Republic of the Philippines v People's Republic of China

• Judge: Cot,Mensah,Wolfrum,Soons,Pawlak
• Court: Arbitration Tribunal (International)
• Date: 12 July 2016

Arbitration Tribunal2

Award on Jurisdiction and Admissibility.

(Mensah, President;Cot, Pawlak, Soons and Wolfrum, Members)3

South China Sea Arbitration

(Republic of the Philippines

and

People's Republic of China)1

Arbitration — Jurisdiction and admissibility — United Nations Convention on the Law of the Sea, 1982 (“UNCLOS”) — UNCLOS Part XV and Annex VII — Preliminary matters — Consequences of non-participation by respondent in arbitration proceedings — Whether arbitration constituting abuse of legal process — Identification and characterization of dispute — Whether dispute concerning interpretation and application of UNCLOS — Whether dispute concerning territorial sovereignty — Whether dispute concerning maritime delimitation — Whether third parties indispensable to proceedings

Arbitration — Preconditions to Tribunal's jurisdiction — UNCLOS Part XV, Section 1 — UNCLOS Articles 281, 282 and 283 — Whether Parties agreeing to seek settlement by a means of their own choice — Whether settlement reached by recourse to agreed means — Whether Parties' agreement excluding further procedure — Whether Parties agreeing through general, regional or bilateral agreement to submit dispute to procedure entailing binding decision — Whether Parties having agreed to opt back in to Part XV — Obligation to exchange views — Obligation to negotiate prior to initiation of compulsory procedures

Arbitration — Limitations and exceptions to Tribunal's jurisdiction — UNCLOS Part XV, Section 3 — Automatic limitations under Article 297 — Optional exceptions under Article 298 — China's declaration under Article 298 — Exclusions concerning maritime delimitation — Exclusions concerning historic titles — Exclusions concerning military activities — Exclusions concerning law enforcement activities — Whether issues of jurisdiction possessing exclusive preliminary character

Sea — Scope of UNCLOS — Title to land territory — Historic rights to maritime spaces — South China Sea — China's “nine-dash line” — Scope of maritime entitlements under UNCLOS — Historic rights to living and non-living resources within nine-dash line

Sea — Islands and other maritime features — UNCLOS Articles 13 and 121 — Maritime entitlement of features — Whether features constituting low-tide elevations — Whether low-tide elevations capable of appropriation — Whether features constituting rocks — Whether Spratly Islands having high-tide features

Sea — Fisheries — UNCLOS Articles 2(3), 56, 58,60,77 and 80-Traditional fishing at Scarborough Shoal — Whether China interfering with oil exploration at Reed Bank — China's 2012 moratorium on fishing in South China Sea — Flag State's obligation of due diligence over fishing vessels — Whether China constructing artificial islands and installations at Mischief Reef — Philippines' jurisdiction over artificial islands in exclusive economic zone and continental shelf

Sea — Marine environment — UNCLOS Articles 123, 192, 194, 197 and 206 — Marine environment protection — Whether China engaging in harmful fishing practices — Whether China constructing artificial islands, installations and structures on seven reefs in Spratly Islands — Obligation to prevent direct harvesting of endangered species — Obligation to prevent destruction of endangered species' habitat — Obligation to cooperate — Obligation to communicate environmental impact assessment

Sea — Safety at sea — UNCLOS Article 194 — Convention on the International Regulations for Preventing Collisions at Sea, 1972 (“COLREGS”) — COLREGS Rules 2, 6, 7, 8, 15 and 16 — Safety of navigation — Risks of collision — China's operation of law enforcement vessels at Scarborough Shoal

Sea — Dispute settlement — UNCLOS Part XV — UNCLOS Articles 279, 296 and 300 — Duty to refrain from aggravating or extending a dispute during settlement proceedings — General international law — Duty to abstain from measure capable of exercising prejudicial effect on execution of decision

Treaties — Binding agreements — Declaration of Conduct of Parties — Bilateral agreements — Treaty of Amity and Cooperation in Southeast Asia, 1976 — Convention on Biological Diversity, 1992 — Whether Declaration of Conduct binding agreement on means of dispute settlement — Whether bilateral statements constituting legally binding agreements — Interpretation

Summary:4The facts:—The South China Sea,5 a semi-enclosed sea covering an area of approximately 3.5 million square kilometres in the western Pacific Ocean bordered by seven States including China and the Philippines, was the subject of a number of overlapping maritime claims, as well as disputed territorial claims to islands and other features located within the Sea. China's claims were based on a “nine-dash line” depicted on a map submitted to the Secretary-General of the United Nations in 2009.6 Within

the “nine-dash line”, China occupied a number of geographical features, including Scarborough Shoal, McKennan Reef, Gaven Reef, Mischief Reef, Second Thomas Shoal, Subi Reef, Johnson Reef, Cuateron Reef and Fiery Cross Reef. China and the Philippines both claimed sovereignty over Scarborough Shoal, whose surrounding waters were traditional fishing grounds for fishermen from many different countries

From 2010, there had been a number of incidents in which China reportedly acted to prevent the Philippines from exploiting resources in waters which, according to the Philippines, lay within 200 nautical miles (“nm”) of its baselines. In particular, on 1 March 2011, China Marine Surveillance (“CMS”) vessels intercepted a seismic survey vessel, M/V Veritas Voyager, and called upon it to leave Reed Bank. On 10 May 2012, China announced a fishing moratorium in the South China Sea which was applicable to foreign ships in most parts of the South China Sea, including Scarborough Shoal. Chinese fishing vessels were seen operating at Mischief Reef, Second Thomas Shoal and Scarborough Shoal, accompanied by Chinese Government vessels on many occasions, while Filipino fishermen were allegedly prevented from engaging in fishing activities in these areas. In April and May 2012, Chinese vessels sought to obstruct Philippine vessels from approaching or gaining entrance to Scarborough Shoal.

According to documents submitted by the Philippines, there had been a number of instances since the late 1990s in which Chinese fishing vessels engaged in environmentally harmful fishing practices, such as trawling, dredging and using explosives or propellers to break up coral, as well as harvesting endangered or threatened species at Scarborough Shoal and Second Thomas Shoal. From the end of 2013, China embarked on a massive building project on seven reefs in the Spratly Islands, including Cuateron Reef, Fiery Cross Reef, Gaven Reef (North), Johnson Reef, Hughes Reef, Subi Reef and Mischief Reef. China deployed a large fleet of vessels to the seven reefs, primarily using heavy “cutter-suction dredge” equipment to create more than 12.8 million square metres of new land in less than three years.

Besides the United Nations Convention on the Law of the Sea, 1982 (“UNCLOS” or “the Convention”), there existed several instruments regarding the resolution of disputes between the Philippines and China. These included the 2002 Declaration on the Conduct of the Parties in the South China Sea (“DOC”) signed by the Governments of the Association of Southeast Asian Nations (“ASEAN”) Member States and China,7 a series of bilateral documents between the two States concerning the South China Sea,8 and the Treaty of Amity and Cooperation in Southeast Asia, 1976

(“the Treaty of Amity”) to which both the Philippines and China were Parties.9

On 25 August 2006, China made a declaration under Article 298 of UNCLOS, declining to accept any of the procedures provided for in Section 2 of Part XV of the Convention with respect to all the categories of disputes referred to in paragraph 1(a)-(c) of Article 298 of the Convention.

On 22 January 2013, the Philippines initiated arbitration proceedings against China concerning four broad categories of dispute. First, the Philippines asked the Tribunal to resolve a dispute concerning the source of the Parties' maritime rights and entitlements. In that context, it sought declarations that China's rights and entitlements could be based only upon UNCLOS and not on any claim to historic rights. Secondly, it sought resolution of a dispute regarding the maritime entitlements generated by certain specific features, seeking a declaration that various features claimed by China, including Scarborough Shoal, were either rocks or low-tide elevations which did not generate an entitlement to a continental shelf or exclusive economic zone (“EEZ”). Thirdly, the Philippines raised a series of disputes regarding the lawfulness of certain Chinese actions in the South China Sea, specifically referring to alleged interference with the exercise of the Philippines' rights regarding resources, failure to protect the marine environment and damage to that environment. Lastly, the Philippines asked the Tribunal to find that China had aggravated and extended the disputes by restricting access to a detachment of Philippine marines stationed at Second Thomas Shoal and by engaging in the large-scale reconstruction of artificial islands and land reclamation at seven reefs in the Spratly Islands.

In its final submissions, the Philippines requested the Tribunal to adjudge and declare that:

• 1. China's maritime entitlements in the South China Sea, like those of the Philippines, might not extend beyond those expressly permitted by UNCLOS;

• 2. China's claims to sovereign rights and jurisdiction, and to “historic rights”, with respect to the maritime areas of the South China Sea encompassed by the so-called “nine-dash line” were contrary to the Convention and without lawful effect to the extent that they exceeded the geographic and substantive limits of China's maritime entitlements expressly permitted by UNCLOS;

• 3. Scarborough...