International arbitration in highly political situations: the South China Sea dispute and international law.

• Published date: 22 September 2014
• Author: Boon, Kristen E.
• Date: 22 September 2014

On January 22, 2013, the Philippines formally commenced arbitration proceedings against China over the South China Sea dispute. (1) China has refused to participate, but its rejection of the proceedings should not be interpreted as lack of interest. In fact, quite the opposite is true. Maritime boundary disputes are of key strategic importance to China, and China avidly watches the work of international tribunals, despite maintaining the position that its own boundary disputes should not be resolved through international adjudication. (2)

I can attest to China's interest in the international resolution of maritime disputes personally. Last year I participated in an hour-long interview on Radio China International about the ICJ's 2012 decision on Nicaragua v. Colombia. (3) This case addressed sovereignty over disputed islands in the San Andreas archipelago. For a law professor, it was like an early Christmas present to spend sixty minutes on public international radio discussing an ICJ decision. Moreover I have no doubt the interest in these decisions in China was based on their potential relevance by analogy to the ongoing disputes in the South China and East China seas.

Today, I want to tackle the following question: What is the role of arbitration in highly charged political disputes, particularly when one party refuses to participate? I will comment on three issues: (i) the likely findings on jurisdiction in the South China Sea dispute, (ii) the elements of successful arbitration in highly charged situations, and (iii) why international adjudication is appropriate in a politically sensitive case such as this one.

I. JURISDICTION

The case The Republic of the Philippines v. The People's Republic of China has been filed at the Permanent Court of Arbitration, which is acting as registry. Five tribunal members have been appointed. (4) The Philippines selected one, and one was appointed on China's behalf. All tribunal members are extremely well regarded within the profession.

The Tribunal met in July 2013, issued a procedural order indicating submissions would be due in March 2014. The order also indicated that the admissibility and merits phases will be decided together. On March 1, 2014 the Philippines filed its memorial, while China, as anticipated, has chosen not to participate. At the time of writing, the only document publically available in the case is the Philippines Notification and Statement of Claim. (5)

The Philippines has asked the tribunal a number of questions, including whether:

(i) China's claims based on its "nine dash line" are inconsistent with UNLOS and therefore invalid,

(ii) Certain of the maritime features claimed by both China and the Philippines are islands, low tide elevations or submerged banks, and whether they are capable of generating entitlements to maritime zones greater than 12M under Article 121 of UNCLOS, and

(iii) China has violated the right of navigation of the Philippines, and therefore the rights of the Philippines in regard to the living and non-living resources within its exclusive economic zone and continental shelf.

The first task for the Tribunal is to determine whether or not it has jurisdiction over these claims. Specifically, are the questions put to the tribunal by the Philippines permissible, given China's reservation to UNCLOS for disputes over maritime sovereignty? (6)

As a general matter, UNCLOS requires that parties submit their disputes to dispute resolution. (7) The system establishes a comprehensive dispute resolution mechanism, with various options, arbitration being the default method. (8) However, there is an important exception with regards to subject matter: states are not required to submit questions of maritime sovereignty if they enter the appropriate reservation. (9) This exception was created because states decided these types of disputes can be sensitive, and because there is no consensus between states regarding the substantive rules to be applied to sea boundary delimitations. (10) China has entered such a reservation, and the first thing the Tribunal will have to determine is whether the Philippines request is within its scope.

The Philippines has tried to frame the questions in its Notification and Statement of Claim to suggest that the arguments involve an interpretation of the convention rather than a determination of maritime sovereignty, which would be prohibited. But it is clear that some of the questions back onto questions of maritime sovereignty. In particular, the invitation to the Tribunal to rule on the 9-dash line and the request that the Tribunal rule on the Philippines rights beyond the EEZ clearly raise sovereignty issues."

My impression is that the Philippines recognizes that some of the questions presented to the Tribunal may not be cognizable. Although officially, the Philippines is seeking clarification of its rights, in an off the record conversation with a government official, I was told that they see no harm in asking for the moon, because an answer to any of the questions will be helpful as the Philippines defines its rights. Even a narrow ruling could have benefits: it would offer a legal evaluation by a highly respected tribunal, and it may give some clarity to other states in the region.

The question that is least likely to run afoul of China's reservation, and thus most likely to proceed to arbitration is the second question on whether the maritime features are islands, pursuant to Article 121 of UNCLOS. (12) Because this question involves an interpretation of UNCLOS, which would fall within the Tribunal's jurisdiction and does not need to address Maritime sovereignty, I believe there is a reasonable chance the Tribunal will determine it has jurisdiction over this aspect of the claim. (13)

II. WHEN DOES ARBITRATION WORK IN POLITICALLY CHARGED SITUATIONS?

In my view, there are three conditions for successful arbitration on highly political issues such as cultural issues and boundary disputes:

(i) Consent of the parties,

(ii) The ability of politicians to sell the process of arbitration to their people,

(iii) Arbitral tribunal's ability to tactically manage consent. (14)

Consent is important because the states involved need to make a commitment to submit themselves to a third party. Parties often get to arbitration after negotiations fail, and the leaders want a resolution. However, states must be willing to acknowledge that the arbitral tribunal can change legal entitlements.

The Philippines has arrived at a place where arbitration is viewed as one of the only viable options on the table. China, however, clearly has not reached this point. Moreover, if this case proceeds, it will be the first time that at ITLOS chamber proceeds with one party in absentia. However, in other fields, it is not so unusual. In the investor/state context, for example, Moldova refused to participate in proceedings pursuant to a dispute under a Russian-Moldovan Bilateral Investment Treaty but later went on to enforce an award. (15)

Second, the politicians need to support the arbitration. Success depends on how states relay the arbitration process to the peoples of the country in question. When governments are on board, arbitration can become a way out of a politically sensitive situation. When they are not, however, arbitration can be a means to undermine other processes and potentially even peace agreements. It is too early to say how the Philippines will translate any decision by the Tribunal, but even if a ruling on the islands issue were to come back, for example, in China's favor, the Philippines would have a political out.

Finally, arbitrators need to manage the consent of the parties. One of the advantages of arbitration is that there is flexibility in the system, and parties have more control than they would before national courts. However, parties can walk away during the process, and even when parties agree to participate, they might reject an award. A recent example is Colombia's reaction to the ICJ's Nicaragua v. Colombia Judgement of 2012. (16) Indeed, Colombia withdrew from the Bogota Pact which granted the ICJ jurisdiction soon after the judgment was handed down. (17) Moreover, Nicaragua has now lodged a new case at the ICJ to try to finalize the maritime boundary, before the ICJ's jurisdiction ends. These events illustrate how even after parties consent, and a tribunal determines it has jurisdiction, and that tribunal renders an award that tries to reach an equitable solution for both parties, one side may reject it. Enforcement, therefore, can raise a secondary set of issues altogether.

III. WHAT CAN ARBITRATION DO FOR THE SOUTH CHINA SEA DISPUTE?

Although Philippines is ready, willing and able to proceed, there is little debate that China has no interest in participating. Without the consent and participation of one of the parties, the arbitration process itself is unlikely to resolve the problem. That does not mean, however, that there is no value in the process. The Philippines has keenly demonstrated that it is complying with the spirit of UNCLOS by submitting the case for adjudication. Moreover, there are clear side benefits to the overall resort to international dispute resolution:

* the process might unlock the...