Republic of the Philippines vs.

China
Permanent Court of Arbitration Case Number 2013–19
12 July 2016

FACTS:

In 2016, the Arbitral Tribunal of the Permanent Court of Arbitration passed a judgement in about
the claims brought by Philippines against China regarding the legal basis of maritime rights and
entitlements, the status of certain geographic features, and the lawfulness of certain actions taken
by China in the South China Sea.

It is the contention of the Philippines that China’s claims based on “historic rights” encompassed
within its so-called “Nine-dash Line” are inconsistent with the UNCLOS and therefore invalid. The
Philippines also claims in particular that Scarborough Shoal and eight of such features in the
Spratlys are low-tide elevations or submerged banks that merely generate a territorial sea, not an
exclusive economic zone or continental shelf. It also declares that China has violated the UNCLOS by
interfering with the Philippines’ sovereign rights and freedoms, through construction and fishing
activities that have harmed the marine environment.

The Philippines also states that there is Chinese interference with the living and non-living
resources of the Philippines which are primarily concerned with fishing practices in the South
China Sea and oil and gas exploration and exploitation. It put forward four contentions related to
living resources: China’s prevention of fishing by Philippine vessels at Mischief Reef since 1995, and
at Second Thomas Shoal since 1995, China’s revision of the Hainan Regulation and China’s
moratorium on fishing in the South China Sea in 2012.

In 2006 China specifically made a declaration to exclude maritime boundary delimitation from its
acceptance of compulsory dispute settlement. In this controversy China bases it claims on historic
rights, as demarcated by the ‘Nine Dash Line’ on its official maps of the region in question. China’s
Foreign Ministry stated its position with regard to the proceedings by publishing a Position Paper
in 2014. It claimed that the Tribunal lacks jurisdiction over the matter because the essence of the
subject-matter of the arbitration is the territorial sovereignty over the relevant maritime features
in the South China Sea. China also has shown disagreement with Philippines’ decision to take the
matter to arbitration and has decided neither to agree with the decision of the Tribunal nor to
participate in the proceedings.

ISSUES

1. To resolve a dispute between the parties regarding the source of maritime rights and
entitlements in the South China Sea
2. To resolve a dispute between the parties concerning the entitlements to maritime zones that
would be generated under the Convention by Scarborough Shoal and certain maritime features in
the Spratly Islands that are claimed by both the parties
3. To resolve a series of disputes concerning the lawfulness of China’s actions in the South China
Sea, vis-à-vis interfering with Philippine’s rights, failing to protect and preserve the marine
environment, and inflicting harm on the marine environment (through land reclamation and
construction of artificial islands)

4. To find that China has aggravated and extended the disputes between the Parties by restricting
access to a detachment of Philippines Marines stationed at Second Thomas Shoal.

HELD:

The Tribunal considered China’s Position Paper as a plea on jurisdiction, and conducted a separate
hearing on the issue of jurisdiction and admissibility. Additionally, the Tribunal also declared that it
would honor China’s declaration of 2006 and the UNCLOS and would neither delve into issues of
maritime boundary delimitation or questions of sovereignty.

The Tribunal established that the Convention supersedes any treaties in force before its coming
into force. It questioned China’s claim to historical rights in the region, and established that China’s
state practice does not show that China had been enjoying any historical rights in the South China
Sea; rather, it was enjoying the freedom of the high seas and since it did not create bar to other
states’ usage of the same, it could not be understood as being a historical right. Furthermore, since
China’s publishing of the same in its Notes Verbales in 2009, many states have objected to its claim
as well. “The Tribunal concludes that the Convention superseded any historic rights or other
sovereign rights or jurisdiction in excess of the limits imposed therein.”

The Tribunal concluded that Scarborough Shoal, Cuarteron Reef, Fiery Cross Reef, Johnson Reef,
McKennan Reef and North Gaven Reef were all found to be high-tide features. The Tribunal further
noted that for the purposes of Article 121(3), the high-tide features at Scarborough Shoal and the
reefs were rocks that cannot sustain human habitation or economic life of their own and so have no
exclusive economic zone or continental shelf.

The Tribunal found the same to be true of the Spratly Islands and so concluded that China,
therefore, has no entitlement to any maritime zone in the area of Mischief Reef or Second Thomas
Shoal. They do, however, form part of the exclusive economic zone and continental shelf of the
Philippines as they lie within 200 nautical miles of the Philippines’ coast and there are no
overlapping entitlements in the area with respect to China.

In the issue of Chinese interference with the Philippines resources, the Tribunal finds that China
had breached Articles 77and 56 of the Convention through the operation of its marine surveillance
vessels which interfered with Philippines’ oil and gas exploration and through its moratorium on
fishing which interfered with the exclusive economic zone of the Philippines.

The Tribunal also found China in breach of Article 58 (3)of the Convention, due to its failure to
prevent fishing by Chinese flagged ships in the exclusive economic zone of the Philippines, failing to
respect the sovereign rights of the Philippines over its fisheries in its exclusive economic zone.
The Tribunal opined that China was, in fact, in contravention of the Convention by interfering with
the traditional fishing practice of the Philippines in its exclusive economic zone through the
deployment of its official ships in the region. The Tribunal also noted that this decision does not
depend on the question of sovereignty, and that the Tribunal once again refrained from
commenting on the matter. The Tribunal found that China was in breach of the Convention for
failing to stop the fishing vessels from engaging in harmful harvesting practices.

The Tribunal on the contention of the Philippines regarding the island building activities found that
China was in breach of the Convention for its island-building activities. The Tribunal further opined
that China’s construction on Mischief Reef, without authorization from Philippines was in violation
of Philippines’ sovereign rights in its exclusive economic zone and continental shelf and a breach of
the Convention.

The next consideration before the Tribunal was the demeanor of China’s law enforcement vessels at
Scarborough Shoal and the lawfulness of these actions. The Philippines also raised the issue under
the relevant provisions of the Convention on the International Regulations for Preventing of
Collisions at Sea, 1972 (COLREGS). The Tribunal found that China, through the actions of its law
enforcement vessels, endangered Philippine vessels and personnel and created a serious risk of
collision and found China in breach of Article 94 of the Convention.

ANNOTATION(S):

 In the exclusive economic zone, the coastal State has:

(a) sovereign rights for the purpose of exploring and exploiting, conserving and managing the
natural resources, whether living or non-living, of the waters superjacent to the seabed and of the
seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration
of the zone, such as the production of energy from the water, currents and winds;

(b) jurisdiction as provided for in the relevant provisions of this Convention with regard to:

(i) the establishment and use of artificial islands, installations and structures;

(ii) marine scientific research;

(iii) the protection and preservation of the marine environment;

(UNCLOS Part V, Article 56)

 States shall have due regard to the rights and duties of the coastal State and shall comply with
the laws and regulations adopted by the coastal State in accordance with the provisions of this
Convention and other rules of international law in so far as they are not incompatible with this
Part. (UNCLOS Part V, Article 58)