The Catch-22 Ruling: The Hague Tribunal decision on the South China sea dispute

On 12 July 2016, the Permanent Court of Arbitration (PCA) at the Hague finally released its ruling on an arbitration case launched by the Philippines three years ago. In 2013, the Philippines called for the Hague to clarify China’s historical rights in the South China Sea, which overlapped with the Philippines’ claims. Although the ruling may appear favourable to the Philippines, the real implications of the judgement will ultimately depend on the ability of the region to uphold international norms over realpolitik calculations of power.

The judgement released by the PCA asserted the Court’s jurisdiction to rule on China’s historical claims. Based on a nine-dash line that was found on a Chinese map that dates back to the 1940s, China has been claiming nearly 90 percent of the entire South China Sea. The PCA then challenges China’s claims by ruling that China has no historical rights to the South China Sea and no economic rights to access resources in the Spratly islands. The Scarborough Shoal is also declared as a high tide feature, which places the shoal well within the Philippines’ exclusive economic zone (EEZ). This means that Filipino fishermen have a legal basis to access fishing resources in the shoal and China does not.

However, the judgement was also impartial and did not favour any parties in the dispute. In fact, this ruling is likely to be cautiously used by other claimant states in the future if they wish to bring their overlapping claims to the international court as well. The PCA ruled on the nature of the contested features, which have legal implications on the extent to which claimant states can exploit economic resources within the area. For example, if the feature is ruled as a rock, then no country has economic rights to exploit resources in that area(Cf. Christopher Mirasola on what makes an island land reclamation and the south china sea arbitration). This means that claimant states that wish to contest claims with others might risk losing their EEZ rights in the future if the contested feature is determined to be a rock.

Nevertheless, China announced its decision to reject the judgement of the Hague. The Xinhua, which is China’s state-run newspaper, has described the ruling as an “ill-founded award” releaseds by a “law-abusing tribunal” that has no jurisdiction. This brings us to the dilemma that Asia Pacific is now facing. With a tribunal ruling released by the world’s oldest international court but China’s refusal to recognise this judgement, where does the solution to the South China Sea dispute lie?

China’s decision to consider the judgement as null can also be interpreted as China’s rejection of the rules-based regional order pioneered by the United States. The Philippines’ resort to international arbitration stems from its close alliance to the United States and its adherence to liberal-based international norms. However, China rejects a US-led order and prefers to instead settle disputes through bilateral negotiations with weaker claimant states. This also allows China to throw its weight around as the militarily superior country and to expand its clout in Asia Pacific.

It does not help that prior to the release of the ruling, China and the United States were conducting deterrent maneuvers. While China participated in military exercises around the Paracels, that that ended a day before the release of the ruling, the United States deployed destroyers to patrol the China-occupied reefs in the Spratly Islands. In this uncertain moment in time, regional countries have urged for all parties to exercise their utmost restraint. Any accidental military maneuver or misinterpretation of diplomatic statements can further escalate tensions.

However, there might still be hope for continued regional stability. Under the newly-elected President Rodrigo Duterte, the Philippines announced that it respects the ruling of the PCA. The Philippines has also indicated its interest to continue resorting to peaceful resolution mechanisms to solve territorial sea disputes. This may imply that the Philippines would be considering peaceful methods to resolve the dispute, including bilateral negotiations with China. Already, the Philippines has announced its intention to hold discussions with China as soon as possible after the release of the judgement.

Another factor that can alleviate the tense situation is the fact that the Hague does not have the authority to enforce its rulings. There is no absolute power in international law, and therefore no international body has the authority to unilaterally enforce the application of a ruling. The Hague’s lack of authority gives China more leverage to disregard the judgement, with less concern for any punitive measures that it might face. Moreover, although China’s historical rights that were once based on the nine-dash line has now lost some credibility, the Hague’s ruling has not determined China’s sovereignty in the disputed sea as it has only clarified the nature of contested features. For now, these legal loopholes may pacify China, to avoid any sudden military standoffs in the South China Sea.

The Hague’s ruling and the region’s reaction is all but the top layer to a deeper geopolitical tension within the region. The United States stands for multilateral solutions and respect for a rules-based order. On the other hand, China prefers to conduct its foreign policy through bilateral negotiations and economic-driven considerations. In the long run, the future behaviour of Chinese and American foreign policymakers and their military conduct will determine which kind of regional order will persevere. Meanwhile, regional stability and the safe passage of oil, gas and fishing exports along Asia Pacific’s sea lanes of communication (SLOCs) are at stake. With geopolitical competition on the rise as a result of this judgement, the burning question now is how beneficial is international arbitration in bringing about a peaceful solution in the South China Sea?

Dott.ssa Asyura Salleh