Why China rejects arbitration in South China Sea dispute

With barely weeks to a landmark ruling by a UN Arbitral Tribunal in a case filed the Philippines over the disputed South China Sea, China reiterated on Friday it will not respect the verdict.

China and the Philippines both claim the Spratly Islands and the two countries have previously faced off over the Scarborough Shoal (known as Huangyan Island in China).

In 2013, the Philippines filed an application for compulsory arbitration before the UN Tribunal to challenge China's claim the United Nations Convention on the Law of the Sea (UNCLOS).

The much-anticipated ruling has raised the stakes as to whether the dispute will ultimately be resolved legally, diplomatically or by some unfortunate use of force.

Law of the sea

The UNCLOS treaty establishes a legal framework under which coastal states can claim, manage, and utilize their ocean resources

It defines the maritime zones subject to jurisdiction of coastal states and governs the determination of the bases for delimitation of maritime boundaries.

The treaty stipulates that judgments rendered by the International Tribunal for the Law of the Sea or a specially constituted arbitral tribunal are final and cannot be appealed.

Prof Li Guoqiang, deputy director at the Institute of Chinese Borderland Studies, at the Chinese Academy of Social Sciences, says UN tribunal has no powers to arbitrate sovereignty disputes.

Compulsory mediation

Under the treaty, compulsory arbitration is the final and most extreme form of dispute resolution that an aggrieved party can seek to utilize against the other party to the dispute.

Guoqiang, one of China's foremost experts on the subject, says under the convention, compulsory arbitration can only be sought after other procedures have been exhausted.

UNCLOS stipulates that bilateral negotiations and consultations serve as the first level of dispute resolution, before the parties can then move to the option of non-binding conciliation.

He says the arbitration case bypassed the bilateral negotiation process the Philippines and China have previously been engaged in to resolve the dispute.

China has held a series of talks and signed the Declaration on the Conduct of Parties in the South China Sea with neighbours under the framework of ASEAN, including the Philippines, in 2002.

Consent of parties

Prof Guoqiang maintains that compulsory arbitration can only take effect when the process is subject to the consent of the other disputing party.

"The Tribunal has no legal authority to impose its will on a non-consenting party to a territorial dispute in the first place," Guoqiang told journalists at a briefing in Beijing on Thursday.

While UNCLOS grants parties the right to opt out of compulsory arbitration for disputes that may include sea boundary or historic claims, this was not granted to China, Guoqiang says.

Historical claim

Chinese government officials repeatedly allude to documents to back the claim that China was first country to discover, name, develop and administer the South China Sea islands.

According to Guoqiang, sovereignty disputes over islands and adjacent waters based on competing historical claims lie outside of the jurisdiction of the UN Arbitral Tribunal to decide.                

He insists that under UNCLOS, the tribunal did not pay attention to provisions that require it to consider "the sovereignty of all states" before arbitrating in any dispute.

China also insists that the arbitration bypassed the bilateral negotiation process that the Philippines and China have previously been engaged in to resolve the dispute.

China has held a series of talks and signed the Declaration on the Conduct of Parties in the South China Sea with neighbours under the framework of ASEAN, including the Philippines, in 2002.

Close encounters

The US, which is not a party to the claims, has not only sent military patrol aircraft and warships near the disputed waters under the banner of ‘freedom of navigation exercises.'

China has reclaimed parts of the sea, built military assets on them and had close encounters with the US military, raising fears of confrontation between the two powers.

On Thursday, Jiang Jianguo, China's minister of the state council information office said the sea disputes with China's neighbours can only be resolved through negotiation.

The South China Sea stretches about 1.4 million square miles, linking the Indian Ocean to the Pacific. It is a critical shipping channel with half the world's merchant ships passing through it.

In the 1970s, vast reserves of oil and natural gas in waters surrounding the islands were discovered, igniting bitter disputes in the contested waters.

Ahead of the ruling, China has built a support base among UN and African Union states, apparently including Uganda, Kenya and Tanzania, in favour of dialogue to resolve sea disputes.