By: The Permanent Court of Arbitration
The Hague, The Netherlands
www.pca-cpa.org
Third of four parts
3.The Tribunal’s Decisions on the Scope of its Jurisdiction
The Tribunal has addressed the scope of its jurisdiction to consider the Philippines’ claims both in its Award on Jurisdiction, to the extent that issues of jurisdiction could be decided as a preliminary matter, and in its Award of 12 July 2016, to the extent that issues of jurisdiction were intertwined with the merits of the Philippines’ claims. The Tribunal’s Award of 12 July 2016 also incorporates and reaffirms the decisions on jurisdiction taken in the Award on Jurisdiction.
For completeness, the Tribunal’s decisions on jurisdiction in both awards are summarized here together.
a. Preliminary Matters
In its Award on Jurisdiction, the Tribunal considered a number of preliminary matters with respect to its jurisdiction. The Tribunal noted that both the Philippines and China are parties to the Convention and that the Convention does not permit a State to except itself generally from the mechanism for the resolution of disputes set out in the Convention. The Tribunal held that China’s non-participation does not deprive the Tribunal of jurisdiction and that the Tribunal had been properly constituted pursuant to the provisions of Annex VII to the Convention, which include a procedure to form a tribunal even in the absence of one party.
Finally, the Tribunal rejected an argument set out in China’s Position Paper and held that the mere act of unilaterally initiating an arbitration cannot constitute an abuse of the Convention.
b. Existence of a Dispute Concerning Interpretation and Application of the Convention
In its Award on Jurisdiction, the Tribunal considered whether the Parties’ disputes concerned the interpretation or application of the Convention, which is a requirement for resort to the dispute settlement mechanisms of the Convention.
The Tribunal rejected the argument set out in China’s Position Paper that the Parties’ dispute is actually about territorial sovereignty and therefore not a matter concerning the Convention. The Tribunal accepted that there is a dispute between the Parties concerning sovereignty over islands in the South China Sea, but held that the matters submitted to arbitration by the Philippines do not concern sovereignty. The Tribunal considered that it would not need to implicitly decide sovereignty to address the Philippines’ Submissions and that doing so would not advance the sovereignty claims of either Party to islands in the South China Sea.
The Tribunal also rejected the argument set out in China’s Position Paper that the Parties’ dispute is actually about maritime boundary delimitation and therefore excluded from dispute settlement by Article 298 of the Convention and a declaration that China made on 25 August 2006 pursuant to that Article. The Tribunal noted that a dispute concerning whether a State has an entitlement to a maritime zone is a distinct matter from the delimitation of maritime zones in an area in which they overlap. The Tribunal noted that entitlements, together with a wide variety of other issues, are commonly considered in a boundary delimitation, but can also arise in other contexts. The Tribunal held that it does not follow that a dispute over each of these issues is necessarily a dispute over boundary delimitation.
Finally, the Tribunal held that each of the Philippines’ Submissions reflected a dispute concerning the Convention. In doing so, the Tribunal emphasized (a) that a dispute concerning the interaction between the Convention and other rights (including any Chinese “historic rights”) is a dispute concerning the Convention and (b) that where China has not clearly stated its position, the existence of a dispute may be inferred from the conduct of a State or from silence and is a matter to be determined objectively.
c. Involvement of Indispensable Third-Parties
In its Award on Jurisdiction, the Tribunal considered whether the absence from this arbitration of other States that have made claims to the islands of the South China Sea would be a bar to the Tribunal’s jurisdiction. The Tribunal noted that the rights of other States would not form “the very subject-matter of the decision,” the standard for a third-party to be indispensable. The Tribunal further noted that in December 2014, Viet Nam had submitted a statement to the Tribunal, in which Viet Nam asserted that it has “no doubt that the Tribunal has jurisdiction in these proceedings.” The Tribunal also noted that Viet Nam, Malaysia, and Indonesia had attended the hearing on jurisdiction as observers, without any State raising the argument that its participation was indispensable.
In its Award of 12 July 2016, the Tribunal noted that it had received a communication from Malaysia on 23 June 2016, recalling Malaysia’s claims in the South China Sea. The Tribunal compared its decisions on the merits of the Philippines’ Submissions with the rights claimed by Malaysia and reaffirmed its decision that Malaysia is not an indispensable party and that Malaysia’s interests in the South China Sea do not prevent the Tribunal from addressing the Philippines’ Submissions.
d. Preconditions to Jurisdiction
In its Award on Jurisdiction, the Tribunal considered the applicability of Articles 281 and 282 of the Convention, which may prevent a State from making use of the mechanisms under the Convention if they have already agreed to another means of dispute resolution.
The Tribunal rejected the argument set out in China’s Position Paper that the 2002 China–ASEAN Declaration on the Conduct of Parties in the South China Sea prevented the Philippines from initiating arbitration. The Tribunal held that the Declaration is a political agreement and not legally binding, does not provide a mechanism for binding settlement, does not exclude other means of dispute settlement, and therefore does not restrict the Tribunal’s jurisdiction under Articles 281 or 282. The Tribunal also considered the Treaty of Amity and Cooperation in Southeast Asia, and the Convention on Biological Diversity, and a series of joint statements issued by the Philippines and China referring to the resolution of disputes through negotiations and concluded that none of these instruments constitute an agreement that would prevent the Philippines from bringing its claims to arbitration.
The Tribunal further held that the Parties had exchanged views regarding the settlement of their disputes, as required by Article 283 of the Convention, before the Philippines initiated the arbitration. The Tribunal concluded that this requirement was met in the record of diplomatic communications between the Philippines and China, in which the Philippines expressed a clear preference for multilateral negotiations involving the other States surrounding the South China Sea, while China insisted that only bilateral talks could be considered.
Exceptions and Limitations to Jurisdiction
In its Award of 12 July 2016, the Tribunal considered whether the Philippines’ Submissions concerning Chinese historic rights and the ‘nine-dash line’ were affected by the exception from jurisdiction for disputes “historic title” in Article 298 of the Convention. The Tribunal reviewed the meaning of “historic title” in the law of the sea and held that this refers to claims of historic sovereignty over bays and other near-shore waters. Reviewing China’s claims and conduct in the South China Sea, the Tribunal concluded that China claims historic rights to resources within the ‘nine-dash line’, but does not claim historic title over the waters of the South China Sea. Accordingly, the Tribunal concluded that it had jurisdiction to consider the Philippines’ claims concerning historic rights and, as between the Philippines and China, the ‘nine-dash line’.
In its Award of 12 July 2016, the Tribunal also considered whether the Philippines’ Submissions were affected by the exception from jurisdiction in Article 298 for disputes concerning sea boundary delimitation.
The Tribunal had already found in its Award on Jurisdiction that the Philippines’ Submissions do not concern boundary delimitation as such, but noted that several of the Philippines’ Submissions were dependent on certain areas forming part of the Philippines’ exclusive economic zone. The Tribunal held that it could only address such submissions if there was no possibility that China could have an entitlement to an exclusive economic zone overlapping that of the Philippines and deferred a final decision on its jurisdiction.
In its Award of 12 July 2016, the Tribunal reviewed evidence about the reefs and islands claimed by China in the South China Sea and concluded that none is capable of generating an entitlement to an exclusive economic zone. Because China has no possible entitlement to an exclusive economic zone overlapping that of the Philippines in the Spratly Islands, the Tribunal held that the Philippines’ submissions were not dependent on a prior delimitation of a boundary.
In its Award of 12 July 2016, the Tribunal also considered whether the Philippines’ Submissions were affected by the exception from jurisdiction in Article 298 for disputes concerning law enforcement activities in the exclusive economic zone. The Tribunal recalled that the exception in Article 298 would apply only if the Philippines’ Submissions related to law enforcement activities in China’s exclusive economic zone.
Because, however, the Philippines’ Submissions related to events in the Philippines’ own exclusive economic zone or in the territorial sea, the Tribunal concluded that Article 298 did not pose an obstacle to its jurisdiction.
Lastly, in its Award of 12 July 2016, the Tribunal considered whether the Philippines’ submissions were affected by the exception from jurisdiction in Article 298 for disputes concerning military activities. The Tribunal considered that the stand-off between Philippine marines on Second Thomas Shoal and Chinese naval and law enforcement vessels constituted military activities and concluded that it lacked jurisdiction over the Philippines’ Submission No. 14(a)-(c). The Tribunal also considered whether China’s land reclamation and construction of artificial islands at seven features in the Spratly Islands constituted military activities, but noted that China had repeatedly emphasized the non-military nature of its actions and had at the highest level that it would not militarize its presence in the Spratlys. The Tribunal decided that it would not deem activities to be military in nature when China itself had repeatedly affirmed the opposite. Accordingly, the Tribunal concluded that Article 298 did not pose an obstacle to its jurisdiction.
-to be continued-