PH-CN-20160712-Award

PCA Case Nº 2013-19 IN THE MATTER OF THE SOUTH CHINA SEA ARBITRATION - before - AN ARBITRAL TRIBUNAL CONSTITUTED UNDER ANNEX VII TO THE 1982 UNITED NATIONS CONVENTION ON THE LAW OF THE SEA - between - THE REPUBLIC OF THE PHILIPPINES - and THE PEOPLE’S REPUBLIC OF CHINA AWARD Arbitral Tribunal: Judge Thomas A Mensah (Presiding Arbitrator) Judge Jean-Pierre Cot Judge Stanislaw Pawlak Professor Alfred H.A Soons Judge Rüdiger Wolfrum Registry: Permanent Court of Arbitration 12 July 2016 The South China Sea Arbitration Award of 12 July 2016 this page intentionally blank The South China Sea Arbitration Award of 12 July 2016 REPRESENTATIVES OF THE PARTIES PEOPLE’S REPUBLIC OF CHINA REPUBLIC OF THE PHILIPPINES AGENT No agents or representatives appointed Mr Jose C Calida Solicitor General of the Philippines replacing Solicitor General Florin T Hilbay, as of 30 June 2016 COUNSEL AND ADVOCATES Mr Paul S Reichler Mr Lawrence H Martin Mr Andrew B Loewenstein Foley Hoag LLP, Washington and Boston Professor Bernard H Oxman University of Miami School of Law, Miami Professor Philippe Sands QC Matrix Chambers, London Professor Alan Boyle Essex Court Chambers, London i The South China Sea Arbitration Award of 12 July 2016 this page intentionally blank ii The South China Sea Arbitration Award of 12 July 2016 TABLE OF CONTENTS I INTRODUCTION II PROCEDURAL HISTORY 11 A Initiation of the Arbitration 11 B Constitution of the Tribunal and Appointment of the PCA as Registry 12 C Written Arguments 13 D Bifurcation of Proceedings 16 E Hearing on Jurisdiction and Admissibility 17 F Provisional Scheduling of Hearing on the Merits and Appointment of Expert 18 G Issuance of Award on Jurisdiction and Admissibility 19 H Hearing on the Merits 23 I Post-Hearing Proceedings 27 J Further Evidence, Expert Reports, and Communications from China and Others 29 K Notification, Publication, and Translation of Award 38 L Deposits for Costs of the Arbitration 38 III RELIEF REQUESTED AND SUBMISSIONS 41 IV PRELIMINARY MATTERS 45 A B C V The Legal and Practical Consequences of China’s Non-Participation 45 Steps Taken to Ensure Procedural Fairness to Both Parties 46 Steps Taken by the Tribunal to Satisfy Itself that It Has Jurisdiction and that the Claim is Well Founded in Fact and Law 49 Conclusion on the Legal and Practical Consequences of China’s Non-Participation 55 Summary of the Tribunal’s Award on Jurisdiction 56 Preliminary Matters 57 Existence of a Dispute concerning Interpretation and Application of the Convention 58 Involvement of Indispensable Third Parties 60 Preconditions to Jurisdiction 60 Exceptions and Limitations to Jurisdiction 62 Decisions of the Tribunal 63 The Status and Effect of the Tribunal’s Award on Jurisdiction 64 THE ‘NINE-DASH LINE’ AND CHINA’S CLAIM TO HISTORIC RIGHTS IN THE MARITIME AREAS OF THE SOUTH CHINA SEA (SUBMISSIONS NO AND 2) 67 A Introduction 67 B China’s Declarations and Legislation concerning Entitlements to Maritime Zones 68 C China’s Claims to Historic Rights 71 D The Philippines’ Position 74 E Jurisdiction 79 China’s Claim to Historic Rights 80 China’s Position 84 iii The South China Sea Arbitration Award of 12 July 2016 F The Tribunal’s Considerations 85 VI The Tribunal’s Jurisdiction 85 (a) The Nature of China’s Claimed Rights in the South China Sea 86 (b) The Scope of the Exception in Article 298(1)(a)(i) of the Convention 92 The Merits of the Philippines’ Submissions No and 97 (a) The Convention and Prior Claims to Historic Rights and Jurisdiction 98 (b) China’s Claim to Historic Rights in the South China Sea 112 (c) Whether China has Established Exceptional Rights or Jurisdiction since the Adoption of the Convention 115 (d) Conclusion 116 THE STATUS OF FEATURES IN THE SOUTH CHINA SEA (SUBMISSIONS NO TO 7) 119 A Introduction 119 B The Status of Features as Above/Below Water at High Tide (Submissions No and 6) 119 C Introduction 119 Factual Background 120 The Philippines’ Position 122 China’s Position 130 The Tribunal’s Considerations 131 (a) The Interpretation of Article 13 and the Tribunal’s Approach to Submissions No and 131 (b) Evidence on the Status of Features as Above/Below Water at High Tide 137 (c) The Status of Particular Features in the South China Sea 143 (d) Conclusion 174 The Status of Features as Rocks/Islands (Submissions No 3, 5, and 7) 175 Introduction 175 Factual Background 178 The Philippines’ Position 181 (a) Interpretation of Article 121(3) 181 (b) Application to Features Identified in Submissions No and 186 (c) Application to Other Maritime Features 187 China’s Position 195 (a) China’s Statements on the Meaning of Article 121(3) 197 (b) China’s Position on the Status of Scarborough Shoal 199 (c) China’s Position on the Status of Itu Aba 202 (d) China’s Position on the Status of Other Features in the Spratly Islands 203 The Tribunal’s Considerations 204 (a) Interpretation of Article 121 of the Convention 204 (b) Application of Article 121(3) to Scarborough Shoal, Johnson Reef, Cuarteron Reef, Fiery Cross Reef, Gaven Reef (North), and McKennan Reef 232 (c) Application of Article 121 to the Spratly Islands as a Whole 235 iv The South China Sea Arbitration Award of 12 July 2016 VII (d) Application of Article 121 to Other High-Tide Features in the Spratly Islands 237 (e) Decision on the Tribunal’s Jurisdiction with respect to Submission No 254 (f) Conclusion 259 CHINESE ACTIVITIES IN THE SOUTH CHINA SEA (SUBMISSIONS NO TO 13) 261 A Alleged Interference with the Philippines’ Sovereign Rights in its EEZ and Continental Shelf (Submission No 8) 261 Introduction 261 Factual Background 261 B C (a) Actions regarding Non-Living Resources 261 (b) Alleged Interference with Living Resources 268 The Philippines’ Position 274 (a) Jurisdiction 274 (b) The Philippines’ Rights in the Exclusive Economic Zone 275 China’s Position 276 The Tribunal’s Considerations 277 (a) The Tribunal’s Jurisdiction 277 (b) China’s Actions and the Philippines’ Sovereign Rights 279 (c) Conclusion 286 Alleged Failure to Prevent Chinese Nationals from Exploiting the Philippines’ Living Resources (Submission No 9) 287 Introduction 287 Factual Background 287 The Philippines’ Position 288 China’s Position 290 The Tribunal’s Considerations 291 (a) The Tribunal’s Jurisdiction 291 (b) The Law Applicable to China’s Supervision of its Fishing Vessels 291 (c) The Activities of Chinese Fishing Vessels at Mischief Reef and Second Thomas Shoal 294 (d) Conclusion 297 China’s Actions in respect of Traditional Fishing at Scarborough Shoal (Submission No 10) 299 Introduction 299 Factual Background 299 (a) Traditional Fishing by Philippine Fishermen at Scarborough Shoal 300 (b) China’s Intermittent Prevention of Fishing by Philippine Vessels at Scarborough Shoal (May 2012 to Present) 301 The Philippines’ Position 304 (a) Article 2(3) of the Convention 304 (b) Articles 51(1) and 62(3) of the Convention 308 v The South China Sea Arbitration Award of 12 July 2016 (c) D China’s Position 309 The Tribunal’s Considerations 310 (a) The Law Applicable to Traditional Fishing 311 (b) The Protection of Traditional Fishing at Scarborough Shoal 315 (c) Conclusion 318 Alleged Failure to Protect and Preserve the Marine Environment (Submissions No 11 and 12(B)) 319 Introduction 319 Factual Background 321 E China’s Obligation to Act in Good Faith and Settle Disputes by Peaceful Means 308 (a) The Marine Environment of the South China Sea 321 (b) Harmful Fishing Practices and Harvesting of Endangered Species 322 (c) China’s Construction Activities on Seven Reefs in the Spratly Islands 329 The Philippines’ Position 355 (a) Harmful Fishing Practices and Harvesting of Endangered Species 356 (b) China’s Construction Activities on Seven Reefs in the Spratly Islands 358 (c) Interpretation and Application of Part XII of the Convention 360 China’s Position 363 (a) Harmful Fishing Practices and Harvesting of Endangered Species 363 (b) China’s Construction Activities on Seven Reefs in the Spratly Islands 364 The Tribunal’s Considerations 369 (a) The Tribunal’s Jurisdiction 369 (b) Relevant Provisions of the Convention 373 (c) Harmful Fishing Practices and Harvesting of Endangered Species 378 (d) China’s Construction Activities on Seven Reefs in the Spratly Islands 388 (e) Conclusion 397 Occupation and Construction Activities on Mischief Reef (Submission No 12) 399 Introduction 399 Factual Background 399 (a) China’s Initial Activities on Mischief Reef (1995 to 2013) 399 (b) Island-Building Activities on Mischief Reef (Post-2013) 402 The Philippines’ Position 404 (a) Military Activities and the Tribunal’s Jurisdiction 404 (b) Articles 60 and 80 of the Convention 407 (c) Attempted Appropriation under the Convention 408 China’s Position 409 The Tribunal’s Considerations 411 (a) The Tribunal’s Jurisdiction 411 (b) China’s Actions at Mischief Reef and the Philippines’ Sovereign Rights 413 vi The South China Sea Arbitration Award of 12 July 2016 (c) F Conclusion 415 Operation of Law Enforcement Vessels in a Dangerous Manner (Submission No 13) 417 Introduction 417 Factual Background 417 (a) Near-Collision of Philippine Vessels BRP Pampanga and BRP Edsa II with Chinese Vessel FLEC 310 418 (b) Near-Collision of Philippine Vessel MCS 3008 with Several Chinese Vessels upon Approach to Scarborough Shoal 418 The Philippines’ Position 421 (a) The Applicability of the COLREGS to China 421 (b) Exceptions to the COLREGS for Special Circumstances 423 (c) Application of the COLREGS to Chinese Vessels at Scarborough Shoal 423 China’s Position 426 The Tribunal’s Considerations 428 (a) Background on the COLREGS 428 (b) Report of Tribunal-Appointed Independent Expert 429 (c) Application of Article 94 of the Convention and the COLREGS 431 (d) Conclusion 435 VIII AGGRAVATION OR EXTENSION OF THE DISPUTE BETWEEN THE PARTIES (SUBMISSION NO 14) 437 A Introduction 437 B Factual Background 438 C D E Chinese Actions in and around Second Thomas Shoal 438 (a) China’s Objections to the Presence of BRP Sierra Madre at Second Thomas Shoal 438 (b) China’s Interference in the Rotation and Resupply of Philippine Personnel at Second Thomas Shoal 441 China’s Dredging, Artificial Island-Building and Construction Activities 445 The Philippines’ Position 445 Jurisdiction 445 The Philippines’ Rights to Have this Dispute Settled Peacefully 447 (a) Obligation Not to Engage in Acts that Might Aggravate a Dispute 447 (b) China’s Conduct in relation to the Dispute 448 China’s Position 450 Obligation Not to Engage in Acts that Might Aggravate a Dispute 450 China’s Conduct in relation to the Dispute 451 (a) Chinese Activities in and around Second Thomas Shoal 451 (b) China’s Dredging and Construction Activities 452 The Tribunal’s Considerations 452 The Tribunal’s Jurisdiction 452 (a) China’s Actions in and around Second Thomas Shoal 453 vii The South China Sea Arbitration Award of 12 July 2016 (b) IX X China’s Dredging and Construction Activities 456 The Law Applicable to Conduct in the Course of Dispute Resolution Proceedings 457 The Effect of China’s Dredging and Construction Activities on the Parties’ Disputes 461 Conclusion 464 THE FUTURE CONDUCT OF THE PARTIES (SUBMISSION NO 15) 465 A The Philippines’ Position 465 B China’s Position 466 C The Tribunal’s Considerations 467 D Conclusion 469 DISPOSITIF 471 viii