings on jurisdiction and admissibility of the claims are also
presented):

Features/claims in Location Philippine Position Tribunal’s ruling

dispute on jurisdictional
issues

The legality and validity Entirety of the West These are excessive The possible
of the Chinese Nine Philippine Sea and violate the jurisdictional
Dash Line Claim maritime entitlements objections with
under the Law of the respect to the
Sea dispute does not
possess an
exclusively
preliminary
character as these
may involve a
discussion on
historic bays and
titles, which are
outside the
Tribunal’s
jurisdiction.
Accordingly, the
Tribunal reserved a
decision on its
jurisdiction with
respect to the
Philippines’ for
consideration in
conjunction with
the merits of the
Philippines’
claims.

China’s alleged Waters around the The Philippines is The PCA

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Interference with the features in dispute entitled to sovereign reserved its
Philippines’ petroleum rights in these areas ruling on
exploration, seismic jurisdiction on
surveys, and fishing in this point for
what the consideration in
Philippines claims as its the Merits phase,
exclusive economic because of
zone as well as Chinese potential
fishing within the same overlapping
zone. maritime
entitlement
claims with
China (the
presence of
which h would
entail a
delimitation of
boundaries, a
process outside
the Tribunal’s
jurisdiction).

Chinese fishing within The Shoal is within To the extent that

the Scarborough Shoal the Philippines’ EEZ the claimed
rights and
alleged
interference
occurred within
the territorial
sea of
Scarborough
Shoal, the
Tribunal
concludes that it
has jurisdiction
to address the
matters raised in
the Philippines’
claims.

The dispute concerning Both the Spratlys The Chinese has The Tribunal has
the protection and Group of Islands and violated its jurisdiction over
preservation of the the Scarborough obligations to protect this question.
marine environment at shoal area the marine
Scarborough Shoal and environment under
Second Thomas Shoal the UNCLOS and
related treaties

The legality of China’s Spratlys Group of Chinese construction The Tribunal

activities on Mischief Islands activities are illegal reserved its
Reef and their effects on ruling on
the marine jurisdiction on
environment. this point for

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 consideration in
the Merits phase,
as it would first
require a
determination as
to whether the
Reef is an island
or a rock under
the UNCLOS.

The dispute on China’s Scarborough Shoal These are illegal To the extent that
law enforcement area activities the
activities in the vicinity claimed rights
of Scarborough Shoal. and alleged
interference
occurred within
the territorial sea
of Scarborough
Shoal, the
Tribunal
concludes that it
has jurisdiction
to address the
matters raised in
the
Philippines’
Submission.

The dispute concerning Spratlys Group of These are illegal The Tribunal
China’s activities in and Islands activities considers the
around Second Thomas specifics of
Shoal and China’s China’s activities
interaction with the in and
Philippine military around Second
forces stationed on the Thomas Shoal
Shoal. and whether
such activities
are military in
nature to be a
matter
best assessed in
conjunction with
the merits.

Both the Spratlys China is obligated The Tribunal

That China refrain from Group of Islands and under UNCLOS to considers the
further interfering with Scarborough Shoal cease and desist specifics of
Philippine activities or China’s activities
from carrying out its ion this point
unlawful activities s to be a matter
best assessed in
conjunction with
the merits.

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Mischief Reef, Subi Spratlys Group of These are submerged The Tribunal
Reef and Second Islands features not above sea reserved its
Thomas Shoal level at high tide, not ruling on
islands under the jurisdiction on
Convention but China this point for
has illegally occupied consideration in
them and constructed the Merits phase,
structures on them. because of
potential
Moreover, Mischief overlapping
Reef and Second maritime
Thomas Shoal are part entitlement
of the exclusive claims with
economic zone and China (the
continental shelf of presence of
the Philippines; which would
entail a
delimitation of
boundaries, a
process outside
the Tribunal’s
jurisdiction).

Scarborough Shoal Off the coast of Are submerged The Tribunal

Zambales features like the found that it has
above, but have jurisdiction to
protrusions that hear the
remain above the Philippines’
waters even at high claim over the
tide, qualifying them features, of the
as rocks that generate shoal there being
no more than a no potential
territorial sea and no overlapping
entitlement to an claims with
exclusive economic China or any
zone or continental other state.
shelf;

Johnson Reef, Cuarteron Spratlys Group of Are submerged The Tribunal

Reef and Fiery Cross Islands features like the found that it has
Reef above, but have jurisdiction to
protrusions that hear the
remain above the Philippines’
waters even at high claim over these
tide, qualifying them features, there
as rocks that generate being no
no more than a potential
territorial sea and no overlapping
entitlement to an claims with
exclusive economic China or any
zone or continental other state.
shelf

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Gaven Reef and Spratlys Group of Are low-tide The PCA
McKennan Reef Islands elevations that do not reserved its
(including Hughes Reef) generate entitlement ruling on
to a territorial sea, jurisdiction on
exclusive economic this point for
zone or continental consideration in
shelf, but their low- the Merits phase,
water line may be because of
used to determine the potential
baseline from which overlapping
the breadth of the maritime
territorial sea of entitlement
Namyit and Sin claims with
Cowe, respectively, is China (the
measured; presence of
which h would
entail a
delimitation of
boundaries, a
process outside
the Tribunal’s
jurisdiction).

How will the tribunal likely decide?

Many observers have opined that the Tribunal’s ruling in the merits phase would go the way
of the Philippines.

Yet it would be more likely that the Tribunal will not declare the Nine-Dash Line illegal.

The most contentious issue at the moment is that of the Itu Aba, a feature located within the
Spratly Islands. This was a sore point within the Philippine delegation, as Justice Antonio
Carpi o has insisted that this be included in the Philippine claims, saying that it is too small to
be an island.

The then Solicitor General, Francis Jardeleza (now also an Associate Justice of the Supreme
Court) and who nurtured the Philippine claim until it was filed with the ITLOS, disagreed,
saying that it is in fact the largest of the features and is clearly able to sustain human life,
with a source of fresh water and a population (it is under the control of Taiwan).

The Itu Aba is believed by many experts to remain above sea level at high tide and contain
enough fresh water to sustain human life, which would qualify it as an island in the view of
international law.

If the PCA declares the Itu Aba to be an island, both the Philippines and China would then be
in a situation where the sovereignty over that island would first have to be resolved as a
condition precedent to declaring the Nine-Dash Line illegal. Remember that the Philippines
adheres to the One-China policy, which then requires it to recognize the feature as part and
parcel of the Chinese claim.

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If the island does indeed belong to China, then China would be entitled to a 200-mile EEZ
opposite Palawan. This would not only seem to justify China’s actions; it would also
complicate the issue by creating an overlap of EEZs among states which would require
delimitation – something China has reserved from UNCLOS dispute settlement procedures
consistent with the treaty.

If Itu Aba or any other feature is indeed declared an island, then the Tribunal may accept the
Chinese position. The lawfulness of the Nine-Dash Line could be viewed as a “mixed claim”
that involves resolving an issue of territorial sovereignty – something beyond the jurisdiction
of a dispute settlement under the UNCLOS.

The Tribunal will likely declare the other features as low-tide elevations not entitled to
maritime zones.

As a matter of fact, many of the features within the West Philippine Sea are not islands able
to sustain human life. Thus, the Tribunal will declare them simply as low-tide elevations.
However, this being the case, so long as one feature, such as the Itu Aba, is declared an
island, such would prove to be difficult for the Philippines to achieving its ultimate goal of
declaring the Nine-Dash Line unlawful.

The Tribunal’s decision regarding China’s activities in the West Philippine Sea will depend
on its ruling on the Nine-Dash Line issue.

Should the Tribunal decide that it cannot declare the Nine-Dash Line unlawful for lack of
jurisdiction, it would follow that the Tribunal will not rule on the acts of China towards the
Philippine fishermen. This is because the rights of both parties within the waters would
remain undecided until the issue of sovereignty is resolved.

How should the Philippine government react to such a decision?

If the Tribunal should refuse to declare the Nine-Dash Line unlawful (either on the merits or
due to lack of jurisdiction), the Philippines would be left with no other choice but to reengage
in diplomatic relations. By negotiating with China peacefully, the Philippines could seek for
compromises in protecting the rights and welfare of Philippine fishermen.

Should the Philippines seek to claim sovereignty over the features within the West Philippine
Sea, it may certainly do so, subject to China’s willingness to enter into another arbitration for
that purpose. But the chances of that are almost non-existent, in light of China’s previous
behavior.

Moreover, even if the Tribunal should declare the Nine-Dash Line unlawful, the Philippines
should still improve its diplomatic relations with China to encourage the latter to respect the
ruling.

Unlike in domestic proceedings where the State may use police power to execute judgments,
no such effective power exists under international law. Compliance with rulings of
international tribunals and arbiters relies heavily on international comity and respect for
international law.

International law, being founded for the most part on the consent of states, has been
traditionally critiqued as ineffective and not “real law” because of the absence of a
centralized enforcement mechanism one usually sees in the domestic level.

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It has been argued that China, a country straining hard to acquire leadership status among
the nations, cannot really afford a brazen disregard of international rules to which it has itself
signed on. Thus, even if at the beginning, it refuses to abide by a ruling favorable to the
Philippines, in the long run, it will have to reckon with it, as going against it will affect its
trade and diplomatic relation with other countries.

But any ruling on the Nine-Dash Line claim will not by itself resolve all the territorial disputes
in the South China Sea, inasmuch as it will only pertain to the maritime reaches of the Chinese
claim.

It has to be remembered that the UNCLOS only applies to maritime regimes, but not to
conflicts involving islands. The latter conflicts will have to refer to general international law,
which involve the question of who has better title to a particular island or land territory based
on effective occupation.

Still, an arbitral ruling on China’s claims to alleged islands and rocks that are under water, as
well as the issue of which state may have sovereign rights on the waters surrounding then,
will make the resolution of the entirety of the territorial conflicts in the South China Sea a little
less complicated.

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