Speech delivered at the Special Panel on South China Sea Arbitration of the Public International Law Colloquium on Maritime Disputes Settlement

LI Shishi, President of Chinese Society of International Law

(16 July 2016, Hong Kong)

Dear Colleagues:

In earlier discussions, many of our experts have expressed their views on the Final Award from different perspectives. With respect to the Award, I would like to make two comments.

First, the Award is seriously flawed in both procedural and substantive aspects.

Seen from procedural perspective, this is an Award ultra vires and is a result of infringement as well.

On the one hand, the Award goes beyond the Tribunal’s jurisdiction, which is limited to disputes concerning the interpretation or application of the UNCLOS. The Tribunal ignores the fact that the Philippines’ submissions concern, in essence, disputes concerning territorial sovereignty between China and the Philippines, and proceeds to rule on issues beyond the scope of the UNCLOS, such as territorial sovereignty, historic rights and outlying archipelagos of continental states. The Tribunal’s arbitrary expansion of its power impairs the international legal order of the oceans.

On the other hand, the Award infringes upon the right of States Parties to choose by themselves the means of dispute settlement. The procedures of the States Parties’ own choice prevail as established in the dispute settlement mechanism under the UNCLOS. The exhaustion of such procedures is the prerequisite for the recourse to compulsory third-party procedures. When a dispute arises, the parties shall proceed expeditiously to an exchange of views regarding the means of its settlement. The fulfillment of this obligation is a precondition to the recourse to compulsory third-party procedures. States Parties also have the right to exclude disputes concerning sea boundary delimitation, historic bays or titles, as well as military and law enforcement activities etc. from the applicability of compulsory third-party procedures by declaration.

In order to exercise jurisdiction over and decide upon the case, the Tribunal disregarded the law and the fact, and deliberately lowered the threshold for the application of arbitral procedures. It not only erroneously denied the existence of an agreement between China and the Philippines on the settlement of their disputes through negotiations and the binding force of the agreement, misinterpreted rules regarding the fulfillment of the obligation to exchange views, but also distorted China’s 2006 declaration which excludes issues of maritime delimitation from the applicability of compulsory procedures. The Award sets a notorious precedent and undermines the foundation of the dispute settlement mechanism under the UNCLOS.

At the substantive level, the Tribunal abuses its authority in making the Award. It abuses the power to interpret rules of international law, by erroneously interpreting legal basis of historic rights and rules of outlying archipelagos of continental States, by erroneously denying China’s historic rights in the South China Sea, by erroneously denying China’s territorial sovereignty over the Nansha Islands as a whole and maritime rights thereof, and by erroneously denying that Taiping Dao, as part of the Nansha Islands, is entitled to exclusive economic zone and continental shelf.

Both historic rights and the system of outlying archipelagos of continental States have solid legal ground. They originated from and are governed by general international law, including customary international law, which operate in parallel with the UNCLOS. Chinese activities in the South China Sea can be traced back to over two thousand years ago. Its historic rights in the South China Sea had come into existence long prior to the conclusion of the UNCLOS in 1982, and are fully consistent with customary international law. China has been maintaining rights taking the Nansha Islands as a whole, which is consistent with the system of outlying archipelagos in customary international law. It is supported by abundant state practice and recognized in a number of international instruments.

However, the Tribunal “fragmented” the Nansha Islands, which is taken as a whole, into various separate features to decide on their legal status and maritime rights. This is not only inconsistent with the fact and State practice, but also lacks legal basis. Even treated as individual features, what are the criteria for deciding upon their status as “islands” or “rocks”? Permanent international judicial bodies such as the International Court of Justice have been prudent in considering the question, and refrained from making a definite conclusion. On such significant and sensitive issues, the Tribunal, which consists of 5 individuals and is established on an ad hoc basis, went as far as willfully creating the so-called criteria, interpreting them hastily in an extreme fashion, and making a preposterous conclusion. Just think about it, if islands like Taiping Dao, which can clearly “sustain human habitation” and “economic life of its own”, are not to be regarded as fully entitled islands, how many maritime features in the world can? How many States would lose vast areas of exclusive economic zone and continental shelf? If this were the case, the map of the world oceans would be subject to significant modification.

Second, the Arbitral Award seriously infringes upon China’s territorial sovereignty and has a serious impact on the peace and stability in the region of the South China Sea.

The Chinese people is the first to have discovered, named, explored and exploited the resources of the South China Sea Islands. And the Chinese Government is the first to have exercised sovereignty and jurisdiction over them continuously, peacefully and effectively. During its war of aggression against China in the 1930s and the 1940s, Japan illegally occupied the South China Sea Islands. The Cairo Declaration of December 1943 explicitly provides that “Japan shall be stripped of all the islands in the Pacific which she has seized or occupied since the beginning of the first World War in 1914, and that all the territories Japan has stolen from the Chinese, such as Manchuria, Formosa, and The Pescadores, shall be restored to (…) China”. This indicates that “all the territories Japan has stolen from the Chinese” are not limited to “Manchuria, Formosa and the Pescadores”, but also obviously covers the South China Sea Islands which were also under Japan’s illegal occupation. This point is also reflected in the “Sino-Japanese Peace Treaty” signed between Japan and the Taiwan Authority in 1952. Article 2 of this Treaty provides that “Japan has renounced all right, title and claim to Taiwan (Formosa) and Penghu (the Pescadores) as well as the Spratly Islands and the Paracel Islands”. Although the Taiwan Authority was not entitled to conclude a peace treaty with Japan on behalf of China, the provision above clearly shows that Japan recognized that the South China Sea Islands are “territories Japan has stolen from the Chinese” and shall be returned to China.

The Potsdam Declaration of July 1945 provides that “[t]he terms of the Cairo Declaration shall be carried out”. In August of the same year, Japan declared in its Instrument of Surrender “to carry out the provisions of the Potsdam Declaration in good faith”. According to international legal instruments such as the Cairo Declaration, the Potsdam Declaration and the Japanese Instrument of Surrender, China resumed its exercise of sovereignty over the South China Sea Islands after the ending of the Second World War. Since the 1970s, some of the littoral countries of the South China Sea have illegally seized and occupied some islands and reefs of China’s Nansha Islands, but this shall not change the fact that the Nansha Islands belongs to China. China’s territorial sovereignty and maritime rights and interests in the South China Sea have solid historic and legal grounds. The Arbitral Tribunal attempts to deny China’s historic right in the South China Sea and the integral status of the Nansha Islands, and to further deny China’s territorial sovereignty and maritime rights and interests in the South China Sea. This is entirely erroneous and is never going to succeed.

For the benefit of the peace and stability of the region, China has always been seeking for the peaceful settlement of disputes in the South China Sea through negotiation. In 2002, China and the ASEAN member States signed the Declaration on the Conduct of Parties in the South China Sea, which has played an important role in maintaining peace and stability of the South China Sea. Currently, China is consulting with ASEAN member States on the establishment of a Code of Conduct in the South China Sea, and endeavors to conclude this COC on a consensus basis as soon as possible. The Arbitral Tribunal not only attempts to degrade the importance of the DOC, but also sets up new obstacles to the settlement of disputes in the South China Sea, which will bring about new complicate variables to the maintenance of peace and stability of the region.

Distinguished Chair, Ladies and Gentlemen,

Justice and the rule of law are values guiding practitioners of law. Regretfully, the Tribunal not only makes no effort towards these two values, but saves no effort to take jurisdiction in defiance of the parties’ will. The Tribunal exceeds its mandate under the UNCLOS and makes arbitrary decisions which are groundless in fact and law. It would be no doubt a fatal strike to the international rule of law, if an award as such were final and “binding”, and it were to represent international law and the international order of the oceans. The Arbitral Tribunal’s award issued under the name of the UNCLOS is one made in excess of its mandate, one infringing upon the parties’ rights, one made by abusing its power. The best way to treat it is to ignore it.

Thank you!