Foreign Policy Research Institute A Nation Must Think Before it Acts A Legal Analysis of the Philippine-China Arbitration Ruling

A Legal Analysis of the Philippine-China Arbitration Ruling

Yogi Berra said, “It’s tough to make predictions – especially about the future.” Last week’s ruling in the Philippine-China arbitral tribunal, however, sheds light on the likely outcome of the China-Philippine arbitration case and illuminates an end game to the crisis. In short, the tribunal’s decision to determine the legal entitlements of ten disputed features in the South China Sea significantly weakens China’s hand and benefits the Philippines and the other claimant states. The merits decision will not decide which states ultimately have sovereignty over any of the disputed features, but the tribunal’s decision on the merits likely will recognize that the small reefs and islands at issue are entitled to either no or perhaps very small maritime zones.

Having lost on the issue of maritime zone entitlements at the jurisdictional phase of the arbitration, China is now set to lose on the issue on the merits due to the geologic and geographic facts of the contested features. The natural and physical composition and verticality of the features, and their situational adjacency with large territories (namely, the Philippine islands of Luzon and Palawan), means that the tribunal likely will issue a decision next year that will deeply undermine China’s legal claims and strategic position.

The jurisdictional phase separated those issues that the tribunal will decide during the merits phase from those issues that are shelved. China was able to shield from the tribunal’s scrutiny its most audacious claims. For example, the tribunal did not agree to adjudicate China’s specious historic dashed-line claim or determine sovereignty over any feature in the South China Sea. It avoided jurisdiction over the question of whether Mischief Reef and Second Thomas Shoal are part of the Philippine exclusive economic zone (EEZ) and continental shelf, although I predict that the tribunal actually will make this determination obliquely and tacitly in favor of the Philippines during the merits stage. Even though the decision on the merits will not address sovereignty over the features or the dashed-line claim, it will nonetheless severely undercut China’s position on both issues. How? By so reducing the entitlements generated by these features to no more than a tiny territorial sea, the reefs become remote, isolated outposts surrounded by Philippine EEZ; their value becomes nugatory. This ironic outcome is number seven of the “Nine Ironies of the South China Sea.”

The tribunal also did not accept for determination whether China has unlawfully failed to prevent its nationals and vessels from exploiting Philippine resources, or whether China’s occupation of Mischief Reef violates article 60 of UNCLOS concerning coastal state authority over artificial islands in the EEZ. The tribunal similarly stayed away from military issues, declining to review the efforts by China to disrupt rotation and replenishment of the eight Philippine Marines stationed on the BRP Sierra Madre at Second Thomas Shoal.

Unsurprisingly, the tribunal agreed to consider whether China’s island-construction campaign is inconsistent with…

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