Philippines vs. China: Arbitral Claims under UNCLOS

Launching the Arbitral Case

The arbitration, filed in accordance with the dispute settlement provisions of the 1982 UN Convention on the Law of the Seas (“UNCLOS”) (Art. 287 and Annex VII (“Arbitration”), commenced on 22 January, 2013, when the Philippines served China with a “Notification and Statement of Claim” “over the maritime jurisdiction of the Philippines in the West Philippine Sea.” On 19 February, 2013, China, in a diplomatic note setting out “the Position of China on the South China Sea issues,” rejected the Notification. Both countries ratified UNCLOS.

Part 1. Philippines’ good-faith attempts at negotiations with China

As Paul S. Reichler, Lead Counsel for the Philippines, explains at an UNCLOS discussion: “Negotiations go back to 1995 … China simply held on to the position that China had sovereignty and sovereign rights within the 9-dash line.” The situation was aggravated in April 2012 by Chinese ships surrounding Scarborough Shoal.” “And in the spring of this year, China moved in on Second Thomas Shoal.” (P.S. Reichler, Foley Hoag LLP)

Part 2. What lies at stake?

PHILIPPINES: If China’s claim [assertion of its 9-dash line] were allowed to stand, the Philippines stands to lose substantial rights to her Exclusive Economic Zone (EEZ). China would deprive fishermen from Zambales and Pangasinan of their livelihood. China’s land reclamation and islandbuilding activities would damage the marine ecosystem. The safety of maritime vessels would be at risk. The potential to exploit a major hydo-carbon resource in Reed Bank (100 miles off Palawan) would be lost.

CHINA: Apart from asserting sovereignty over “an area defined by the “9-dash line,” a right that China asserts “goes back centuries to when the Paracel [disputed by Vietnam] and Spratly island chains were regarded as integral parts of the Chinese nation” (BBC News), China has refused to take part in the case, or to accept the jurisdiction of the Tribunal. (see the PROC’s Position Paper, 7 Dec. 2014)

Part 3. Philippines Resorts to Arbitration in accordance with UNCLOS

  1. Philippines’ “Rules-based” Approach. As Reichler explains: “Confronting China militarily is not a viable option. The Philippines does not have the kind of economic or commercial influence” to change her behavior.” But the one option that appeared was the law” because “before an arbitral tribunal, a small State that is weaker militarily, economically, commercially, has the opportunity, at least, to compete on equal terms.” (Reichler, A UNCLOS discussion)
  2. Philippines’ Strategic Approach in the Arbitration. Adhering to the requisites of UNCLOS, the Philippines did not seek a ruling “on the territorial sovereignty aspect.” She instead sought a “clarification of her maritime entitlements.” Reichler elaborates: Under UNCLOS, “a coastal state entitlement is described as a 12-mile entitlement to a territorial
    sea over which the coast exercises sovereignty over land, and almost a 200-mile economic zone off its coast.” Within 200 miles off its coast, “a State has an exclusive entitlement to use the living resources, fish in the water, and the non-living resources under the sea bed, that is, the continental shelf.” “China’s claims conflict with this sovereignty or sovereign rights not only of 200 miles but of more than 800 miles” from her mainland coast.

(A) 9-dash line. The Philippines’ “main claim” is that China’s 9-dash claim, that is, her claim of sovereignty and sovereign rights extending far beyond her entitlement under UNCLOS, is “inconsistent with that Convention and it constitutes a trespass or violation of the Philippines within 200 miles.” (Reichler, A UNCLOS Discussion)

Reichler emphasizes: “Sovereignty is disputed.” But under UNCLOS, an arbitral tribunal “does not have jurisdiction to determine sovereignty over land features, and that includes islands or insular formation. However, what the Philippines has asked of the Tribunal is that it determine the status of this feature under the Convention, that is, is it a true island which would generate, like a State with a coastline, a 200- mile exclusive economic zone and continental shelf, or is it what the Convention refers to as a rock, an insular feature that is above water at high tide?” (Reichler; bold added)

(B) Scarborough Shoal [Panatag or Bajo de Masinloc]. It consists of 6 features, essentially “rocks.” “Now what is the significance of this? … Scarborough Shoal is about 120 miles off the coast of Luzon. So therefore, it is within the Philippines’ EEZ and continental shelf which would extend another 80 miles beyond.” Rocks are “entitled only to 12 miles.” This means that what “would be in dispute between China and the Philippines would be a circle with a 24-
mile diameter… All of the waters not inside that circle would be part of the Philippines’ EEZ and continental shelf.” All that would remain disputed “would be the feature and the waters within that circle… to be resolved when sovereignty over Scarborough Shoal is determined.”

(C) The Spratlys (south of Scarborough Shoal, off Palawan). They comprise “about 140 different features.” Characteristic of “rocks” – they “do not support human habitation or economic life.” The Philippines has focused on 7 features occupied by China, 4 of which are “part of the seabed” and 3 of which are “rocks.” (i) Four are “under water at all times. They are not only not islands; they are not low-tide elevations. They are shallow reefs. As such, they are considered under international law and under UNCLOS to be part of the seabed. And they belong to whichever State has rights over the continental shelf. They cannot be seized and occupied by another State. We don’t apply title by occupation of underwater features.” (ii) Three features “are above the water at high tide” with only 12-mile entitlements.

(D) Mischief Reef [Panganiban] (about 100 miles off the Philippine coast and 600 miles from the Chinese mainland coast). China seized Mischief Reef in 1995 and constructed on it a “barracks” and a “helipad.” 2nd Thomas Shoal [Ayungin Shoal] (within 100 miles of Palawan). China sent a “rather large flotilla to another under water feature.” (Reichler)

Part 4. Award finding “jurisdiction and admissibility,” 29 October, 2015, with corresponding testimony at the Hearing on the Merits.

China’s non-participation does not constitute a bar to the arbitral proceedings. (see Art. 9, Annex VII, “Default of appearance”, UNCLOS)

The Tribunal “bifurcated” its findings:

(i) finding that the Tribunal has jurisdiction on Submissions No. 3, 4, 6, 7, 10, 11, and 13; and

(ii) reserving to the merits phase the jurisdictional question on Submissions No. 1, 2, 5, 8, 9, 12, and 14, necessitating a hearing (which concluded on 30 November, 2015).

Section A. Submissions Nos. 3, 4, 6, 7, 10, 11 & 13:

(1) Submission No. 3: whether Scarborough Shoal [Panatag or Bajo de Masinloc] is an “island” or “rock.” (Art. 121, UNCLOS)

At the Hearing on the Merits, Independent Expert Clive Schofield presented his findings on 47 features, and on their classification: “insular, low tide, or high tide elevations.” He showed “Landsat images of Scarborough Shoal at high tide and low tide.” (Schofield is Director of Research, Australian Centre for Ocean Resource and Security, Univ. of
Wollongong.) A 1784 map shows that “Bajo de Masinloc has always been part of the Philippines.”

(2) Submission No. 4, and (3) Submission No. 6: whether or not (a) Mischief Reef, Second Thomas Shoal, and Subi Reef [Zamora]; and (b) Gaven Reef [Burgos] and McKennan Reef (including Hughes Reef) [Chigua], are each “low-tide elevations,” namely, “a naturally formed area of land which is surrounded by and above water at low tide but
submerged at high tide.” (Art. 13, (1)).

Advocate Philippe Sands testified that all these reefs “are all low tide elevations” which do not generate entitlement to a territorial sea, EEZ, or continental shelf. (Prof. Sands, QC, Matrix Chambers, London). A video simulation demonstrated “how a cutter suction dredger, used by China in its construction activities,
“destroys the sea bed.”

(4) Submission No. 7: whether Johnson Reef [Mabini], Cuarteron Reef [Calderon], and Fiery Cross Reef [Kagitingan] are “rocks” or “islands.” Lead Counsel Paul S. Reichler testified that the features in the Spratly island group are rocks “not capable of sustaining human habitation.”

(5) Submission No. 10: China’s fishing activities at Scarborough Shoal. Advocate Alan Boyle and Independent Expert Kent Carpenter testified that these “illegal” fishing activities include “blast fishing, cyanide fishing, harvesting of giant clams, catching of turtles, and other endangered species.” (Prof. Boyle, Essex Court Chambers, London; and Carpenter, Dept. of Biological Sciences, Old Dominion University, Norfolk, Virginia)

(6) Submission No. 11: the protection and preservation of marine environment at Scarborough Shoal and Second Thomas Shoal. Boyle and Carpenter testified that China’s land reclamation and island building activities, and its “illegal” fishing activities have damaged “the complex ecosystem of coral reefs, biological diversity, and living resources in the South China Sea.”

(7) Submission No. 13: whether China’s law enforcement activities violate the “Convention on the International Regulations for the Prevention of Collisions at Sea” and UNCLOS. Boyle cited the “near-collisions” of Coast Guard vessels.

Section B: Submissions No. 1, 2, 5, 8, 9, 12, & 14

(8) Submission No. 1 concerns the source of China’s “maritime entitlements,” her “historic rights,” their nature, and the exclusion on “historic bays or titles.” (Art. 298 (a)(i)). Reichler testified that China’s historic claims “do not exist” under UNCLOS. For Advocate Bernard H. Oxman, they go “beyond its maritime entitlements.” (Prof. Oxman, University of Miami School of Law).

(9) Submission No. 2: the legal validity of China’s “historic rights,” their nature, and the exclusion on “historic bays or titles.” (see relevant testimony of Reichler and Oxman)

(10) Submission No. 5: the “sources of maritime entitlement” and whether overlapping entitlements to an EEZ or to a continental shelf exist in Mischief Reef and Second Thomas Shoal. Andrew Loewenstein testified that China has failed to satisfy the requirement for “a continuous exercise of exclusive control.” He presented 8 maps dating back to the Ming Dynasty “showing that China’s territory did not include the 9-dash line.” He presented “satellite images of various installations” that China constructed on Mischief Reef.

(11) Submission No. 8: China’s interference with the Philippines’ petroleum exploration, seismic surveys, and fishing within her EEZ. Reichler testified that under the 9-dash line, China has deprived the Philippines of “exploration activities.” Sands cited service contracts with private companies that were “prevented from exploration.”

(12) Submission No. 9: Chinese fishing activities within the Philippines’ EEZ, and conflicting claims within China’s EEZ. Reichler testified that under the 9-dash line, China has deprived the Philippines of “fishing activities.” Sands testified that the “fishing ban mandated by China’s Ministry of Agriculture” covered the Philippines’ EEZ.

(13) Submission No. 12: China’s activities on Mischief Reef and their effects on the marine environment, its features’ classification, and the exclusion on “military activities” (Art. 298(b)). Sands testified that China’s construction activities did not give rise to “additional entitlements.” Similarly, Counsel Lawrence H. Martin testified that rocks do not give rise to maritime entitlements “despite China’s building structures over them.” (L.H. Martin, Foley Hoag LLP, Washington, DC)

(14) Submission No. 14: China’s activities in Second Thomas Shoal, its features’ classification, and the exclusion on “military activities.” Oxman testified that China “blocked… a resupply mission” to Marines.

Part 5. Concerns on China’s Compliance.

Reichler observes: “In 95% or more of cases decided by the International Court of Justice, the International Tribunal for the Law of the Sea, or arbitral tribunals that have been convened for inter-State dispute” the States that are ‘the losing party’ comply. He explains that “there is a heavy price to pay for a State that defies … a judgment of an arbitral tribunal that is … recognized in the international community as legitimate, as fair, as correct, as appropriate. There is a price to be paid for branding yourself as an international outlaw, as a State that does not respect, that does not comply with international law. ” (Reichler, A UNCLOS discussion)

My reflections

First, while we should be open, post-arbitration, to negotiations with China, we should also be prepared to walk away from the bargaining table. Reaching agreement does not always confer an advantage. Recall China’s shrewd attempt to use existing “bilateral statements” to prevent the Philippines from resorting to UNCLOS. Also, at times, no deal is better than a seriously flawed deal.

Second, we should negotiate from a position of strength. Apropos is Reichler’s comment on “soft power.” The “State’s ability to defend its action as legal in the international community” enables that State to “influence” others.

Third, I would advise that any agreement with China expressly provide: “We fully reserve all our rights and remedies under international law, including UNCLOS” (or words to similar effect).

Fourth, it would be prudent to consolidate the gains we derive from a favorable Award. This would include strengthening our alliances, coalitions or partnerships (including commercial, economic and military ones), especially with ASEAN. Let us continue to think globally and strategically. It serves our national interests to maintain a balance between “alliances” and “self-reliance.” We should beef up our defense resources and capabilities, including monitoring and intelligence-gathering. Even if all these efforts should not prove sufficient, in relative terms, to match China’s, they might at least give reason for pause to any aggression.

Fifth, negotiations presuppose good faith. For China to insist on negotiations while it continues expanding on its disputed actions belies good faith.

Sixth, due diligence entails ascertaining what China could concede; otherwise negotiations would be rudderless.

Seventh, Submission No. 15, a plea for China to “desist,” may turn out to be an “acid test.” We should anticipate that China might persist in its behavior. Hence, we should explore further recourse before the UN. Our UNCLOS Award might give China pause before exercising her veto powers in the Security Council. “Ubi jus, ibi remedium.” (Where there is a right, there is a remedy.)

Overall, a favorable Award would: (i) lend legitimacy; (ii) provide leverage; (iii) impart gravitas to our standing as a law-abiding nation; (iv) assign primacy to upholding the “Law of the Seas;” (v) accord a leadership role in strengthening UNCLOS; (vi) embolden others to embark on a similar legal voyage; and (vii) leave a legacy of hope in safeguarding our fishermen’s livelihood and our children’s children’s enjoyment of West Philippine Sea’s bountiful and teeming treasures.

Sailing in the West Philippine Sea might prove rocky and turbulent, darkened by realpolitik. But our voyage would be steadied by a favorable UNCLOS Award. It would serve as a star “to steer us by.” May a new dawn break forth with it, as a shining beacon of hope!

Ramon A.P. Paterno is a retired Senior Counsel of the International Finance Corporation, a private sector affiliate of the World Bank Group. LL.M.’75, Harvard Law School; LL.B.‘70, College of Law, UP Diliman; A.B. History ’66 (First honors and Departmental awardee), Ateneo de Manila. He writes from Washington, DC and can be reached at