[Liu Haiyang is a research fellow at the Collaborative Innovation Center of South China Sea Studies, Nanjing University, China. This post was submitted to Opinio Juris under the auspices of the Chinese Initiative on International Law, an NGO with a mandate of promoting a better understanding of international law, particularly international criminal law and justice.]
The ad hoc Arbitral Tribunal established under the request of Philippines issued its final award on 12 July 2016. The lawfare over the legal effect of the verdicts of the Tribunal between China, on one side, and the United States with its allies and partners behind the case, on the other, will change focus from the legality of jurisdiction concerning the preliminary award to the legal consequences of the final award.
Although the U.S. is not a party to the present case, it seemed well prepared for the decision. Besides a significant increase of military presence and operations, with more warships and aircraft in the South China Sea, the U.S. and its allies have also loudly raised their voices to urge China to respect the final decisions of the said arbitral tribunal. The general tone of the criticisms suggests that China’s non-compliance with the final ruling would amount to non-compliance with international law and as well as a show of contempt for the international rule of law. For its part, China has also stepped up its media campaign to defend its position of non-recognition of any ruling by the tribunal through more diplomatic efforts and academic symposiums.
While both sides may hype up or downplay the legal consequences of the ruling, the heart of the question is the legal effect of the arbitral ruling in international law. To be more specific, is the award legally binding? How could the decision of an arbitral tribunal be implemented in international law? Is the non-recognition and non-implementation of the decision of an arbitral tribunal equivalent to non-compliance with international law? These are questions that need to be addressed.
In general, once an arbitral award has been made, it is final and binding upon the parties. That is the reason why the mainstream international understanding, misdirected by the U.S., is that the South China Sea arbitral award is binding upon China. However, there is an exception to the rule. In certain circumstances the award itself may be regarded as a nullity. It is fairly generally accepted under international law that the excess of power may be treated as a nullity. That’s exactly the position taken by China: that the arbitral tribunal exercised jurisdiction ultra vires and any of its decisions have no legal effects. In particular, the disputes between China and Philippines are either sovereignty disputes over islands, which are not governed by the UNCLOS, or disputes concerning maritime delimitation, which are excluded by China through a 2006 declaration based on Article 298 of the Convention. However, those exceptional rules are fully understood only by a small group of legal experts, and the general public only knows general rules. This put the U.S. in a good position to hype up the binding force of the award as a general rule, while China has an uphill battle to explain to the international community why the award has no legal effects as an exceptional rule. The U.S. and its allies will surely make full use of this advantage to put consistent international pressure on China to abide by the award.
Even supposing an arbitral award is binding on both parties, how to enforce it is another issue. In general, the success of arbitration depends on the goodwill between the parties in actually enforcing the award. Unlike in a domestic legal system, which has a central government to enforce the law, there is no such world government above states to enforce international law. The only exceptional case lies with the International Court of Justice (ICJ). Under article 94 of the UN Charter, one party may have recourse to the Security Council, which may enforce the decisions. However, the present case was decided by a 1982 UNCLOS Annex VII arbitral tribunal and the decision could in no way be enforced by third parties. Under article 12 of the UNCLOS Annex VII, “Any controversy which may arise between the parties to the dispute as regards the interpretation or manner of implementation of the award may be submitted by either party for decision to the arbitral tribunal which made the award.” Also, “[a]ny such controversy may be submitted to another court or tribunal under article 287 by agreement of all the parties to the dispute.”
Finally, does the arbitration award per se amount to international law, so that the non-recognition and non-implementation of the award is equivalent to non-compliance with international law? It is common sense among international lawyers that, under article 38 of the Statute of the ICJ, the sources of international law are composed of international treaties, international customs, and general principles of law and judicial decisions can only be utilized as a subsidiary means for the determination of rules of law rather than as an actual source of law. However, the U.S. may again make use of the gap between the understanding shared by small group of legal experts and the general public’s misunderstanding of international law so as to label China’s non-recognition of the award as non-compliance with international law.
In fact, neither the U.S. nor the Philippines has much credibility in this regard. The U.S. is the least qualified state to criticize China on this point, as the U.S. is the only country that used veto power in the UN Security Council to prevent the enforcement of the ICJ decision in Nicaragua case. Notwithstanding this clear defiance of international judicial decisions, many U.S. politicians and scholars are echoing the same voice that China would dishonor international rule of law in the sense that China does not recognize the award. Even the Philippines has been inconsistent in its respect for international arbitration, holding in the present case that a arbitral tribunal’s decision in Southern Bluefin Tuna case was wrongly decided. It is questionable whether the Philippines’ dishonoring of an arbitral decision amounts to non-compliance of international law. While it is not meant to make a tu quoque argument here, the position of the U.S. shows a clear sign of a double standard.
For its part, the best approach for China to win this lawfare is to tell its side of the story regarding the general rule versus exceptional rule. There is still a long way to go for China to pierce the legal veil covering American political trickery.