Full text of the Arbitral Tribunal's announcement on the South China Sea case

The following is the press release of the South China Sea Arbitration Tribunal on the case between the Philippines and China, issued in The Hague on July 12, 2016.

Permanent Court of Arbitration. Photo: Getty

The Arbitral Tribunal issues its award

The Award has been unanimously adopted and issued by the Arbitral Tribunal constituted under Annex VII to the United Nations Convention on the Law of the Sea (hereinafter referred to as “the Convention”) in the arbitration instituted by the Republic of the Philippines against the People’s Republic of China (hereinafter referred to as “the Philippines” and “China”).

This arbitration concerns the role of historic rights and the source of maritime entitlements in the South China Sea, the status of certain features and their maritime zones, and the lawfulness of Chinese actions that the Philippines alleges are in violation of the Convention. Consistent with the limitations of the Convention’s compulsory dispute settlement mechanism, the Tribunal has emphasized that it does not rule on any issues relating to sovereignty over land territories and does not delimit any maritime boundary between the Parties to the arbitration.

China has repeatedly stated that it will neither accept nor participate in the arbitration unilaterally initiated by the Philippines. However, Annex VII provides that “the absence of a party or the failure of a party to defend its case shall not constitute a bar to the proceedings.” Annex VII also provides that in the event of a party’s failure to participate in the proceedings, the Arbitral Tribunal “must satisfy itself that it has jurisdiction over the dispute and that the claim is fully established in law and fact.”

Accordingly, throughout the proceedings, the Arbitral Tribunal took necessary measures to examine the authenticity of the submissions made by the Philippines, including requesting the Philippines to provide additional arguments, posing questions to the Philippines before and during the two hearings, appointing independent experts tasked with reporting to the Tribunal on technical issues, and collecting historical evidence related to the structures in the South China Sea and transmitting this evidence to the commenting party.

China, through its December 2014 Position Paper and other official statements, has also made it clear that in its view the Arbitral Tribunal lacks jurisdiction. Article 288 of the Convention provides: 'In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be settled by decision of that court or tribunal'.

Accordingly, the Tribunal held a hearing on jurisdiction and admissibility in July 2015 and issued an Award on Jurisdiction and Admissibility on 29 October 2015, deciding on certain issues of jurisdiction and deferring certain issues for further consideration. The Tribunal then convened and held a hearing on the merits from 24 to 30 November 2015.

The Award issued today addresses the issues of jurisdiction not decided in the Award on Jurisdiction and Admissibility, as well as the issues of merit with respect to the Philippines’ claims within the Tribunal’s jurisdiction. Pursuant to Article 296 of the Convention and Article 11 of Annex VII, the Award is legally binding and final.

Historical Rights and the Nine-Dash Line:

The Tribunal found that it had jurisdiction to consider the dispute between the Parties concerning historic rights and the source of maritime entitlements in the South China Sea. On the merits, the Tribunal concluded that the Convention comprehensively regulates maritime rights, and that the protection of pre-existing rights to resources was considered, but not adopted and provided for in the Convention.

Accordingly, the Tribunal concluded that, to the extent that China had historic rights to resources in the waters of the South China Sea, these rights were extinguished because they were incompatible with the exclusive economic zone regime in the Convention. The Tribunal also found that although Chinese and other States had historically made use of the islands in the South China Sea, there was no evidence that China had historically exercised exclusive control over the waters or their resources. The Tribunal therefore concluded that there was no legal basis for China to claim historic rights to resources in the waters falling within the nine-dash line.

Regulation of the structures:

The Tribunal next considered entitlements to maritime zones and the status of features. It first considered whether certain features claimed by China are above water at high tide. Features that are above water at high tide generate an entitlement to at least a 12-nautical-mile territorial sea, while features that are submerged at high tide do not. The Tribunal noted that these features had been significantly modified by land reclamation and construction, and recalled that the Convention classifies features based on their natural condition and relied on historical material to evaluate features. The Tribunal then considered whether any of the features claimed by China could generate maritime zones beyond 12 nautical miles.

Under the Convention, islands generate a 200-nautical-mile exclusive economic zone and a continental shelf, but “rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.” The Tribunal concluded that this provision depends on the objective capacity of the features in their natural state to sustain a stable human population or economic activity independent of external resources or solely of an extractive nature. The Tribunal also found that the presence of official personnel on the features was dependent on external support and did not reflect the capabilities of the features.

The Tribunal also found that the historical evidence was more significant and found that the Spratly Islands had historically been used by small groups of fishermen and that there had been some guano mining and fishing by Japan. The Tribunal concluded that such short-term use did not constitute inhabitation by a stable community and that historical economic activity was merely extractive.

Accordingly, the Tribunal concluded that none of the features in the Spratly Islands is capable of generating extended maritime zones. The Tribunal also held that the Spratly Islands cannot generate maritime zones collectively as a unit. Having found that none of the features claimed by China is capable of generating an exclusive economic zone, the Tribunal considered that it could, without delimiting a maritime boundary, declare that certain maritime zones are within the exclusive economic zone of the Philippines because they do not overlap with any maritime entitlements that China may have.

The legality of China's activities:

The Tribunal next considered the lawfulness of China’s activities in the South China Sea. Noting that certain areas are within the Philippines’ exclusive economic zone, the Tribunal found that China had violated the Philippines’ sovereign rights in its exclusive economic zone by (a) interfering with Philippine fishing and petroleum exploration, (b) constructing artificial islands, and (c) failing to prevent Chinese fishermen from fishing in the area. The Tribunal also held that fishermen from the Philippines (like fishermen from China) had traditional fishing rights at Scarborough Shoal and that China had interfered with these rights by restricting access to the area. The Tribunal also held that Chinese law enforcement vessels had unlawfully created a serious risk of collision when they physically obstructed Philippine vessels.

Harmful to the marine environment:

The Tribunal considered the effect on the marine environment of China’s recent large-scale land reclamation and construction of artificial islands at seven features in the Spratly Islands and found that China had caused severe harm to the coral reef environment and violated its obligation to preserve and protect fragile ecosystems and the habitat of depleted, threatened, or endangered species. The Tribunal also found that Chinese authorities were aware that Chinese fishermen had harvested endangered sea turtles, coral, and giant clams on a large scale in the South China Sea (using methods causing severe harm to the coral reef environment) and had failed to fulfil its obligations to prevent and stop such activities.

Aggravating the dispute:

Finally, the Tribunal considered whether China’s activities since it began considering the case had aggravated the dispute between the Parties. The Tribunal found that it lacked jurisdiction to consider the impact of the standoff between Philippine naval vessels and Chinese naval and law enforcement vessels at Second Thomas Shoal, given that the dispute involved military activities and was therefore outside compulsory settlement. However, the Tribunal found that China’s recent large-scale land reclamation and construction of artificial islands was incompatible with the obligations of a State Party to the Convention during dispute settlement proceedings, insofar as China had caused irreparable harm to the marine environment, constructed a large artificial island in the exclusive economic zone of the Philippines, and destroyed evidence of the natural condition of features in the South China Sea that formed part of the dispute between the Parties.

An extended summary of the Court's judgment is set out below.

The Tribunal was constituted on 21 June 2013, in accordance with the procedure set out in Annex VII of the Convention on the Law of the Sea, to decide the dispute submitted by the Philippines. The Tribunal is composed of Judge Thomas A. Mensah of Ghana, Judge Jean-Pierre Cot of France, Judge Stanislaw Pawlak of Finland, Professor Alfred HA Soons of the Netherlands and Judge Rüdiger Wolfrum of Germany. Judge Thomas A. Mensah is the President of the Tribunal. The Permanent Court of Arbitration is the registry office in the proceedings.

Further information on the case can be found at www.pcacases.com/web/view/7, including the Award on Jurisdiction, the Rules of Procedure, previous Press Releases, the proceedings and photographs. The Procedural Order, submissions by the Philippines, and the reports of the Tribunal's experts will be made public in due course, as will an unofficial Chinese translation of the Tribunal's Award.

Summary of the Tribunal's Award on Jurisdiction and the Submissions of the Philippines

1. Basic Information about the Arbitration Case

The South China Sea Arbitration between the Philippines and China involves a request by the Philippines for a ruling on four issues relating to the relationship between the Philippines and China in the South China Sea. First, the Philippines seeks a ruling on the source of the parties’ rights and obligations in the South China Sea and the effect of the United Nations Convention on the Law of the Sea (the Convention) on China’s claim to historic rights within the so-called “nine-dash line.” Second, the Philippines seeks a ruling on whether certain features claimed by both China and the Philippines are properly defined as islands, rocks, low-tide elevations, or submerged banks under the Convention. The legal status of these features under the Convention determines the maritime zones they can generate. Third, the Philippines seeks a ruling from the Tribunal on whether certain actions by China in the South China Sea have violated the Convention by interfering with the Philippines’ exercise of its sovereign rights and freedoms under the Convention, and whether China has caused harm to the marine environment through its fishing and construction activities. Finally, the Philippines seeks a ruling on whether certain activities by China, in particular its large-scale land reclamation and construction of artificial islands in the Spratly Islands since the commencement of this arbitration, have aggravated and extended the dispute.

The Chinese Government has taken the position of neither accepting nor participating in the proceedings of the arbitration. China has reiterated this position in diplomatic notes, in the “Position Paper of the Government of the People’s Republic of China on the Matter of Jurisdiction in the South China Sea Arbitration Initiated by the Republic of the Philippines” dated 7 December 2014 (“China’s Position Paper”), in the letter from the Chinese Ambassador to the Kingdom of the Netherlands to the members of the Arbitral Tribunal, and in numerous public statements. The Chinese Government has made it clear that such statements and documents “cannot be interpreted as China’s participation in the proceedings of the arbitration in any form whatsoever.”

There are two provisions in the Convention that deal with situations where a party objects to the jurisdiction of the Arbitral Tribunal and refuses to participate in the proceedings:

(a) Article 288 of the Convention provides: “In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be for decision by that court or tribunal.”

(b) Article 9 of Annex VII of the Convention provides:

“Where one of the parties to a dispute fails to appear before the arbitral tribunal or to defend its case, the other party may request the tribunal to continue the proceedings and make its award. The absence of a party or the failure of a party to defend its case does not constitute a bar to the proceedings. Before making its award, the arbitral tribunal must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.”

During the proceedings, the Tribunal took a number of steps to satisfy itself that it had jurisdiction and that the Philippines’ claims were “well founded in fact and law”. On the issue of jurisdiction, the Tribunal decided to treat China’s informal communications as an objection to jurisdiction, held a separate Hearing on Jurisdiction and Admissibility from 7–13 July 2015, questioned the Philippines both before and during the hearing on jurisdiction, including issues that may not have been raised in China’s informal communications, and issued an Award on Jurisdiction and Admissibility on 29 October 2015 (the “Award on Jurisdiction”), deciding some submissions that it had jurisdiction and deferring others to consideration together with the merits.

On the merits, the Tribunal sought to test the authenticity of the Philippines’ submissions by requesting additional documents from the Philippines, by holding a substantive hearing from 24–30 November 2015, by questioning the Philippines on its claims both before and during the hearing, by appointing independent experts to report to the Tribunal on technical matters, and by obtaining historical records and hydrographic survey data on the South China Sea from the archives of the British Hydrographic Office, the National Library of France, and the French National Overseas Archives, and by making these documents, along with relevant documents from open sources, available to the parties to the proceedings for comment.

2. Position of the parties

The Philippines made 15 submissions in the case, asking the Court to determine:

1) The scope of maritime zones that China is entitled to enjoy in the South China Sea, like that of the Philippines, cannot go beyond what is permitted by the United Nations Convention on the Law of the Sea (“UNCLOS” or “Convention”);

2) China's claims to sovereign rights and jurisdiction, and to “historic rights”, over maritime areas in the South China Sea falling within the so-called “nine-dash line” are contrary to the Convention and have no legal effect to the extent that they exceed the geographical and substantive limits of the maritime zones to which China is entitled under UNCLOS;

3) Scarborough Shoal is not entitled to its own exclusive economic zone or continental shelf;

4) Mischief Reef, Second Thomas Shoal and Subi Reef are all low-tide elevations and they do not generate entitlement to a territorial sea, exclusive economic zone or continental shelf, and are not features capable of being acquired 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 cannot enjoy exclusive economic zones or continental shelves;

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

9) China acted unlawfully in failing to prevent its nationals and vessels from exploiting living resources within the Philippines' exclusive economic zone;

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

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

12) China's occupation and construction activities at Vành Khăn Shoal:

(a) violate the provisions of the Convention relating to artificial islands, installations and structures;

(b) breached China's obligations 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, creating a serious risk of collision with Philippine vessels operating in the vicinity of Scarborough Shoal;

14) Since the commencement of this arbitration in January 2013, China has aggravated and extended the disputes through the following actions:

(a) interfere with the Philippines' maritime rights in the waters at and adjacent to Second Thomas Shoal;

(b) prevent the rotation and resupply of Philippine forces stationed at Second Thomas Shoal; and

(c) threaten the health and lives of Philippine forces stationed at Second Thomas Shoal;

15) China must stop making further illegal claims and actions.

With respect to the Court's jurisdiction, the Philippines requested the Court to declare that the Philippines' claims are “fully within the Court's jurisdiction and competence.”

China neither accepts nor participates in this case, but states its position that “the Arbitral Tribunal has no jurisdiction over this case.” In its Position Paper, China has made the following arguments:

- The nature of the case is territorial sovereignty over certain maritime features in the East Sea, this issue is beyond the scope of the Convention and does not relate to the interpretation or application of the Convention;

- China and the Philippines have agreed, through bilateral agreements and the Declaration on the Conduct of Parties in the South China Sea, to resolve relevant disputes through negotiations. The Philippines' unilateral initiation of this arbitration court is a violation of its obligations under international law;

- Even assuming that the subject matter of the case concerns the interpretation and application of the Convention, these matters are an integral part of the maritime delimitation process between the two countries, thus falling within the context of China's 2006 declaration in accordance with the Convention, which excludes maritime delimitation disputes from compulsory arbitration or other compulsory dispute settlement mechanisms;

Although China did not make formal statements corresponding to most of the Philippines' submissions, during the proceedings the Tribunal attempted to determine China's position on the basis of public statements and diplomatic correspondence.

3. The Court's Decision on the Scope of Jurisdiction

The Tribunal considered the scope of its jurisdiction to consider the Philippines’ claims both in its Award on Jurisdiction, to the extent that issues of jurisdiction could be determined as a preliminary issue, and in its Award of 12 July 2016, to the extent that issues of jurisdiction were intertwined with the merits of the Philippines’ claims. The Tribunal’s Award of 12 July 2016 also incorporated and reaffirmed the jurisdictional decisions made in the Award on Jurisdiction.

For completeness, the Court's decisions on jurisdiction in both judgments are summarized here.

a. Initial issues

In its Award on Jurisdiction, the Tribunal considered a number of preliminary issues relating to the Tribunal’s jurisdiction. The Tribunal noted that both the Philippines and China are parties to the Convention and that the Convention does not permit a State to exclude itself from the dispute settlement mechanism provided for in the Convention. The Tribunal held that China’s non-participation in the proceedings does not deprive the Tribunal of its jurisdiction and that the Tribunal had been constituted in accordance with the provisions of Annex VII to the Convention, which includes a procedure for the establishment of a tribunal even in the absence of a party. Finally, the Tribunal rejected the argument set out in China’s Position Paper and held that the mere fact of initiating the proceedings alone cannot be considered an abuse of the Convention.

b. The existence of a Dispute Concerning the Interpretation and Application of the Convention

In its Jurisdiction Award, the Court considered whether the Parties' dispute concerned the interpretation or application of the Convention, which is a condition for recourse to the Convention's mechanisms.

The Tribunal rejected China’s argument in its Position Paper that the Parties’ dispute was about territorial sovereignty and therefore not a matter of relevance to the Convention. The Tribunal accepted that there was a dispute between the Parties concerning sovereignty over islands in the South China Sea, but it held that the issues submitted by the Philippines to arbitration did not concern sovereignty. The Tribunal considered that it was not necessary to implicitly decide sovereignty in order to consider the Philippines’ Submissions and that doing so would not advance the sovereignty claims of any Party over islands in the South China Sea.

The Tribunal also rejected the argument set out in China's Position Paper that the Parties' dispute was really about maritime boundary delimitation and was therefore excluded from dispute settlement by Article 298 of the Convention and by a declaration made by China on 25 August 2006 under that Article. The Tribunal found that a dispute about whether a State has an entitlement to a maritime zone is a distinct matter from the delimitation of maritime zones in an area where those zones overlap. The Tribunal noted that maritime entitlements, among other issues, are often considered in boundary delimitation, but may also arise in other contexts. The Tribunal held that it could not therefore be concluded that a dispute over each of these issues could be considered a dispute about boundary delimitation.

Finally, the Tribunal held that the Philippines’ Submissions reflected a dispute concerning the Convention. In so doing, the Tribunal emphasized that (a) a dispute concerning the interaction between the Convention and other rights (including any Chinese “historic rights”) is a dispute concerning the Convention and (b) given China’s failure to state its position, the existence of a dispute may be inferred from a State’s conduct or silence, and this is a matter that must be considered objectively.

c. Indispensable Third Party Involvement

In its Award on Jurisdiction, the Tribunal considered whether the non-participation of other States that also claim islands in the South China Sea would constitute a bar to the Tribunal’s jurisdiction. The Tribunal found that the rights of other States would not constitute “the subject matter of the award” – the criterion for a third party to be considered indispensable. The Tribunal further noted that in December 2014, Vietnam submitted a statement to the Tribunal in which it stated that it “has no doubt that the Tribunal has jurisdiction in this matter”. The Tribunal also noted that Vietnam, Malaysia and Indonesia had attended the jurisdiction hearings as observers, and none of the States had argued that its participation was indispensable.

In its Award of 12 July 2016, the Tribunal noted that it had received a note verbale from Malaysia dated 23 June 2016, which restated Malaysia’s claims in the South China Sea. The Tribunal compared its findings on the merits of the Philippines’ Submissions with the rights claimed by Malaysia and reaffirmed its decision that Malaysia was not an indispensable party and that Malaysia’s interests in the South China Sea did not preclude the Tribunal from considering the Philippines’ Submissions.

d. Prerequisites for jurisdiction

In its Jurisdiction Award, the Court considered the applicability of Articles 281 and 282 of the Convention, which may prevent a State from using the Convention's mechanisms if those States have agreed to use other means of dispute settlement.

The Tribunal rejected China’s argument in its Position Paper that the 2002 Declaration on the Conduct of Parties in the South China Sea precluded the Philippines from initiating arbitration. The Tribunal found that the Declaration was a political and non-legally binding agreement, did not provide for a binding dispute settlement mechanism, did not exclude other means of dispute settlement, and therefore did not limit the Tribunal’s jurisdiction under Articles 281 or 282. The Tribunal also considered the Treaty of Amity and Cooperation in Southeast Asia, the Convention on Biological Diversity, and a series of joint statements by the Philippines and China on the settlement of disputes through negotiations and concluded that none of these instruments constituted an agreement that would preclude the Philippines from initiating arbitration.

The Tribunal also found that the Parties had exchanged views regarding the settlement of the disputes, as required by Article 283 of the Convention, before the Philippines initiated arbitration. The Tribunal concluded that this condition was met in the record of diplomatic communications between the Philippines and China, in which the Philippines expressed its preference for multilateral negotiations, involving other States bordering the South China Sea, while China insisted that only bilateral negotiations would be considered.

e. Exceptions and limitations of jurisdiction

In its Award of 12 July 2016, the Tribunal considered whether the Philippines’ Submissions concerning China’s historic rights and the ‘nine-dash line’ were affected by the exclusion from jurisdiction for disputes concerning ‘historic title’ in Article 298 of the Convention. The Tribunal reviewed the meaning of the phrase ‘historic title’ in the law of the sea and decided that it refers to claims to historic sovereignty over bays and near-shore waters. Having examined China’s claims and conduct in the South China Sea, the Tribunal concluded that China claimed historic rights to resources within the ‘nine-dash line’, but did not claim historic title to the waters of the South China Sea. Accordingly, the Tribunal concluded that it had jurisdiction to consider the Philippines’ claims concerning historic rights and the issue of the ‘nine-dash line’ between the Philippines and China.

In its Award of 12 July 2016, the Tribunal also considered whether the Philippines’ Submissions were affected by the exclusion from jurisdiction under Article 298 for disputes concerning maritime boundary delimitation. In its Award on Jurisdiction, the Tribunal concluded that the Philippines’ Submissions did not concern boundary delimitation, but noted that some of the Philippines’ Submissions depended on whether certain areas formed part of the Philippines’ exclusive economic zone.

The Tribunal decided that it could only consider those submissions if China had no possibility of entitlement to an exclusive economic zone overlapping that of the Philippines and deferred a final decision on jurisdiction. In its Award of 12 July 2016, the Tribunal considered the evidence regarding the reefs and islands claimed by China in the South China Sea and concluded that none of them was capable of entitlement to an exclusive economic zone. Since China has no possibility of entitlement to an exclusive economic zone overlapping that of the Philippines in the Spratly Islands, the Tribunal held that the Philippines’ submissions were not dependent on prior delimitation of a boundary.

In its Award of 12 July 2016, the Tribunal also considered whether the Philippines’ Submissions were affected by the exception from jurisdiction in Article 298 for disputes concerning law enforcement activities in the exclusive economic zone. The Tribunal recalled that the exception in Article 298 would only apply if the Philippines’ Submissions concerned law enforcement activities in China’s exclusive economic zone. However, because the Philippines’ Submissions concerned events that took place in the Philippines’ own exclusive economic zone or in the territorial sea, the Tribunal concluded that Article 298 did not constitute an obstacle to its jurisdiction.

Finally, in its Award of 12 July 2016, the Tribunal considered whether the Philippines’ submissions were affected by the exception from jurisdiction in Article 298 for disputes concerning military activities. The Tribunal decided that the standoff between Philippine marines at Second Thomas Shoal and Chinese naval and law enforcement forces constituted military activities and concluded that it lacked jurisdiction over Submission No. 14(a)-(c). The Tribunal also considered whether the Philippines’ land reclamation and construction of artificial islands at seven features in the Spratly Islands constituted military activities, but noted that China had repeatedly emphasized the non-military nature of its activities and had stated at the highest level that it would not militarize its presence in the Spratlys. The Tribunal decided that it would not consider these activities to be military in nature given China’s repeated assurances to the contrary. The Court therefore concludes that Article 298 does not bar the Court's jurisdiction.

4. The Court's Judgment on the Substance of the Philippines' Claims

a. The 'Nine-Dash Line' and China's Claim to Historic Rights over the Maritime Areas of the South China Sea

In its Award of 12 July 2016, the Tribunal considered the validity of China's 'nine-dash line' and whether China has historic rights to resources in the South China Sea beyond the limits of the maritime zones to which it is entitled pursuant to the Convention.

The Tribunal examined the history of the Convention and its provisions relating to maritime zones and concluded that the purpose of the Convention was to allocate comprehensively the rights of States over maritime zones. The Tribunal noted that the question of pre-existing rights to resources (in particular to fishing resources) had been carefully considered in the negotiations on the creation of the exclusive economic zone and that some States had expressed a desire to preserve historic fishing rights in this new frontier. However, this view was rejected and the final text of the Convention only gave other States a limited right of access to fishing in the exclusive economic zone (in case the coastal State could not exploit the full catch) but did not give other States any rights to petroleum or mineral resources. The Tribunal found that China's claim to historic rights to resources was incompatible with the detailed allocation of rights and maritime zones in the Convention and concluded that, if China had historic rights to resources in the waters of the South China Sea, such rights were extinguished by the entry into force of the Convention to the extent that they were incompatible with the Convention's system of maritime zones.

The Tribunal also examined the historical record to determine whether China had historic rights to resources in the South China Sea prior to the entry into force of the Convention. The Tribunal noted that there was evidence that Chinese navigators and fishermen, as well as those of other States, had historically made use of the islands in the South China Sea, although it stressed that it had no jurisdiction to determine sovereignty over those islands. However, the Tribunal held that prior to the Convention, the waters of the South China Sea outside the territorial sea were legally part of the high seas, in which vessels of any State could navigate and fish freely. The Tribunal therefore concluded that China's historical navigation and fishing in the waters of the South China Sea represented high seas freedoms, rather than a historic right, and that there was no evidence that China had historically exercised exclusive control over the waters of the South China Sea or prevented other States from exploiting their resources.

Accordingly, the Tribunal concluded that, as between the Philippines and China, there was no legal basis for China to claim historic rights to resources, in excess of the rights provided for in the Convention, within the sea areas falling within the 'nine-dash line'.

b. Regulation of structures in the East Sea

In its Award of 12 July 2016, the Tribunal considered the status of features in the South China Sea and the maritime entitlements that China could claim under the Convention.

The Tribunal first made a technical assessment of whether certain reefs claimed by China are above water at high tide. Under Articles 13 and 121 of the Convention, features that are above water at high tide are entitled to at least a 12-nautical-mile territorial sea, while features that are submerged at high tide are not entitled to maritime zones. The Tribunal noted that many reefs in the South China Sea have been heavily modified by recent land reclamation and construction and recalled that the Convention classifies features based on their natural condition. The Tribunal appointed a hydrographic expert to assist it in evaluating the Philippines’ technical evidence and relied heavily on archival materials and previous hydrographic assessments to evaluate the features. The Tribunal agreed with the Philippines that Scarborough Shoal, Johnson South Reef, Cuarteron Reef, and Fiery Cross Reef are high-tide features and that Subi Reef, Hughes Reef, Mischief Reef, and Second Thomas Shoal are submerged at sea in their natural condition. However, the Tribunal disagreed with the Philippines on the status of Gaven Reef (North) and Ken Nan Reef, concluding that both are high-tide features.

The Tribunal next considered whether any of the features claimed by China could generate maritime zones beyond 12 nautical miles. Under Article 121 of the Convention, islands generate a 200 nautical mile exclusive economic zone and a continental shelf, but “rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.” The Tribunal found that this provision was closely linked to the extension of coastal State jurisdiction to the creation of an exclusive economic zone and was intended to prevent small features from generating large maritime zones that would intrude into the maritime zones of inhabited territory or the high seas and the seabed, the common heritage of mankind. The Tribunal interpreted Article 121 and concluded that the maritime entitlements of a feature depend on (a) the objective capacity of the feature; (b) in its natural state, it can sustain either (c) a stable human community or (d) economic activity that is not dependent on external resources and is not purely extractive in nature.

The Tribunal found that many of the features in the Spratly Islands are currently controlled by one or more of the coastal States, which have constructed structures and maintained personnel on site. The Tribunal found that modern presence depends on external resources and support and that many of the features have been modified to enhance their habitability, including through land reclamation and construction of infrastructure such as desalination plants. The Tribunal concluded that the presence of government personnel on many of the features does not demonstrate their capacity, in their natural condition, to sustain a stable human community and considered that historical evidence of habitation or economic life is more relevant to the objective capacity of the features. In its review of the historical record, the Tribunal found that the Spratly Islands were historically used by small groups of fishermen from China and other countries, and that several Japanese guano mining and fishing companies were active there in the 1920s and 1930s. The Tribunal concluded that the temporary use of the features by fishermen did not amount to habitation by a stable community and that all historical economic activity was of an extractive nature. Accordingly, the Tribunal concluded that all high-tide features in the Spratly Islands (including, for example, Itu Aba, Thitu, Ben Lac, Spratly, East Cay, and West Cay) are legally “rocks” that do not generate an exclusive economic zone or continental shelf.

The Tribunal also concluded that the Convention does not provide that a group of islands such as the Spratly Islands will generate maritime zones as a single entity.

c. China's actions in the East Sea

In its Award of 12 July 2016, the Tribunal considered the lawfulness under the Convention of various Chinese actions in the South China Sea.

Having found that Mischief Reef, Second Thomas Shoal and Reed Bank are submerged features that form part of the exclusive economic zone and continental shelf of the Philippines and do not overlap with any maritime zones that China may have, the Tribunal concluded that the Convention is clear in conferring sovereign rights on the Philippines over maritime areas within its exclusive economic zone. The Tribunal found that, in fact, China has (a) interfered with Philippine petroleum exploration at Reed Bank; (b) intentionally prohibited Philippine vessels from fishing in the Philippines' exclusive economic zone; (c) protected and failed to prevent Chinese fishermen from fishing in the Philippines' exclusive economic zone at Mischief Reef and Second Thomas Shoal; and (d) constructed installations and artificial islands at Mischief Reef without the Philippines' consent. The Tribunal therefore concluded that China had violated the Philippines' sovereign rights over its exclusive economic zone and continental shelf.

The Tribunal next considered traditional fishing rights at Scarborough Shoal and concluded that fishermen from the Philippines, as well as from China and other States, had long fished at Scarborough Shoal and had traditional fishing rights in the area. Because Scarborough Shoal is above water at high tide, it is entitled to a territorial sea, the waters around it do not constitute an exclusive economic zone, and traditional fishing rights were not extinguished by the Convention. Although the Tribunal emphasized that it was not deciding sovereignty over Scarborough Shoal, it found that China had breached its obligation to respect the traditional fishing rights of Filipino fishermen by preventing access to Scarborough Shoal after May 2012. However, the Tribunal found that it would have reached the same conclusion with respect to the traditional fishing rights of Chinese fishermen had the Philippines prevented Chinese nationals from fishing at Scarborough Shoal.

The Tribunal also considered the impact of China’s actions on the marine environment. In doing so, the Tribunal was assisted by three independent experts on coral reef biology appointed to evaluate the available scientific evidence and the Philippines’ expert reports. The Tribunal found that China’s recent large-scale land reclamation and construction of artificial islands at seven features in the Spratly Islands has caused severe harm to the coral reef environment and that China has breached its obligations under Articles 192 and 194 of the Convention to preserve and protect the marine environment with respect to fragile ecosystems and the habitat of endangered, threatened, or depleted species. The Tribunal also found that Chinese fishermen have engaged in large-scale harvesting of endangered sea turtles, coral, and giant clams in the South China Sea, using methods that cause severe damage to the coral reef environment. The Tribunal found that the Chinese authorities were aware of these activities and failed to exercise due diligence under the Convention to prevent them.

Finally, the Tribunal considered the lawfulness of the conduct of Chinese law enforcement vessels at Scarborough Shoal on two occasions in April and May 2012 when Chinese vessels attempted to obstruct Philippine vessels from approaching or entering Scarborough Shoal. In doing so, the Tribunal was assisted by an independent expert on navigational safety appointed to review written reports provided by Philippine vessel officers and expert evidence on navigational safety provided by the Philippines. The Tribunal determined that Chinese law enforcement vessels repeatedly approached Philippine vessels at high speed and attempted to cross ahead of them at close range, creating a substantial risk of collision and danger to Philippine vessels and personnel. The Tribunal concluded that China had breached its obligations under the 1972 Convention on the International Regulations for Preventing Collisions at Sea and Article 94 of the Convention relating to navigational safety.

d. Aggravating the dispute between the Parties

In its Award of 12 July 2016, the Tribunal considered whether China’s recent large-scale land reclamation and construction of artificial islands at seven features in the Spratlys since the commencement of the arbitration had aggravated the dispute between the Parties. The Tribunal recalled that parties to the dispute settlement mechanism have a duty to refrain from aggravating or prolonging a dispute or disputes over the issues under dispute. The Tribunal found that China had (a) built a large artificial island at Mischief Reef, a low-tide elevation located in the exclusive economic zone of the Philippines; (b) caused permanent and irreparable harm to the coral reef ecosystem; and (c) permanently destroyed evidence of the natural condition of the features. The Tribunal concluded that China had breached its duty to refrain from aggravating or prolonging the dispute between the Parties during the pendency of the arbitration.

e. Future conduct of the Parties

Finally, the Tribunal considered the Philippines’ request for a declaration that China would henceforth respect the rights and freedoms of the Philippines and comply with its obligations under the Convention. In this regard, the Tribunal noted that both the Philippines and China have repeatedly acknowledged the Convention and the general obligation of good faith in defining and regulating their conduct. The Tribunal considered that the core of the dispute in this case does not lie in the intention of China or the Philippines to infringe the legal rights of the other, but rather in their fundamentally different understandings of their respective rights under the Convention in the waters of the South China Sea. The Tribunal recalled that in international law there is a fundamental principle that “bad faith” cannot be inferred and noted that Article 11 of Annex VII provides that “the award… shall be complied with by the parties to the dispute”. Accordingly, the Tribunal found no need to make any further declaration./.

According to VOV