The wait is over: a judgment has been issued in the Philippines v. China South China Sea arbitration.

A
five-judge tribunal constituted under the Permanent Court of Arbitration (PCA) in The Hague has
released its much-anticipated Award concerning the Philippines’ challenge to a number of China’s
maritime claims and activities in the region. The Philippines initiated the arbitration in January 2013
under the dispute settlement procedures of Annex VII to the 1982 United Nations Convention on the
Law of the Sea (UNCLOS).

The unanimous, 501-page Award and the eleven-page press release from the PCA can be found here.

Bottom line: A nearly across-the-board win for the Philippines, and a searing verdict on the lawfulness of
China’s artificial island construction and other actions in the South China Sea.

Summary of Key Claims and Holdings

The Philippines’ claims fell into four general categories. The ruling of the Tribunal on each category of
claims is summarized below:

1. The broadest claim was a challenge to China’s “nine-dash line” covering most of the South China Sea.
China has never clarified whether the line represents a claim to the islands within the line and their
adjacent waters; a boundary of national sovereignty over all the enclosed waters (including, but not
limited by, the land features inside the line); or a “historic” claim of sovereignty or some other set of
historic rights to the maritime space within the line. The Philippines sought a declaration that the
countries’ respective rights and obligations regarding the waters, seabed, and maritime features of the
South China Sea are governed by UNCLOS. As such, China’s claims based on any “historic rights” to
waters, seabed, and subsoil within the nine-dash line are contrary to UNCLOS and invalid. (See Table:
Claims 1 and 2)

Holding: UNCLOS “comprehensively” governs the parties’ respective rights to maritime areas in the
South China Sea. Therefore, to the extent China’s nine-dash line is a claim of “historic rights” to the
waters of the South China Sea, it is invalid.

Reasoning: Whatever historic rights China may have had were extinguished when UNCLOS was adopted,
to the extent those rights were incompatible with UNCLOS.

2. The Philippines sought a determination as to whether certain land features in the Spratly Islands
claimed by both China and the Philippines are properly characterized as islands, rocks, low tide
elevations (LTEs), or submerged banks. Under UNCLOS, an “island” generates both a territorial sea of 12
nautical miles and an exclusive economic zone (EEZ) of up to 200 nautical miles, subject to delimitation
of a maritime boundary with any other countries’ overlapping territorial seas or EEZs. A “rock” is entitled
to a territorial sea no greater than 12 nautical miles, but not an EEZ. LTEs and submerged banks do not
generate any such entitlements. (See Table: Claims 3, 4, 6, and 7)

Holding: None of the features in the Spratly Islands generates an EEZ, nor can the Spratly Islands
generate an EEZ collectively as a unit. As such, the Tribunal declared certain areas are within the
Philippines’ EEZ and not overlapped by any possible Chinese entitlement.

Reasoning: The baseline of analysis is what the features can sustain in their “natural condition” (i.e., not
after construction of artificial islands, installation of desalination plants, etc.). Based on historical
evidence, none of the features in the Spratly Islands can sustain either a stable community of people or
economic activity that is not dependent on outside resources or purely extractive in nature. The current
presence of personnel on the features is dependent on outside support and does not reflect the
capacity of the features in their natural condition.

3. The Philippines sought a declaration that China violated UNCLOS by interfering with the Philippines’
rights and freedoms within its EEZs. This includes preventing Philippine fishing around Scarborough
Shoal, violating UNCLOS’s environmental protection provisions through construction and fishing
activities that have harmed the marine environment (including at Scarborough Shoal, Second Thomas
Shoal, and Mischief Reef), and by dangerously operating law enforcement vessels around Scarborough
Shoal. (See Table: Claims 5, 8, 9, 10, 11, 12, and 13)

Holding: China violated the Philippines’ sovereign rights in its EEZ. It did so by interfering with Philippine
fishing and hydrocarbon exploration; constructing artificial islands; and failing to prevent Chinese
fishermen from fishing in the Philippines’ EEZ. China also interfered with Philippine fishermen’s
traditional fishing rights near Scarborough Shoal (without prejudice to the question of sovereignty over
Scarborough Shoal). China’s construction of artificial islands at seven features in the Spratly Islands, as
well as illegal fishing and harvesting by Chinese nationals, violate UNCLOS obligations to protect the
marine environment. Finally, Chinese law enforcement vessels unlawfully created a serious risk of
collision by physically obstructing Philippine vessels at Scarborough Shoal in 2012.

Reasoning: This set of holdings depended on the Tribunal finding that certain areas are within the
Philippines’ EEZ and not subject to possible overlapping Chinese entitlements. It also depended on
finding that activities such as island construction are, in accordance with China’s own public statements,
not “military activities” and therefore not excluded from jurisdiction under UNCLOS. Once this was
established, the Tribunal considered Chinese activities in the relevant areas and found that China had (a)
interfered with Philippine petroleum exploration at Reed Bank, (b) purported to prohibit fishing by
Philippine vessels within the Philippine EEZ, (c) protected and failed to prevent Chinese fishermen from
fishing within the Philippine EEZ at Mischief Reef and Second Thomas Shoal, and (d) constructed
artificial islands/installations at Mischief Reef without the Philippines’ authorization. As for Scarborough
Shoal, regardless of who has sovereignty, both Philippine and Chinese fishermen have “traditional
fishing rights” at the Shoal that were not extinguished by UNCLOS, and China violated the Philippines’
rights by entirely preventing Filipino fishermen from fishing near Scarborough Shoal after May 2012. In
addition, Chinese artificial island construction has caused “severe harm to the coral reef environment”
and China has failed to stop its nationals from engaging in “harmful” and “destructive” harvesting and
fishing of endangered sea turtles, coral, and giant clams in violation of UNCLOS. Finally, Chinese law
enforcement vessels violated maritime safety obligations by creating a serious risk of collision on two
occasions in April and May 2012 during the Scarborough Shoal standoff.

4. The Philippines sought a declaration that China’s recent actions, specifically its land reclamation and
construction of artificial islands in the Spratly Islands after the arbitration was commenced, violated the
obligations UNCLOS places on states to refrain from conduct that “aggravates and extends” a dispute
while dispute resolution proceedings are pending. (See Table: Claim 14)

Holding: China has aggravated and extended the disputes through its dredging, artificial island-building,
and construction activities.

Reasoning: While these proceedings were pending, China has built a large island on Mischief Reed, an
LTE within the Philippines’ EEZ; caused irreparable harm to the marine ecosystem; and permanently
destroyed evidence of the natural condition of the features at issue.

Table of Philippine Claims and Tribunal Rulings*

Submission Jurisdictional
Philippines’ Claim Merits Ruling
Number Ruling

(Deferred to merits Yes: UNCLOS

China’s maritime entitlements in South China Sea may not stage) comprehensively
1
exceed those established by UNCLOS allocates rights to
maritime areas
 Jurisdiction
granted
Philippines win

Yes: There is no legal

basis for China to
claim historic rights
(Deferred to merits to waters in the
stage) South China Sea (so,
China’s “nine-dash line” claim is invalid to the extent it to the extent that is
exceeds the limits established by UNCLOS what the nine-dash
2
Jurisdiction line means, it is
granted invalid)

Philippines win

Yes: Scarborough
Shoal is a rock that
generates no EEZ
Scarborough Shoal generates no EEZ or continental shelf Jurisdiction
3
granted
Philippines win

Yes: Mischief Reef,

Second Thomas
Shoal, and Subi Reef
are LTEs
Jurisdiction
4 Scarborough Shoal generates no EEZ or continental shelf
granted

Philippines win

Yes: Mischief Reef

and Second Thomas
(Deferred to merits
Shoal are part of the
stage)
EEZ and continental
Mischief Reef and Second Thomas Shoal are part of the shelf of the
5 Philippines’ EEZ and continental shelf Philippines
Jurisdiction
granted

Philippines win

6 Gaven Reef and McKennan Reef (including Hughes Reef) Jurisdiction No: Both Gaven and
 are LTEs that generate no maritime entitlements, but may granted McKennan Reef are
be used to determine baselines to measure territorial sea above water at high
tide; they are rocks
that generate
territorial seas but
no EEZ or continental
shelf

Philippines loss

Yes: Johnson Reef,

Cuarterton Reef, and
Fiery Cross Reef are
rocks that generate
Johnson Reef, Cuarterton Reef, and Fiery Cross Reef no EEZ or continental
generate no entitlements to EEZ or continental shelf Jurisdiction
7 shelf
granted

Philippines win

Yes: China has

interfered with
(Deferred to merits Philippine sovereign
stage) rights to fishing and
China has interfered with the Philippines’ exercise of hydrocarbon
sovereign rights over living and non-living resources exploration within its
8 within its EEZ and continental shelf
Jurisdiction EEZ
granted

Philippines win

Yes: China failed to

(Reserved to prevent Chinese
merits stage) fishermen from
China has failed to prevent its nationals and vessels from fishing within the
exploiting the living resources in the Philippines’ EEZ Philippine EEZ
9
Jurisdiction
granted
Philippines win

Yes: China violated

10 China has prevented Philippine fishermen from pursuing Jurisdiction
granted the Philippines’
their livelihoods through traditional fishing activities
“traditional fishing
 around Scarborough Shoal rights” at
Scarborough Shoal

Philippines win

Yes: China engaged

in environmentally
harmful
fishing/harvesting
China has violated UNCLOS’s environmental protection practices at
obligations at Scarborough Shoal and Second Thomas Scarborough Shoal
Jurisdiction
11 Shoal and Second Thomas
granted
Shoal

Philippines win

Yes: Environmental
protection provisions
were violated at
Mischief Reef;
artificial island
construction violated
(Deferred to merits
Philippine sovereign
China’s occupation and construction on Mischief Reef stage)
rights within its EEZ;
violate UNCLOS provisions on artificial islands and the “appropriation”
12 environmental protection, and are unlawful acts of claim is moot
attempted appropriation Jurisdiction because Mischief
granted Reef is an LTE not
capable of
appropriation

Philippines win

Yes: China violated

UNCLOS and other
China has violated UNCLOS by dangerously operating law treaty provisions on
enforcement vessels creating serious risk of collision near Jurisdiction maritime safety
13 Scarborough Shoal granted

Philippines win
 Yes: Although there
is no jurisdiction over
disputes involving
military activities
such as the Second
Thomas Shoal
China has unlawfully aggravated and extended the (Deferred to merits standoff, China has
dispute by interfering with the Philippines’ rights of stage) aggravated/extended
navigation near Scarborough Shoal, preventing the the disputes through
14 rotation and resupply of Philippine personnel stationed at recent large-scale
Second Thomas Shoal, and endangering the health of the land reclamation and
Jurisdiction
personnel there artificial island
granted in part,
denied in part construction in the
Philippine EEZ

Philippines win

(Deferred to merits Qualified yes: This

stage) claim simply asks
Going forward China shall respect the rights and China to do what it is
freedoms of the Philippines under UNCLOS and comply required to do under
15 with its duties under UNCLOS UNCLOS; therefore,
Jurisdiction no further statement
granted is necessary

* See p. 34-35 of Tribunal’s Award on Jurisdiction and Admissibility; p. 5 of the PCA’s 12 July 2016 Press
Release; and p. 4 of this paper by Paul Gewirtz.

Initial Takeaways

1. Not many people predicted that the Philippines would all but run the table in this case. It’s hard to
imagine a much more favorable outcome for their legal team.

2. One of the ironies of the Award is that China has vociferously argued in public statements that it is not
“militarizing” the South China Sea and that its actions there are for civilian purposes. Those claims
turned out to be crucial to the Tribunal’s conclusion that it had jurisdiction to consider the legality of
certain Chinese actions such as construction of artificial islands in the South China Sea, because Article
298(1)(b) of UNCLOS excludes disputes concerning “military activities” from compulsory dispute
settlement. Despite China’s non-participation in the proceedings, the Tribunal went out of its way to
review the December 2014 position paper issued by China’s Ministry of Foreign Affairs as well as
numerous public statements of Chinese leaders. This was an example of where those public statements
worked against China’s legal interests in the arbitration.

3. The Tribunal rejected the possibility that China could claim the entirety of the Spratly Islands as a
single archipelagic feature, as suggested in recent statements by the Ministry of Foreign Affairs as well
as a white paper issued last month by the Chinese Society of International Law. As Julian noted earlier,
this was a bit of a preemptory legal strike against “any Chinese attempt to draw ‘straight baselines’
around the Spratlys and thus treat the whole area as a single entity for generating maritime rights.”

4. Of all the rulings on the status of features in the Spratly Islands, perhaps none will generate more
discussion than the conclusion that Itu Aba (Taiping Island) is a rock and not an island. Many observers
thought that Itu Aba, the largest naturally occurring land feature in the Spratly Islands, had the strongest
claim to being deemed an island entitled to both a territorial sea and an EEZ. The concepts the Tribunal
employed to determine what makes something a “rock[] which cannot sustain human habitation or
economic life of [its] own” are likely to guide future legal determinations of this character.

It will take time to digest this portion of the opinion, but the Tribunal’s “habitability and economic life”
factors seem to include:

 The objective capacity of the feature in its natural condition (i.e., “without external additions or
modifications” and without outside support), to sustain, over an extended period of time, either

o (a) a stable community of people for whom the feature constitutes a home and on
which they can remain, or

o (b) economic activity that is not

 (i) dependent on outside resources, or

 (ii) purely extractive in nature without the involvement of a local population.

 Factors contributing to the natural capacity of a feature to do so “include the presence of water,
food, and shelter in sufficient quantities to enable a group of persons to live on the feature for
an indeterminate period of time.”

 In assessing these “capacity” factors, the Tribunal stated, “the most reliable evidence of the
capacity of a feature will usually be the historical use to which it has been put.” Applying that
standard here, the Tribunal saw “no indication that anything fairly resembling a stable human
community has ever formed on the Spratly Islands. Rather, the islands have been a temporary
refuge and base of operations for fishermen and a transient residence for labourers engaged in
mining and fishing.”

5. Given its sweeping conclusions favoring the Philippines, the Award may seem to have nothing positive
in it for China. But the Tribunal offered an important qualification to its judgment, and perhaps a bit of
an olive branch toward the end of a decision it knew would not be well received in Beijing. We should
not assume, said the Tribunal, that these disputes are the product of bad faith on the part of the PRC;
rather, they are the result of basic disagreements about respective rights and obligations and the
applicability of UNCLOS. From paragraph 1198 of the Award:

“The root of the disputes presented by the Philippines in this arbitration lies not in any intention on the
part of China or the Philippines to infringe on the legal rights of the other, but rather—as has been
apparent throughout these proceedings—in fundamentally different understandings of their respective
rights under the Convention in the waters of the South China Sea. In such circumstances, the purpose of
dispute resolution proceedings is to clarify the Parties’ respective rights and obligations and thereby to
facilitate their future relations in accordance with the general obligations of good faith that both
governments unequivocally recognise.”

6. Where does this leave us? China’s position all along with respect to these proceedings can be
summed up as “no acceptance, no participation, no recognition, and no implementation.” The PRC
Ministry of Foreign Affairs predictably wasted no time releasing a statement declaring that “the award is
null and void and has no binding force.” The Philippine Foreign Affairs Secretary welcomed the decision,
stating: “The Philippines strongly affirms its respect for this milestone decision as an important
contribution to ongoing efforts in addressing disputes in the South China Sea.” No surprises here,
especially given that the Tribunal resolved virtually all the key issues in favor of the Philippines. For its
part, the U.S. State Department issued a measured statement remarking that “[t]he decision today by
the Tribunal in the Philippines-China arbitration is an important contribution to the shared goal of a
peaceful resolution to disputes in the South China Sea.”

As these statements suggest, the issuance of this Award by no means puts to rest the disputes or the
tensions in the South China Sea. The arbitration was never going to resolve issues of sovereignty over
the islands and rocks in the South China Sea, because disputes over territorial sovereignty are beyond
the jurisdiction of an UNCLOS Tribunal. And since the Tribunal has no power to enforce its nominally
binding decision, questions now turn to what any form of “implementation” might look like and the
effect this ruling will have on future negotiations over territorial sovereignty.

China, the Philippines, ASEAN countries, and the United States face a range of strategic questions about
the best way forward. Will Beijing demonstrate its disregard for the decision by engaging in land
reclamation at Scarborough Shoal or declaring an Air Defense Identification Zone in the South China Sea,
as some have predicted? Will it continue to insist on conditioning any future bilateral negotiations with
the administration of new Philippine President Rodrigo Duterte on his government’s rejection of the
Tribunal’s Award? Will it worry that some of these behaviors will push the Philippines and other ASEAN
nations closer to the United States? Will we see the U.S. Navy conducting “pure” freedom of navigation
operations (FONOPs) within 12 nautical miles of the Spratly Island features the Tribunal says are not
entitled to a territorial sea?

There is much to digest here and much more left to shake out. National governments will be under
pressure to respond quickly, but let’s hope they first take the time to carefully read the Tribunal’s
mammoth 501-page decision.