Goodbye UNCLOS Dispute Settlement? China Walks Away from UNCLOS Arbitration with the Philippines

Breaking news:  China has rejected arbitration under Annex VII of the UN Convention on the Law of the Sea with the Philippines, dealing a heavy blow to the future of dispute settlement under UNCLOS (h/t China Law Prof Blog).  According to this China Daily report,

“Chinese Ambassador to the Philippines Ma Keqing had an appointment with officials from the Philippines’ Foreign Ministry on Tuesday and returned a note and related notice after expressing China’s rejection,” spokesman Hong Lei said at a daily press briefing.

“The note and related notice not only violate the consensus enshrined in the Declaration on the Conduct of Parties in the South China Sea (DOC), but are also factually flawed and contain false accusations,” Hong said.

As I have noted here (and as Prof. Clarke notes as well), the Philippines is now within its rights to ask the President of the International Tribunal for the Law of the Sea to appoint all four remaining arbitrators for the Annex VII tribunal.  Once the President of ITLOS has done so, the duly constituted arbitral tribunal may act even without China’s participation.

Upon reflection, I am not really surprised China has decided to walk away from the Annex VII tribunal.  As I noted earlier, such tribunals have tended to combine their considerations of jurisdiction with those of the merits.  They have not generally bifurcated their proceedings, nor do they seem to have any obligation to do so.

This is a problem for China because while their jurisdictional challenge is pretty strong, their argument on the merits is undeveloped and fuzzy.  They have never exactly spelled out what they mean by having “indisputable sovereignty” over the South China Sea.   Do they mean it is a territorial sea? Or that they have general economic rights similar to an Exclusive Economic Zone?

So I am not shocked that China is walking away here. The question for the Philipppines is: what next? Do they continue with the Annex VII arbitration without China? Well, their DFA seems ready to move forward without China.  But would any award issued by this tribunal be pretty meaningless?

I’m not sure. I think that any award there would have little impact on China, but it should be useful in helping rally allies in Southeast Asia, especially within ASEAN.  It is not going to stop China much, but an award that undermines the legality of China’s claims is certainly better to have than not to have. But it is not nearly as much as it would have been if China had played ball (and lost).

China’s statement contains a curious and hard to understand argument.  According to the Chinese foreign ministry, the Philippines arbitration claim “complicates” resolution of conflicts in the South China Sea in violation of the Declaration on Parties’ Conduct in the South China Sea.    Presumably, China is referring to Article 5 of the Declaration:

5. The Parties undertake to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner.

Does making an arbitration claim under Annex VII “complicate or escalate disputes”?  Given the whole context of Paragraph 5, I am highly doubtful of this argument. One must also note that the previous paragraph instructs all parties to

undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the 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;

The explicit reference to UNCLOS (albeit the 1982 version) doesn’t really add much weight to the claim that the the Declaration somehow prohibits parties from resorting to UNCLOS arbitration.  If anything, it goes the other way.  Given that the Declaration is not technically binding under international law anyway, let’s just say this is the weakest of a series of weak arguments trotted out by China in this dispute.

So let’s just call this what it is: China is thumbing its nose at UNCLOS and it has now dealt a  serious, near fatal blow, to the UNCLOS dispute settlement system, at least in its ability to resolve serious disputes involving major powers.  UNCLOS arbitration is not going to restrain China in any significant way. At least, China doesn’t think it will pay any serious costs to walking away, which is why it is willing to accept the equivalent of a default judgment.

From the perspective of the United States, the China-Philippines episode is a cautionary tale. On the one hand, it suggests that those critics of UNCLOS worried about the impact of Annex VII arbitration tribunals need not fear them all that much.  On the other hand, this episode should put an end to the always silly argument that the US needed to join UNCLOS in order to use UNCLOS against China.  That was never really going to work, and we now have ample evidence.