Legal Aspects Of International Trade: Philippines V. China Essay

Question:

Write about the Legal Aspects of International Trade for Philippines v. China.

Answer:

Introduction

The South China Sea Arbitration case or as is fully known as the case of Philippines v. China (PCA case number 2013–19) was a case which was brought against the People’s republic of China by the Republic of the Philippines. This arbitration case was raised under the UNCLOS, i.e., United Nations Convention on the Law of the Sea’s Annex VII with regards to the claims made by the defendant regarding the nine-dotted line and certain other issues in the South China Sea (AMTI, 2016). In 2013, it was declared by China that it would not take part in any arbitration and even published a white paper in 2014 to elaborate upon the taken position. The 15 submissions of the Philippines were taken by the arbitral tribunal as they ruled that they indeed had the jurisdiction over this case. Ultimately, the ruling was given in the favor of Philippines in 2016 (Permanent Court of Arbitration, 2017).

In the following parts, this very case has been discussed to present a conclusive summary of the case.

Factual Background

A complaint was filed in 2013 by Philippines after the control of a reef was taken over by China, which was located just around 140 miles from the coast of Philippine. China had been accused of contravening the international law as they interfered with the fishing, endangered the ships and also failed to safeguard the marine environment located at the reef, which was famous as Scarborough Shoal. Furthermore, it was also asked by the Philippines to reject the claims of China in the international tribunal with regards the Chinese claims of sovereignty over the waters which were located within the nine-dash line, which also appeared on the official Chinese maps (Permanent Court of Arbitration, 2015). These dashes covered around 90% of the South China Sea, which was an area equaling size of Mexico which was crucial for the global trade, as it was rich in natural resources, which included possible deposits of oil. China was also blamed by Philippines for contravening the international law as China dredged sand for building artificial island out of a range of reefs located in the South China Sea, which included one which was in its waters (Perlez, 2016).

Key Issue and Arguments of the Parties

The key issue which has been raised in this case by Philippines is that the nine-dotted line claim made by the Chinese is not valid as it contravenes the UNCLOS agreement with regards to the territorial seas and the exclusive economic zones (Permanent Court of Arbitration, 2017). This was stated for the reasons that the majority of the South China Sea’s features, for instance the majority of Spratly Island, could not sustain life, and so, they could not be given the continental shelf, as has been defined in UNCLOS (Callar, 2013).

On the other hand, Chinese refused to even participate in the arbitration by giving the reasons that a number of treaties of Philippines stipulated that the bilateral negotiations had to be used for resolving the disputes related to the border. Philippines was also accused of having contravened the voluntary declaration made between China and ASEAN in 2002, regarding the Conduct of Parties in the South China Sea, which also contained the for resolving the disputes, the bilateral negotiations had to be adopted (Torode, 2013). In 2014, a position paper had been issued by China which argued that it was not subjected to the arbitration as the same was an issue relating to sovereignty, and not that of misuse of rights (Blanchard, 2015).

Apart from China and Philippines, Taiwan also made a stance even though it was not joined in the arbitration proceedings or even when the opinion of Taiwan was not sought. Vietnam also made a stance in these proceedings and he put forward three points whereby the nation supported the contentions made by Philippines. Vietnam also rejected nine-dashed line claim made by China and it also asked the tribunal to note the claims on islands like Paracels (Pham and Boudreau, 2014). Certain stances were also made by Malaysia, and Indonesia.

Law

As stated earlier, the complaint had been filed by Philippines under the UNCLOS which contains the rules with regards to the use of the oceans of the world. This treaty was formed in the year of 1994 and Philippines and China had ratified this treaty, along with the European Union and 165 other states. As per this treaty, the nation has sovereignty over the water which extends to 12 nautical miles from the nation’s coast and the nation also has a control over the fiscal actions in the water on the continental shelf, along with having control up to two hundred nautical miles from the nation’s coast (Hunt, 2016). This includes the sovereignty over the construction of artificial islands, oil exploration, mining and fishing. This very treaty also presents the detailed rules with regards to the defining of these zones and also the manner in which the matters have to be resolved in case of a dispute by suggesting what has to be done when the zones of two different countries overlap (Permanent Court of Arbitration, 2016).

Philippines had also submitted to the Tribunal regarding it having the required jurisdiction on the basis of UNCLOS’s Articles 297 and 298. It also stated that the nation had the right to settle the dispute in a peaceful manner and that even China owed a relate obligation to not extend or aggravate the dispute till the time a resolution is reached. However, the acts of China were such that they not only extended the dispute but also aggravated the same (Yafei, 2016).

Philippines also cited the decision given by the International Justice in Electricity Company of Sofia and Bulgaria (Belgium v. Bulgaria), Interim Measures of Protection, Order of 5 December 1939, PCIJ Series A/B, No. 79, p. 199 (5 December 1939). Under this, the Justice had recognized the universally accepted principle with regards to the requirement that the parties of a case have to refrain from doing anything which results in the aggravation of disputes. It was also acknowledged by the Philippines that this particular principle had been articulated with regards to the decision pertaining to the provisional measures and the same was commonly invoked in such matters. Another case on which Philippines relied was that of United States Diplomatic and Consular Staff in Tehran (United States v. Iran), Judgment, ICJ Reports 1980. This was further supported by Para 5 of the Declaration on the Conduct of Parties in South China Sea and Friendly Relations Declaration of 1970 of the United Nations General Assembly (Permanent Court of Arbitration, 2016).

Holding

China had claimed that the nine-dash line included the water which was beyond these zones and there was historical evidence, as claimed by Beijing to support this notion. However, these claims were rejected by the tribunal by stating that any and all of the historic rights which the China had, which had been previously enjoyed by the nation, were extinguished due to the applicability of this treaty. Moreover, it was also stated by the Tribunal that even though the navigators and the fishermen of China had used the island in the sea in the past, there was no evidence to suggest that the exclusive authority over the resources or the waters had ever been exercised by Beijing (Lavranos and Kok, 2014).

It was held by the tribunal that the duty from refraining to extend or aggravate a dispute during the time the settlement proceedings were going on, were inherent in the good faith’s central role with regards to the international legal relations which took place between the states. The tribunal also stated that there was no requirement to go outside the transcript of the UNCLOS in order to find the foundation of law which was pertinent over the demeanor of the parties, during the course of procedures related to the dispute settlement as per Part XV of the UNCLOS (Batongbacal, 2016).

Almost all of the contentions which were made in this case by Philippines were unanimously granted by the tribunal and they also laid down a range of major rulings which would reshape the discourse of the South China Sea disputes for the coming years. The first and foremost thing which was characterized by the Tribunal, and later on struck down was about the most liberal of the contentions with regards to the South China Sea, with regards to the historic rights of China as has been represented through the nine-dash line map. It was held clearly by the tribunal that any and all of the historic rights assertions with regards to the waters which was outside the territorial sea were deserted, as well as, relinquished by China when it signed, as well as, ratified the UNCLOS and hence had agreed with the EEZ (exclusive economic zone) establishment and the continental shelf regimes with regards to the favor of all of the coastal states (Batongbacal, 2016).

Secondly, all the features in Scarborough Shoal and Spratly Islands region were comprehensively characterized by the tribunal. The rocks and the islands formed the pockets of the territorial sovereignty which was disputed. However, the sea surrounding these could be allocated in a jurisdictional manner as per the UNCLOS to the neighboring costal states (Batongbacal, 2016).

It was also held by the Tribunal that the interference of China with the petroleum exploration activities, the Filipino fishing, and the assembly of artificial islands which failed to thwart the fishermen of China from fishing in the EEZ of the Philippines, all contravened the sovereign rights of Philippines over the EEZ, along with the continental shelf. It was also determined by the tribunal that the construction of the seven artificial islands by the China, along with the failure in preventing the fishermen from being engaged in the destructive fishing practices, contravened the obligation of the China with regards to the safety and conservation of the marine environment (Batongbacal, 2016).

It was also found by the tribunal that the creation of these artificial islands contravened the obligations of China for refraining from taking the actions which caused irreparable and permanent harm to the marine environment and that it had acted in a manner which was prejudicially against the rights which Philippines had. Due to these reasons, China acted in a way which was divergent to the global law as it only aggravated the dispute. The arbitration award which was given in this case was, on the basis of the UNCLOS was both final and binding and this was published by the Permanent Court of Arbitration (Lisle and Goldstein, 2017).

Analysis and Conclusion

This was considered as a landmark decision in the recent history and was even declared as an overwhelming victory for Philippines. Even though this was a landmark ruling, after the decision was given the People’s Republic of China refused to accept this ruling. They issued a statement which rejected the ruling as being null and decided that it would ignore the ruling, i.e., it stated it would not to follow the decision given by the arbitral tribunal (Phillips, Holmes and Bowcott, 2016).

This award not only had major implications but it also sent ripple across the Southeast Asian region, along with the rest of Asia-Pacific region. This award also closed the door for the claims of China with regards to the excessive maritime jurisdictions in the South China Sea on the basis of historic rights. The justification with regards to the rights of Philippines to its continental shelf and EEZ out of the disputed enclaves entails that outside the enclave of rocks or island and mainland costs, the South China Sea was open to either the common international uses or to the costal state exclusive resource rights (Batongbacal, 2016).

It is natural that the small littoral states within the South China Sea gain from the EEZ’s legal reinforcement and also from the continental shelf entitlements which extends from the mainland coasts. And in case China now insists upon the enforcement of the same, it would be illegal as per the international law and this would make the coastal states eligible for making a legal or such related actions for defending their jurisdiction and their rights (Batongbacal, 2016).

References

AMTI. (2016) Arbitration on the South China Sea: Rulings from The Hague. [Online] AMTI. Available from: [Accessed on: 31/05/17]

Batongbacal, J. (2016) Philippines vs. China in the South China Sea: Beijing at a Geopolitical Crossroads. [Online] The National Interest. Available from: [Accessed on: 31/05/17]

Blanchard, B. (2015) China says U.S. trying to influence Philippines' sea case. [Online] Reuters. Available from: [Accessed on: 31/05/17]

Callar, M.D. (2013) ITLOS completes five-man tribunal that will hear PHL case vs. China. [Online] GMA Network. Available from: [Accessed on: 31/05/17]

Hunt, K. (2016) Philippines vs. China: Court to rule on South China Sea fight. [Online] CNN. Available from: [Accessed on: 31/05/17]

Lavranos, N., and Kok, R.A. (2014) Hague Yearbook of International Law / Annuaire de La Haye de Droit International. Boston: Brill Nijhoff.

Lisle, J., and Goldstein, A. (2017) China's Global Engagement: Cooperation, Competition, and Influence in the 21st Century. Washington DC: Brookings Institution Press.

Ma, Y. (2014) Chinese (Taiwan) Yearbook of International Law and Affairs. Boston: Brill Nijhoff.

Perlez, J. (2016) Philippines v. China: Q. and A. on South China Sea Case. [Online] The New York Times. Available from: [Accessed on: 31/05/17]

Permanent Court of Arbitration. (2015) Arbitration between the Republic of the Philippines. [Online] Permanent Court of Arbitration. Available from: [Accessed on: 31/05/17]

Permanent Court of Arbitration. (2016) PCA Case N? 2013-19. [Online] Permanent Court of Arbitration. Available from: [Accessed on: 31/05/17]

Permanent Court of Arbitration. (2017) The South China Sea Arbitration (The Republic of Philippines v. The People's Republic of China). [Online] Permanent Court of Arbitration. Available from: [Accessed on: 31/05/17]

Pham, D.N., and Boudreau, J. (2014) South China Sea Tensions Flare as Vietnam Files Stance to Court. [Online] Bloomberg. Available from: [Accessed on: 31/05/17]

Phillips, T., Holmes, O., and Bowcott, O. (2016) Beijing rejects tribunal's ruling in South China Sea case. [Online] The Guardian. Available from: [Accessed on: 31/05/17]

Torode, G. (2013) Philippines South China Sea legal case against China gathers pace. [Online] Reuters. Available from: [Accessed on: 31/05/17]

Yafei, H. (2016) The Truth Behind the Philippines’ Case on the South China Sea. [Online] Huffington Post. Available from: [Accessed on: 31/05/17]

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