INTERNATIONAL LAW IN CHINA AS APPLIED IN

CHINA

THE PH-CHINA DISPUTE IN THE SOUTH CHINA

SEA AND ITS FUTURE POSSIBILITIES

Name: LIPANA, Diane Shayne D.

Student Number: 1501215127
Telephone: 13240908344

2016 年 5 月 20
 The PH-China Dispute in the South China Sea and its Future Possibilities

-Diane Shayne D. Lipana

(LLM Program in Chinese Law, 2016)

Abstract

This paper endeavors to present briefly and concisely the controversial South China Sea
maritime dispute between China and the Philippines beginning with the historical antecedents and
the past negotiations, which preceded the arbitration case filed by the Republic of the Philippines
on 30 March 2014 before the Permanent Court of Arbitration as regards the “maritime jurisdiction”
within the South China Sea.
Part I will cover the historical context and the significance of the South China Sea,
especially for China and the Philippines. Part II will focus on the history of the maritime dispute and
the antecedents prior to the filing of the arbitration case. Part III will discuss the salient points of the
Award on Jurisdiction and Admissibility by the Permanent Court of Arbitration last 29 October
2015. With the decision and final arbitral award poised to be rendered in the coming weeks, it
would be a timely exercise to reflect on the possible implications and to the events that may follow
should the court render a decision favoring the submissions of the Philippines. Part IV of this paper
will explore the possible outcomes and the implications of such arbitral award to the parties, to third
parties who may have interest in the outcome of the case, and to the international community in
general. Taking all the precedents and possible result of the award together, this paper will discuss
what future steps can be made to effectively resolve this issue given that China has not
participated in the entire proceedings and that enforcement of this arbitral award will be another
plausible future issue. Finally, Part V will close this paper with a brief conclusion and some
questions and thoughts to ponder on. Overall, the author is of the opinion that academically, the
filing of this arbitration case will be monumental for the Philippines and for the rest of the world, but
it remains to be seen if this action will actually yield pragmatic and meaningful results.

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 Table of Contents
I. Geographical Context and the Significance of the South China Sea .......................................... 4
A. Geography of the South China Sea ....................................................................................... 4
B. Significance of the South China Sea ..................................................................................... 4
II. History of the Dispute ................................................................................................................. 6
A. Philippines Maritime Legislation and Claims ......................................................................... 6
B. China’s Maritime Legislation and Claims ............................................................................... 8
C. Bilateral and Multilateral Negotiations ................................................................................. 10
D. Commencement of the Arbitration ....................................................................................... 13
i. Summary of the Philippine Submissions and Position ...................................................... 14
ii. China’s Position Paper in December 2014 ...................................................................... 16
iii. Where the Clash Lies ...................................................................................................... 17
III. Salient Points of the Arbitral Award on Jurisdiction and Admissibility of the Permanent Court
of Arbitration (PCA) .......................................................................................................................... 25
A. General Findings of the PCA on Jurisdictional Issues ......................................................... 25
B. Philippine Submissions within the Jurisdiction of the PCA ................................................. 25
C. Philippine Submissions requiring Consideration of the Merits ............................................. 27
D. Submission requiring Clarification ....................................................................................... 29
IV. Possible Outcomes and Implications of the Final Arbitral Award of the PCA ......................... 29
A. Enforcement of the Award of the PCA ................................................................................. 29
B. Impact of PCA Award to Negotiations for Cooperation ........................................................ 30
V. Analysis/Conclusion/ Recommendation ................................................................................... 32
VI. References .............................................................................................................................. 33

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 I. Geographical Context and the Significance of the South China Sea

A. Geography of the South China Sea

Encompassing nearly 3.5 million square kilometers, the South China is abutted by the
coast of seven States – China, Philippines, Malaysia, Brunei, Indonesia, Thailand, and Vietnam. 1
There are hundreds of tiny islets, rocks, and reefs located in the South China Sea, and these fall
into five distinct groups 2 - the Pratas Islands, the Paracel Islands, Macclessfield Bank, the
Scarborough Shoal and the Spratly Islands, which is its largest marine features.
In the ongoing arbitration case between the Philippines and the People’s Republic of China
(PRC), the Philippines does not seek any decision from the Tribunal as to the sovereignty over any
of these features.3 Rather, the Philippines seeks a determination under Article 134 and 1215 of the
United Nations Convention on the Law of the Seas (UNCLOS) of the nature and maritime
entitlements of the nine features occupied or controlled by the PRC, namely the Scarborough
Shoal, Mischief Reef, Second Thomas Shoal, McKennan Reef, Gaven Reef, Subi Reef, Cuarteron
Reef, and Fiery Cross Reef.

B. Significance of the South China Sea

Given its magnitude, features, and strategic geographical location, the South China Sea is
relevant not only as a maritime route, but also a rich source of marine resources. It is the shortest

1 Memorial of the RP, 17.

2 Id, 18.
3 Id, 20.
4 Article 13 Low-tide elevations

1. A low-tide elevation is a naturally formed area of land which is surrounded by and above water at low tide but
submerged at high tide. Where a low-tide elevation is situated wholly or partly at a distance not exceeding the breadth
of the territorial sea from the mainland or an island, the low-water line on that elevation may be used as the baseline
for measuring the breadth of the territorial sea.
2. Where a low-tide elevation is wholly situated at a distance exceeding the breadth of the territorial sea from the
mainland or an island, it has no territorial sea of its own.
5 Article 121 Regime of islands

1. An island is a naturally formed area of land, surrounded by water, which is above water at high tide.
2. Except as provided for in paragraph 3, the territorial sea, the contiguous zone, the exclusive economic zone and the
continental shelf of an island are determined in accordance with the provisions of this Convention applicable to other
land territory.
3. Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone
or continental shelf.

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route between the Indian Ocean and Northeast Asia; 6 majority of the world’s oil tanker and
merchant ships passes through it annually; it serves as a quarter of the world’s trade, including
70% of Japan’s energy needs and 65% of Chinas.7 At the same time, the South China Sea is
described as the most important and abundant commercial fisheries in the world. Other than being
a rich food marine food source, it is also touted as the “rainforest of the sea” and as the “global
center of maritime shallow-water tropical diversity” as it carries about 7% of the world’s coral reefs
and home to a rich marine biodiversity, where the reefs serves as means to dissipating wave
energy, spawning, nursery, breeding, and feeding areas for many different marine creatures, and
serving as the ocean’s nitrogen fixers and carbon dioxide sinks. For these features, it is no wonder
that coastal states abutting the South China Sea are motivated to keep their stakes and interest in
this rich marine resource.
Over the course of ancient history, the South China Sea being strategically located
between the rich markets of India and China, it is said to have served as a vital navigational route
for the diverse peoples of Southeast Asia.8 It was used extensively used by the Malay people who
have settled in and occupied the lands that today constitute Malaysia, Indonesia, Brunei, and
Philippines.9 The people of Funan, who settled in present day Vietnam, Cambodia, Thailand and
Myanmar, and Cham people (settlers of the Southeastern coast of Vietnam) were also recorded to
have used the South China Sea as a trade route.10 This went on as early as the first century.
Like the other littoral states, China was also an active participant in the pre-modern used of
the South China Sea, including in trade.11 Given its wealth of resources, Chinese astronomers
were even able to survey the northern part of the Sea as early as 1279. More voyages in the South
China Sea followed in the 1400s, and under the Qing Dynasty (17th century) China carved out its
map, which then extended until Hainan Island.12
The colonial era and the war came. Power and authority passed on to the colonizers and
imperialist, but utility of the South China Sea by these coastal states never really waned. Fast-
forward to the post-war period, Japan, who during the World War II had territorial claims in the

6 Memorial of the Republic of the Philippines (RP), 21.

7 Id.
8 Id, 23.
9 Id.
10 Id, 24.
11 Id, 25.
12 Id.

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South China Sea (particularly the Spratly Islands and Paracel Islands), renounced its claims by
virtue of the Treaty of San Francisco in 1951, which formally concluded the war in the Pacific.13 At
this point, it was uncertain if Japan renounced its claim in favor China.14
In 1946, President Quirino of the Philippines issued a press conference expressly laying
claim to the island group west of Palawan (Spratly).15 In the same year, Republic of China (ROC)
sent naval ships to Pratas, Paracel and Spratlys to take control of these islands after the surrender
of Japan. In 1 December 1947, the then ROC published the Map of the South China Sea with a U-
shaped eleven-dash line. It was later on reduced to a nine-dash line, removing the Gulf of Tonkin,
at the order of then Chinese Premiere Zhou Enlai of the Communist Party of China. Vietnam also
reasserted its sovereignty over some of the features of the Paracels and Spratlys in 1956, while
Malaysia claimed a number of features in the Spratlys in 1979.16
Despite these competing claims, after World War II, these coastal states just resumed their
navigation, fishing, and commercial activities in the South China Sea. By the1970s, in addition to
fishing, oil and gas explorations in the seabed of the South China Sea also began to be
encouraged.17 Although maritime issues would ensue in the next couple of decades, coastal states
abutting the South China Sea were more receptive to exploring cooperation and negotiation, rather
than formally submitting these issues before an international tribunal, but come 2013,
circumstances have changed, and the Philippines decided to initiate an arbitration case pursuant to
Annex VII of the 1982 United Nations Convention of the Law of the Seas (UNLCOS).

II. History of the Dispute

A. Philippines Maritime Legislation and Claims

The Philippines made its first continental shelf claim in 1949 pursuant to Republic Act. No.
387.18 At this time, the Philippines just gained independence from the United States. Come 1961,
Republic Act No. 304619 was enacted; the law pronounced a claim over the Philippine territorial sea
and defined its baselines. Under this law, the straight baselines joining the outermost points of the

13 Id, 33.
14 Id.
15 Id.
16 Id, 34.
17 Id.
18 Id, 37.
19 An Act to Define the Baselines of the Territorial Sea of the Philippines.

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archipelago was used by the Philippines to draw its territory and define that all waters between the
islands up to and within the baseline as internal waters. The magnitude of the claim was also quite
large because the Philippines made reference to its territorial sea as “all the waters beyond the
outermost islands of the archipelago but within the limits of the boundaries set forth in 1898 Treaty
of Paris, the 1900 Treat of Washington, and 1930 Treaty between the United States and the United
Kingdom.” 20 Later, when the UNCLOS was opened for signature on 10 December 1982, the
Philippines subsequently submitted its instrument of ratification on 8 May 1984, which included a
declaration echoing its massive claim of its territorial seas as earlier defined by Republic Act No.
3046. Several countries protested this declaration as such claim constituted as a reservation
prohibited by Article 30921 of the UNCLOS. The Philippines did not immediately change its position.
It took decades before domestic legislation was finally harmonized with the provisions of the
UNCLOS. Upon the passage of the Republic Act No. 952222 in 10 March 2009, the Philippines
finally abandoned its excessive maritime claim (territorial sea and internal waters), and began the
conversion of its previous straight baselines into archipelagic baselines in conformity with Article
4623 and 4724 of the UNCLOS. Following the enactment of the 2009 Baselines law, the Philippines’

20 Id, 38.
21 Article 309 Reservations and exceptions
No reservations or exceptions may be made to this Convention unless expressly permitted by other articles of this
Convention.
22 An Act to Amend Certain Provisions of Republic Act No. 3046, as amended By Republic Act No. 5446, To Define the

Archipelagic Baseline of The Philippines and for Other Purposes or the 2009 Baselines Law.
23 Article 46 Use of terms

For the purposes of this Convention: (a) "archipelagic State" means a State constituted wholly by one or more
archipelagos and may include other islands; (b) "archipelago" means a group of islands, including parts of islands,
interconnecting waters and other natural features which are so closely interrelated that such islands, waters and other
natural features form an intrinsic geographical, economic and political entity, or which historically have been regarded
as such.
24 Article 47 Archipelagic baselines

1. An archipelagic State may draw straight archipelagic baselines joining the outermost points of the outermost islands
and drying reefs of the archipelago provided that within such baselines are included the main islands and an area in
which the ratio of the area of the water to the area of the land, including atolls, is between 1 to 1 and 9 to 1.
2. The length of such baselines shall not exceed 100 nautical miles, except that up to 3 per cent of the total number of
baselines enclosing any archipelago may exceed that length, up to a maximum length of 125 nautical miles.
3. The drawing of such baselines shall not depart to any appreciable extent from the general configuration of the
archipelago.
4. Such baselines shall not be drawn to and from low-tide elevations, unless lighthouses or similar installations which
are permanently above sea level have been built on them or where a low-tide elevation is situated wholly or partly at a
distance not exceeding the breadth of the territorial sea from the nearest island.
5. The system of such baselines shall not be applied by an archipelagic State in such a manner as to cut off from the
high seas or the exclusive economic zone the territorial sea of another State.

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archipelagic baselines, including its 200 meter exclusive economic zone (EEZ) measured from
those baselines, have conformed fully with UNCLOS.25 In April 2009, the Philippines proceeded
with a partial submission to the Commission on the Limits of the Continental Shelf (CLCS) pursuant
to UNCLOS Article 76(8), and this submission was in respect of the Benham Rise Region26 to the
east of Luzon. This submission was approved by the CLCS on 12 April 2009 with a
recommendation that the Philippines establish the outer limits of its continental shelf beyond 200M
accordingly. To date, the Philippines has yet to define the limits of its continental shelf to the west
of the archipelago.27

B. China’s Maritime Legislation and Claims

In September 1958, following the Geneva Conference on the Law of the Seas, China
issued a declaration claiming a 12 miles territorial sea measured from its straight baselines from its
mainland, coastal islands, including Hainan, and Taiwan and its surrounding islands, the Penghu
Islands, the Dongsha [Pratas] Islands, and Xisha [Paracel] Islands, the Zhongsha Islands
[Macclesfield Bank], the Nansha [Spratly] Islands, and all other islands belonging to China which
are separated from the mainland. . . by the high seas.28 Note that at this time, China also already
published its map of the South China Sea with a U-shaped nine-dash line. For the Philippines,
when the 1958 declaration was adopted, this line was understood as indicating the limits of a claim
of sovereignty over the insular features within the area, and not a claim to rights over all the waters
within the line. 29 China reaffirmed its 1958 territorial sea claim through the enactment of the
Territorial Sea and Contiguous Zone in 1992. The law defined China’s “territorial land” as “the

6. If a part of the archipelagic waters of an archipelagic State lies between two parts of an immediately adjacent
neighbouring State, existing rights and all other legitimate interests which the latter State has traditionally exercised in
such waters and all rights stipulated by agreement between those States shall continue and be respected.
7. For the purpose of computing the ratio of water to land under paragraph l, land areas may include waters lying within
the fringing reefs of islands and atolls, including that part of a steep-sided oceanic plateau which is enclosed or nearly
enclosed by a chain of limestone islands and drying reefs lying on the perimeter of the plateau.
8. The baselines drawn in accordance with this article shall be shown on charts of a scale or scales adequate for
ascertaining their position. Alternatively, lists of geographical coordinates of points, specifying the geodetic datum, may
be substituted.
9. The archipelagic State shall give due publicity to such charts or lists of geographical coordinates and shall deposit a
copy of each such chart or list with the Secretary-General of the United Nations.
25 Memorial of the RP, 42.
26 Benham Rise is a seismically active undersea region and extinct volcanic ridge located in the Philippine Sea

approximately 250 km (160 mi) east of the northern coastline of Dinapigue, Isabela, Luzon, Philippines.
27 See supra note 25.
28 Id, citing PRC’s Declaration of the Government of the PRC on China’s Territorial Sea (4 September 1958).
29 Memorial of the RP, 43, citing Zhiguo Gao, “The South China Sea: From Conflict to Cooperation?”

8
mainland and its offshore islands, Taiwan and the various affiliated islands including Diaoyu Island,
Penghu Islands, Dongsha Islands, Xisha Islands, Nansha (Spratly) Islands and other islands that
belong to the PRC;” it also reiterated its 12 nautical miles (NM) territorial sea and 12 NM
contiguous zone.30 Come 7 June 1996, China ratified the UNCLOS and issued a declaration
claiming sovereign rights and jurisdiction over an EEZ of 200 NM and the continental shelf.31 In
1998, China passed its Law on the EEZ and the Continental Shelf; this law affirmed its claim and
defined its EEZ and continental shelf. Further, Article 14 of the said law expressly provides that:
“[t]he provision of this Act shall not affect the historical right of the PRC.” For the Philippines, at this
time, the nature and extent of the “historical rights” claimed by China is unclear.32 It was only on 7
May 2009, when China submitted two Note Verbales to the United Nations (UN) Secretary General
in response to the submissions of Malaysia and Vietnam with respect to its respective continental
shelf beyond 200 NM, that it became clear that China is claiming “indisputable sovereignty over the
islands of the South China Sea and the adjacent waters, and enjoys sovereign rights and
jurisdiction over the relevant waters as well as the seabed and subsoil thereof.”33 Along with the
Note Verbales was a map of the South China See depicting its U-shaped nine-dash line, where
now China actively seeks to reinforce its sovereign rights and jurisdiction. Given this claim, the
Philippines asserts now that China’s nine-dash line encroaches into its EEZ and continental shelf
as defined under Article 5634 (Rights, jurisdiction and duties of the coastal State in the exclusive
economic zone) and 7635 (Definition of the continental shelf) of the UNCLOS.

30 Memorial of the RP, 43.

31 Memorial of the RP, 43, citing the PRC, “Chinese Declaration Upon Ratification” (7 June 1996), Multilateral Treaties
Deposited with the Secretary-General.
32 Memorial of the RP, 44,
33 Id, citing the Note Verbale of the Permanent Mission of the PRC to the UN to the Secretary-General of the UN (7

May 2009).
34 Article 56 Rights, jurisdiction and duties of the coastal State in the exclusive economic zone

1. In the exclusive economic zone, the coastal State has: (a) sovereign rights for the purpose of exploring and
exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to
the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and
exploration of the zone, such as the production of energy from the water, currents and winds; (b) jurisdiction as
provided for in the relevant provisions of this Convention with regard to: (i) the establishment and use of artificial
islands, installations and structures; (ii) marine scientific research; (iii) the protection and preservation of the marine
environment; (c) other rights and duties provided for in this Convention.
2. In exercising its rights and performing its duties under this Convention in the exclusive economic zone, the coastal
State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the
provisions of this Convention.
3. The rights set out in this article with respect to the seabed and subsoil shall be exercised in accordance with Part VI.
35 Article 76 Definition of the continental shelf

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 C. Bilateral and Multilateral Negotiations
In the assessment of the Philippines, the maritime dispute between China and the
Philippines involved two phases. During the first phase (1995 to 2009), the focus of the dispute is
the difference between the Parties appreciation of the nature and maritime entitlement of the
marine features of the Scarborough Shoal and the eight features of the Spratly based on the
provisions of UNCLOS. Very close to this issue is the sovereignty claims over the insular features
of these bodies. Nevertheless, during this entire period, the Philippines and China resolved their

1. The continental shelf of a coastal State comprises the seabed and subsoil of the submarine areas that extend
beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental
margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is
measured where the outer edge of the continental margin does not extend up to that distance.
2. The continental shelf of a coastal State shall not extend beyond the limits provided for in paragraphs 4 to 6.
3. The continental margin comprises the submerged prolongation of the land mass of the coastal State, and consists of
the seabed and subsoil of the shelf, the slope and the rise. It does not include the deep ocean floor with its oceanic
ridges or the subsoil thereof.
4. (a) For the purposes of this Convention, the coastal State shall establish the outer edge of the continental margin
wherever the margin extends beyond 200 nautical miles from the baselines from which the breadth of the territorial sea
is measured, by either:
(i) a line delineated in accordance with paragraph 7 by reference to the outermost fixed points at each of which the
thickness of sedimentary rocks is at least 1 per cent of the shortest distance from such point to the foot of the
continental slope; or
(ii) a line delineated in accordance with paragraph 7 by reference to fixed points not more than 60 nautical miles from
the foot of the continental slope.
(b) In the absence of evidence to the contrary, the foot of the continental slope shall be determined as the point of
maximum change in the gradient at its base.
5. The fixed points comprising the line of the outer limits of the continental shelf on the seabed, drawn in accordance
with paragraph 4 (a)(i) and (ii), either shall not exceed 350 nautical miles from the baselines from which the breadth of
the territorial sea is measured or shall not exceed 100 nautical miles from the 2,500 metre isobath, which is a line
connecting the depth of 2,500 metres.
6. Notwithstanding the provisions of paragraph 5, on submarine ridges, the outer limit of the continental shelf shall not
exceed 350 nautical miles from the baselines from which the breadth of the territorial sea is measured. This paragraph
does not apply to submarine elevations that are natural components of the continental margin, such as its plateaux,
rises, caps, banks and spurs.
7. The coastal State shall delineate the outer limits of its continental shelf, where that shelf extends beyond 200
nautical miles from the baselines from which the breadth of the territorial sea is measured, by straight lines not
exceeding 60 nautical miles in length, connecting fixed points, defined by coordinates of latitude and longitude.
8. Information on the limits of the continental shelf beyond 200 nautical miles from the baselines from which the
breadth of the territorial sea is measured shall be submitted by the coastal State to the Commission on the Limits of the
Continental Shelf set up under Annex II on the basis of equitable geographical representation. The Commission shall
make recommendations to coastal States on matters related to the establishment of the outer limits of their continental
shelf. The limits of the shelf established by a coastal State on the basis of these recommendations shall be final and
binding.
9. The coastal State shall deposit with the Secretary-General of the United Nations charts and relevant information,
including geodetic data, permanently describing the outer limits of its continental shelf. The Secretary-General shall
give due publicity thereto.
10. The provisions of this article are without prejudice to the question of delimitation of the continental shelf between
States with opposite or adjacent coasts.

10
maritime dispute primarily by way of bilateral negotiations. Over the course of this period,
whenever maritime issues would arise, the parties would be exchanging notes and/or conducting
bilateral meetings to settle their differences. For example, when the 1998 Law on the EEZ and
Continental Shelf was enacted and the Philippines raised its concern that the enactment of such
law would exacerbate the Parties maritime dispute, China (through Chinese Foreign Minister Tang)
was able to appease the Philippines’ concern when it expressed that the law conforms to the
UNCLOS, particularly to the principles concerning the delimitation of the EEZ and the continental
shelves, and that the Chinese Government is ready to follow the regulations in this regard and
properly settle the issue concerning overlapping claims of maritime jurisdiction through friendly
negotiation and talks.36 In 2004, in a joint press statement, former Philippine President Gloria
Macapagal-Arroyo and Former Chinese President Hu Jintao discussed the existence of the Parties’
maritime disputes, and expressed hope to resolve then in accordance with UNCLOS.37 Numerous
bilateral talks still ensued in the following years, but the Parties’ maritime issues never really got
resolved.
The second stage of the Parties maritime dispute is marked by May 2009, when China
began asserting its maritime claim in the South China Sea on the basis of its “historical rights” to
the water, seabed, and subsoil within the nine-dash line. The Philippines, along with other coastal
states abutting the South China Sea, protested this position as contrary to the UNCLOS.
Succeeding events between China and the Philippines has made the latter confirm that China now
seeks to actively prevent the Philippines from conducting certain activities (i.e. fishing, oil and gas
exploration, and patrolling) within the nine-dash line, to which the Philippines take as an
infringement of its rights within its EEZ and continental shelf pursuant to the UNCLOS. In an April
2011 Note Verbale of the Permanent Mission of the PRC to the UN Secretary-General, China
expressed that under its laws, “Nansha [Spratly] Islands” are fully entitled to territorial sea, EEZ
and continental shelf. In response to this, the Philippines also issued a Note Verbale (from the
Department of Foreign Affairs of the RP to the Embassy of the PRC in Manila) informing China that
its position is that none of the Spratly features are capable of generating entitlement to an EEZ and
a continental shelf because most of them are at best low-tide elevations which have no maritime

36 Memorial of the RP, 50, citing Department of Foreign Affairs of the RP (RP), Record of Proceedings: 10th Philippine-
China Foreign Minisitry Consultations (30 July 1998).
37 Id, citing Government of the RP and Government of the PRC, Joint Press Statement on the State Visit of H.E.

President Gloria Macapagal-Arroyo to the PRC, 1-3 September 2004 (3 September 2004)

11
zones at all. In addition, in another occasion, the Philippines also asserted that China is incorrect in
its claim that the Scarborough Shoal is entitled to more than 12 NM territorial sea.38
Succeeding events – such as the complaint of the DFA-RP Secretary General of the
Commission on Maritime and Ocean Affairs to the Deputy of Chief of Mission of the Chinese
Embassy in Manila in December 2010 that the nine-dash line impinges of the territorial and
maritime zones of the Philippines; China’s protest of the Philippines’ conversion of a Geophysical
Survey and Exploration Contract to a Petroleum Service Contract in the Reed Bank (a feature of
Spratly) in 2010; the 2011 incident between the Chinese Marine Surveillance ships and RP survey
ship where the former prevented the latter from conducting a seismic survey along the Reed Bank;
the 2012 deployment of numerous Chinese vessels in the area surrounding the Scarborough
Shoal; the formal inclusion of the area encompassed by the nine-dash line in China’s Regulations
on Marine Observation and Forecast; when China began imprinting images of the nine-dash line in
the pages of its passports in 2012; incidents of Philippine fishing vessels being actively prevented
from fishing in these disputed areas; the Parties encounter within the vicinity of the Second
Thomas Shoal (a feature of Spratly); and the media confirmation of Major General Zhang
Zhaozhong that China is employing the “cabbage strategy” to successfully take over Second
Thomas Shoal just as China employed it to take over Mischief Reef and Scarborough Shoal –
exacerbated the maritime dispute between parties and has compelled the Philippine to seek for
other measures, beyond bilateral negotiations, to finally settle the matter.
Other than bilateral negotiations, the Philippines has also sought to resolve this maritime
dispute with China through the ASEAN. Back in 1992, at the 25th ASEAN Ministerial Meeting in
Manila, the idea of a code of conduct in the South China Sea governing the ASEAN countries and
China was proposed, but it was only in 2002, after two decades of negotiations, working groups,
plans of actions and drafts, when the ASEAN and China managed to issue a Declaration on the
Conduct of Parties in the South China Sea. The declaration though is not yet the envisioned
binding code of conduct, but an agreement to work toward the establishment of a code of conduct
in the South China Sea. 39 To date, the said goal has not been achieved due to the lack of
consensus on key matters, including the following: the geographical code of conduct, restrictions
on construction on occupied and unoccupied features; military activities in waters adjacent to the

38 Memorial of the RP, 51.

39 Id, 65.

12
Spratly Islands; and the treatment of fishermen found in disputed waters.40 Furthermore, for the
Philippines, this Code of Conduct would be an instrument to promote peace and stability among
the coastal states abutting the South China Sea, but the Code remains to be not a means to
resolve the standing dispute or competing claims of the concerned states. Pursuant to the 2002
ASEAN and China Declaration, territorial and jurisdictional disputes will be resolved by “peaceful
means, without resorting to threat or use of force through friendly consultations and negotiations by
sovereign states directly concerned, in accordance with universally recognized principles of
international law, including the 1982 UN Convention on the Law of the Sea.”41 Following this, the
Philippine interpretation of this statement is that, “in the event ASEAN Member States and China
are unable to resolve their disputes through friendly consultations or negotiations, the Declaration
encourages recourse to UNCLOS, including the dispute resolution procedures available under Part
XV.”42

D. Commencement of the Arbitration

After almost three decades of negotiations, both through bilateral and multilateral means,
the maritime dispute between China and the Philippines still continued. In the earlier years of
friendly negotiations, consensus building and compromises were always at the forefront in both
Parties desire to keep peace and stability in the South China Sea region. With various events of
encounter in the disputed regions of the South China Sea, tension has been escalating between
China and the Philippines. By 2013, the Philippines and China had made little progress in resolving
their disputes over maritime claims and entitlements in the South China Sea.43 The Philippines took
the position that China is infringing upon its maritime rights over its EEZ and continental shelf in the
disputed features of the South China Sea under the UNCLOS, while China has taken the position
that it is merely exercising its historical rights to the waters, seabed, and subsoil within the nine-
dash line. Their differences also include dispute over fishing rights in the waters adjacent to these
disputed features of the South China Sea, which also falls within the 200 NM EEZ of the
Philippines’ coast.44

40 Id, 66.
41 Id, 67.
42 Id.
43 Id.
44 Id.

13
 With positions at a deadlock at negotiating table due to differences in opinion, on 22
January 2013, the Philippines formally initiated the arbitration proceedings under Section 2 of Part
XV of the UNLCOS by transmitting a Note Verbale along with the Notification and Statement of
Claims to the Chinese Ambassador in Manila.45 On 19 February 2013, China rejected and returned
the Notification and Statement of Claims, along with the Note Verbale, with a statement that core of
the dispute is a territorial dispute over some islands and reefs of the Nansha (Spratly) Islands, to
which China claims indisputable sovereignty, and the action initiated by the Philippines
contravenes the 2002 Declaration of the Conduct of the Parties in the South China Sea (2002
Declaration). To date, China has consistently refused to take part in the arbitration proceedings.

i. Summary of the Philippine Submissions and Position

For the Philippines, the issue of the determination of maritime entitlements of the Parties
and territorial sovereignty over these maritime features can be dealt with separately. In the present
arbitration case, the Philippines is submitting the issues concerning only the determination of
maritime entitlements. Further, it is taking the position that the Tribunal can take cognizance of this
issue apart from the sovereignty claims over these maritime features, to which it acknowledge is
beyond the jurisdiction of the Tribunal.
Below is a reproduction of the summary of claims made by the Philippines in its Memorial
dated 30 March 2014 before the Arbitral Tribunal Constituted Under Annex VII to the 1982
UNLCOS:
1. “China’s maritime entitlements in the South China Sea, like those of the Philippines,
may not extend beyond those permitted by UNCLOS;

2. China’s claims to sovereign rights and jurisdiction, and to “historic rights”, with respect
to the maritime areas of the South China Sea encompassed by the so-called “nine-
dash line” are contrary to the Convention and without lawful effect to the extent that
they exceed the geographic and substantive limits of China’s maritime entitlements
under UNCLOS;

3. Scarborough Shoal generates no entitlement to an exclusive economic zone or

continental shelf; - they rocks within the meaning of Article 121 (3) and as such they
do not generate entitlements to an EEZ or a continental shelf

4. Mischief Reef, Second Thomas Shoal and Subi Reef are low-tide elevations that do
not generate entitlement to a territorial sea, exclusive economic zone or continental

45 Id, 68.

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 shelf, and are not features that are capable of appropriation by occupation or
otherwise;

5. Mischief Reef and Second Thomas Shoal are part of the exclusive economic zone and
continental shelf of the Philippines;

6. Gaven Reef and McKennan Reef (including Hughes Reef) are low-tide elevations that
do not generate entitlement to a territorial sea, exclusive economic zone or continental
shelf, but their low-water line may be used to determine the baseline from which the
breadth of the territorial sea of Namyit and Sin Cowe, respectively, is measured;

7. Johnson Reef, Cuarteron Reef and Fiery Cross Reef generate no entitlement to an
exclusive economic zone or continental shelf;

8. China has unlawfully interfered with the enjoyment and exercise of the sovereign rights
of the Philippines with respect to the living and non-living resources of its exclusive
economic zone and continental shelf;

9. China has unlawfully failed to prevent its nationals and vessels from exploiting the
living resources in the exclusive economic zone of the Philippines;

10. China has unlawfully prevented Philippine fishermen from pursuing their livelihoods by
interfering with traditional fishing activities at Scarborough Shoal;

11. China has violated its obligations under the Convention to protect and preserve the
marine environment at Scarborough Shoal and Second Thomas Shoal;

12. China’s occupation of and construction activities on Mischief Reef

a) violate the provisions of the Convention concerning artificial islands,

installations and structures;

b) violate China’s duties to protect and preserve the marine environment under
the Convention; and

c) constitute unlawful acts of attempted appropriation in violation of the

Convention;

13. China has breached its obligations under the Convention by operating its law
enforcement vessels in a dangerous manner causing serious risk of collision to
Philippine vessels navigating in the vicinity of Scarborough Shoal;

14. Since the commencement of this arbitration in January 2013, China has unlawfully
aggravated and extended the dispute by, among other things:

a) interfering with the Philippines’ rights of navigation in the waters at, and
adjacent to, Second Thomas Shoal;

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 b) preventing the rotation and resupply of Philippine personnel stationed at
Second Thomas Shoal; and

c) endangering the health and well-being of Philippine personnel stationed at

Second Thomas Shoal; and

15. China shall desist from further unlawful claims and activities.”46

ii. China’s Position Paper in December 2014

Although China has consistently declared that it will not participate in this arbitration
proceeding, it has published a position paper dated 7 December 2014 about its key positions
regarding the matter. Even if this position paper was not formally submitted by China before the
Tribunal, the latter has given it much consideration and taken the material as the stance to be
taken by China regarding this on-going dispute. To complete the picture of this dispute, below is a
summary of the key points discussed in the Position Paper of the Government of the PRC on the
matter of jurisdiction in the South China Sea arbitration initiated by the RP:

1. “The essence of the subject-matter of the arbitration is the territorial sovereignty over
several maritime features in the South China Sea, which is beyond the scope of the
Convention and does not concern the interpretation or application of the Convention;

2. China and the Philippines have agreed, through bilateral instruments and the
Declaration on the Conduct of Parties in the South China Sea, to settle their relevant
disputes through negotiations. By unilaterally initiating the present arbitration, the
Philippines has breached its obligation under international law;

3. Even assuming, arguendo, that the subject-matter of the arbitration were concerned
with the interpretation or application of the Convention, that subject-matter would
constitute an integral part of maritime delimitation between the two countries, thus
falling within the scope of the declaration filed by China in 2006 in accordance with the
Convention, which excludes, inter alia, disputes concerning maritime delimitation from
compulsory arbitration and other compulsory dispute settlement procedures; and

4. Consequently, the Arbitral Tribunal manifestly has no jurisdiction over the present
arbitration. Based on the foregoing positions and by virtue of the freedom of every
State to choose the means of dispute settlement, China's rejection of and non-
participation in the present arbitration stand on solid ground in international law.”47

46 Memorial of the RP, 271.

47 Position Paper of the Government of the PRC, par. 3.

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 iii. Where the Clash Lies
China’s Focus on Jurisdictional Issues
As can be gleaned upon the positions presented by China, the latter is not delving into the
specific substantive legal issues raised by the Philippines (i.e. definition of the different maritime
features and the maritime rights guaranteed by UNLCOS to the coastal states) as it takes the
position that the Tribunal has no jurisdiction over the matter. The position paper focused only on
the jurisdictional issues of the case and not the merits of the case. This is logical and
understandable given that China takes the position that this matter is in the bigger scheme of
things an issue over territorial sovereignty, which both Parties admit to be beyond the jurisdiction of
the Tribunal. Given so, China likely finds it unnecessary to go into the specific issues as the case
may be disposed-off on the grounds of jurisdiction alone.

Splitting the Issues

In addition, for China, even if some of the subject-matter involves the interpretation and
application of the provisions of the UNLCOS, at the end of the day, the issue involves maritime
delimitations, which it has expressly declared in 2006 to be one of those matters China reserves
not to be dealt with through compulsory arbitration under Section 2 of Part XV of the UNCLOS. To
China, the arbitration case is a ploy used by the Philippines to carve out some issues, which
ultimately relates to maritime delimitation, in the hope that it will create political pressure unto
China to relent and allow the Philippines to enjoy and exploit these maritime features. To some
degree, this perception may have some truth to it. For the Philippines, it is not a surreptitious
scheme or a ruse, because it laid all its cards down. The Philippines admit that the resolution of
this matter is anticipated to facilitate the negotiated settlement of other issues that have not been
submitted to the Tribunal. 48 The Philippines also admits that the issue relates to maritime
delimitation, but the Philippines stresses that it does not challenge the rights of China under the
UNCLOS nor does it seeks the Tribunal to make a maritime delimitation. What the Philippines
wishes the Tribunal to determine are the maritime entitlements of China and the Philippines to
settle the extent both Parties can exercise their respective rights pursuant to the UNCLOS. The
conflict however lies in the predicate laid down by both parties. To China, maritime entitlements

48 Memorial of the RP, 255.

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cannot be settled now as it pre-empts the future maritime delimitation of the South China Sea as
regards the Philippines and China over these disputed areas. Further, China is steadfast in its
position that its nine-dash line is based on historic rights, which cannot be derogated.
However, the Philippines is of the position that under the UNCLOS, historic rights cannot
be used as a basis for China’s claim, and that China impliedly renounced its historic rights or claim
when it ratified the UNCLOS in 1996. In addition, the Philippines raised that “historic rights” have
never been recognized under general international law as regards the exploitation of resources
from the seabed or subsoil. The same goes for fishing rights. The Philippines argues that there is
no basis for exclusive fishing rights beyond the UNCLOS entitlements, and that under the general
principles of international law, historical fishing rights were always non-exclusive.49
Further, the Philippines explained that like the 1958 Convention on the Continental Shelf,
the UNCLOS unambiguously provides in Article 77 that the sovereign rights of the coastal state
with respect to the continental shelf “are exclusive in the sense that if the coastal state does not
explore the continental shelf or exploit its natural resources, no one may undertake these activities
without the express consent of the coastal state”.50 The Philippine reckons that China’s claim of
“sovereign rights” in all areas bounded by the nine-dash line directly contradicts the rules regarding
entitlement to the continental shelf set forth in Articles 76, 77, and 121. 51 By preventing the
Philippines from oil and gas exploration in these disputed areas, it amounts to a violation of Part VI
of the UNCLOS.

2006 Exclusionary Declaration of China

As earlier mentioned, China takes the position that its 2006 exclusionary declaration filed
pursuant to Article 298 of the UNCLOS must be respected. Following this, to China, the unilateral
action of the Philippines to file the present compulsory arbitration case is an attempt to circumvent
China’s 2006 Declaration and an abuse of the dispute settlement procedures of the UNCLOS.52
However, the Philippines is arguing that the optional exceptions under Article 298 are not self-
judging, and that mere invocation of these exceptions does not deprive the Tribunal of its

49 Memorial of the RP, 112, citing the Anglo-Norwegian Fisheries Case, ICJ Fisheries Case (United Kingdom v.
Iceland; Federal Republic of Germany), Tunisia v. Libya, Gulf of Maine Case (Canada v. United States); and Barbados
v. Trinidad and Tobago.
50 Id, 111.
51 Id.
52 Position Paper of the Government of the PRC, par. 70.

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jurisdiction. Following the doctrine of Kompetenz-Kompetenz, the Tribunal has the sole right to
decide on their jurisdiction. Further, the Philippines argues that these exceptions does not apply in
this case, because (1) none of the submissions (based on the Amended Notifications and
Statement of Claims of the Philippines) relates to sea boundary delimitations or those involving
historic bays or titles;53 (2) none of the submissions concerns military activities or law enforcement
activities;54 (3) neither before nor since the Philippines submitted its Notification and Statement of
Claim in January 2013 has the U.N. Security Council exercised the functions assigned to it with
respect to any aspect of this dispute.55 The Philippines concludes that given that none of these
exceptions exist in the submissions made by the Philippines, the Tribunal is not deprived of its
jurisdiction based on the 2006 exclusionary declaration of China.

Begging the Question - Does the Arbitration Case Involve Territorial Dispute?
Territory denotes exclusivity over a defined geographical area. If we simply define
territorial dispute as a disagreement between the possession and control over land between or
among territorial entities, then the present arbitration case is not a territorial dispute since we are
not dealing with land, instead, we are dealing with the maritime features of the South China Sea.
However, the matter is not as simple as that, because in reality the state territory of a coastal state
extends beyond its land. Under the UNCLOS, coastal states are granted, from their territorial
baseline, 12 NM of territorial seas, 24 NM of contiguous zone and 200 NM of EEZ. From common
sense, if coastal states have exclusive maritime rights until its EEZ, shouldn’t we say that the
territory of the coastal state extends until its EEZ? Then, if we apply this logic, since the nine-dash
line encroaches upon the Philippines’ EEZ, then we have situation of a territorial dispute between
China and the Philippines.
To deal with a territorial dispute, or in this case a maritime delimitation, under Articles 74
and 83 of the UNCLOS, maritime delimitation between States with opposite or adjacent coasts

53 Memorial of the RP, 254. Note that in the Memorial, the Philippines explained that based on UN records and
prevailing literature, historic title here refers to a historic title to a bay. Hence, the Philippines is arguing that since the
South China Sea is not bay, it does not fall within the ambit of this exception.
54 But see Submission 13 and 14 of the RP. Plainly reading these provisions may denote that it touches upon law

enforcement activities. However, the Philippines raised that not all law enforcement activities may be excluded by
declaration. The Philippines cited the case of Netherlands v. Russia, where it says that only law enforcement activities
in regard of the exercise of sovereign rights or jurisdiction are excluded from the jurisdiction of the court or tribunal. In
the absence of a maritime delimitation, these activities will not fall within the criteria of law enforcement activities in
regard of the exercise of sovereign rights or jurisdiction.”
55 Memorial of the RP, 269.

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shall be effected by “agreement” on the basis of international law. However, following the decades
of negotiation between the Philippines and China over the disputed features of the South China
Sea, arriving at an “agreement” to a maritime delimitation seems to be going nowhere concrete.
Currently, with a stronger stance from China that these maritime features belongs to China by
historic rights, and it is entitled to exercise dominion over these features to the exclusion of the
Philippines, the latter is seeking another course. Because the Philippines defense, capital, and
technological resources pale in comparison to that of China, the Philippines now seeks refuge from
the remedies made available by international law, the UNCLOS in particular.

Best Recourse Left for the Philippines

To the Philippines, compulsory arbitration under the UNCLOS is the best recourse left to
determine the Parties maritime entitlements, because in the negotiating table, China is imposing
the nine-dash line to be a given. However, if the Philippines accepts this as the prevailing
predicate, then the Philippines loses its maritime rights over most of its EEZ and continental shelf.
To graphically see the magnitude of the nine-dash line and its close proximity to the land territories
of the Philippines, attached are Figures 1, 2 and 3. As shown in Figure 1, the second and third
dashes are only 42 NM and 39 NM away, respectively, from the coast of Luzon. As can be seen in
Figure 2, the fourth and fifth dashes are only 34 NM and 36 NM away, respectively, from Palawan.
Figure 3 gives a bird’s eye view of the EEZ of the Philippines vis-à-vis the nine-dash line. From
these maps, we see that the Philippines will ultimately lose most of its EEZ and continental shelf,
which has been set and guaranteed by the UNCLOS, if it accepts the nine-dash line as a given.
Hence, if China refuses to move on with the negotiations lest the Philippines (and even the
rest of ASEAN) accepts the nine-dash line as a given, China does not give the Philippines much
choice. The Philippines would have to either give up most of its EEZ and continental shelf, or find
other legal means to settle the dispute. In the present case, the Philippines has chosen the more
rational choice, which is the latter.

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