Statement of Facts

Although the territorial and maritime issues in the SCS have technically
been in existence since the 1930s, the case of the Philippines against China
is a direct result of very recent events arising out of the long-festering
dispute between the two countries.

By 2005 it appeared that relations between the parties had stabilized

enough that their national oil companies entered into a Joint Marine
Seismic Undertaking that was implemented until 2008. Relations took a
downturn, however, in 2009 when submissions were made (one by
Vietnam and Malaysia jointly, and another by Vietnam alone for areas of
the continental shelf beyond 200 nautical miles in the SCS in accordance
with UNCLOS.

These immediately prompted Chinas protest and first official publication

of its SCS claim known as the so-called nine dashed line, which was
followed by a sharp exchange of diplomatic notes. The tussle was thereafter
followed by a string of increasingly risky confrontations at sea.

On the Philippine side, the SCS disputes came to the attention of the
fledgling Presidential administration with an incident in 2011 involving
interference by China Maritime Surveillance ships with a Philippine seismic
survey ship at Reed Bank. Soon after, China lodged a diplomatic protest
against the Philippines public auction of petroleum concession blocks
which included two areas between Reed Bank and the Philippine island of
Palawan. The Philippines subsequently lodged its own diplomatic protests
against Chinas fishing and military activities in Reed Bank and nearby
areas. The exchange of protests continued well into the first quarter of
2012.

On January 23, 2013, the Philippine announced that it initiated an

arbitration case against China by issuing a Notification and Statement of
Claim in accordance with the dispute settlement provisions of UNCLOS,
particularly under Art. 287. UNCLOS provides for numerous means of
peaceful settlement of maritime disputes, which include nonbinding means
between the disputing parties and binding means involving third parties
such as arbitration and adjudication. Since neither the Philippines nor
China expressed any preferred third-party dispute settlement mechanism
in their ratifications, both are deemed to have selected arbitration as the
means to settle maritime disputes between them concerning the
interpretation and application of UNCLOS, unless any of the express
limitations and optional exceptions is applicable.

China formally rejected the Notification and Statement of Claim and

returned it to the Philippines on February 19, 2013. However, under Article
9 of UNCLOS Annex VII, the absence of a party or its failure to defend the
case does not bar the proceedings.

The Philippines began the process through the nomination of Rudiger

Wolfrum as arbitrator in its Notification and Statement of Claim. China had
30 days to likewise nominate one arbitrator, but did not do so in light of its
rejection of the arbitration.

The Tribunal subsequently met for the first time at the Peace Palace in The
Hague on July 11, 2013. China reiterated its rejection of the proceedings in
a Note to the Tribunal on August 1. The Tribunal thereafter issued its first
Procedural Order on August 27. The Order designated the Permanent Court
of Arbitration (PCA) to act as registry of the proceedings, and adopted the
Tribunals Rules of Procedure and initial timetable.

Likewise in its first Procedural Order, the Tribunal fixed March 30, 2014 as
the date on which the Philippines was to submit its Memorial, which is the
principal pleading stating its case in full. The Philippines was asked to fully
address all the issues, including matters relating to the jurisdiction of the
Tribunal the admissibility of its claims, and the merits of the dispute.

In mid- 2013, the Philippines noted and protested the increased frequency
and proximity of China Maritime Surveillance ships around its outpost the
Second Thomas Shoal, as well as the reported blocking of a Philippine
civilian vessel on its way to Pag-asa Island. Concrete blocks found by a
surveillance flight to Scarborough Shoal were mistaken to be preparations
for a permanent Chinese facility on the reef; they were later determined to
be from previous and longforgotten wrecks.
In January and February 2013, it was reported that Chinese ships had used
water cannon against Philippine fishing boats. The most serious incident
occurred in March, just prior to the deadline for submission of the
Memorial, when China Maritime Surveillance ships prevented a Philippine
Navy ship from resupplying and replacing personnel on its outpost on
Second Thomas Shoal. Several weeks later, another ship with journalists on
board successfully evaded Chinese ships blocking its path and was able to
carry out the resupply and personnel rotation.

On March 30, 2014, the Philippines submitted to the Tribunal and China a
lengthy Memorial, which is not public but reportedly comprises 4,000
pages of arguments, documents, and maps. The Tribunal thereafter
convened on May 14, and gave China until December 15 to submit its
Counter-Memorial in response to the Philippines. However, China
reiterated that it did not accept the arbitration proceedings in a note to the
Tribunal on May 21 Meanwhile, since 2012;

Subsequently, in May 2014, the Philippines arrested a group of Chinese and

Filipino fishermen engaged in an illegal trade of 500 endangered marine
turtles at Half-Moon Shoal, which is even closer to the Philippines than
Second Thomas Shoal but also claimed by China. China accused the
Philippines of provocation and demanded the release of its fishermen. This
was followed by the release of surveillance photographs of land reclamation
taking place on a massive scale and at rapid pace on Johnson South Reef.
Similar activities have been reported on Cuarteron Reef, McKennan Reef,
and Gaven Reef. Subsequently, similar reclamation was confirmed in Fiery
Cross Reef. Despite the Philippines repeated protests, the reclamation
activities continue unabated.

As China deployed an oil rig off the coast of Vietnam in the same month,
the Philippines called for a moratorium on all activities that created
tensions. This was later formally proposed as the first and immediate part
of a Triple Action Plan to manage the territorial and maritime disputes.
The second involves full implementation of the 2002 DOC and conclusion
of a regional Code of Conduct, while the third proposes the establishment
of a binding dispute settlement mechanism. China rejected this proposal.
Tensions began to ease somewhat as the year drew to a close.

On December 17, 2014, the Tribunal issued its third Procedural Order. It
recorded that China did not submit a Counter-Memorial, and reiterated its
decision to neither accept nor participate in the arbitration. The Tribunal
acknowledged that its members had been furnished with copies of Chinas
public position paper while noting that it also expressly stated that the
position paper should not be regarded as acceptance or participation in the
proceedings.

In accordance with its Rules of Procedure, the Tribunal gave the

Philippines until March 15, 2015 to submit a supplemental submission on
the Tribunals jurisdiction and the merits of the case, in particular to
address the points raised by Chinas position paper. After the submission,
China will have a similar period of 90 days within which to file a response.

The Tribunal also acknowledged receipt of Vietnams statement.

Issues

First, the Philippines asserts that China is claiming rights and entitlements
far in excess of what has been agreed upon by the international community
in UNCLOS. These excessive claims are signified by the nine-dash line map,
which China has invoked against the Philippines to justify its claims to
sovereignty, jurisdiction, historic title, or historic rights over maritime
areas or activities within those lines. The Philippine argues that Chinas
claims to maritime rights or entitlements based on the nine-dash
line map are contrary to UNCLOS and invalid. However, it
acknowledges that any issues regarding sovereignty over the land features
within those lines are not within the jurisdiction of the Tribunal, and
therefore does not seek a ruling from the Tribunal on those issues.