On June 29, the Permanent Court of Arbitration announced that the award of the South China Sea Arbitration initiated by the Philippines against China will be issued on July 12. The U.S. side has obviously prepared well for the upcoming decision. Besides a significant increase of military presence and operations, with more warships and aircraft in the South China Sea, the U.S. and its allies have also loudly raised their voices to urge China to respect the final decisions of the said arbitral tribunal. The general tone of the criticisms suggests that China's non-compliance with the final ruling would amount to non-compliance with international law and as well as a show of contempt for the international rule of law. For its part, China has also stepped up its media campaign to defend its position of non-recognition of any ruling by the tribunal through more diplomatic efforts and academic symposiums.
While both sides may hype up or downplay the legal consequences of the forthcoming ruling, the heart of the question is the legal effect of the arbitral ruling in international law. To be more specific, will the award of the tribunal will be binding or not? How would the decision of an arbitral tribunal be implemented in international law? Is the non-recognition and non-implementation of decisions of an arbitral tribunal equivalent to non-compliance with international law? These are questions that need to be addressed — questions that will be politically exploited by both the U.S. and China to win the final battle before and even after the forthcoming ruling.
In general, once an arbitral award has been made, it is final and binding upon the parties. That's the reason why the mainstream international understanding, misdirected by the U.S., is that the upcoming South China Sea arbitral award is binding for China. However, any rules have exceptions. In certain circumstances the award itself may be regarded as a nullity. It is fairly generally accepted under international law that the excess of power may be treated as a nullity. That's exactly the position taken by China: that the arbitral tribunal exercised jurisdiction ultra vires and any of its decisions have no legal effects. However, those exceptional rules are fully understood only by a small group of legal experts, and the general public only knows general rules. This put the U.S. in a good position to hype the binding force of the award as a general rule, while China has an uphill battle to explain to the international community why the award has no legal effects as an exceptional rule. The U.S. and its allies will surely make full use of this advantage to put consistent international pressure on China to abide by the award.
Even supposing an arbitral award is binding on both parties, how to enforce it is another issue. In general, the success of an arbitration depends on the goodwill between the parties in actually enforcing the award. Unlike in a domestic legal system, which has a central government to enforce the law, there is no such world government above states to enforce international law. The only exceptional case lies with the International Court of Justice (ICJ). Under article 94 of the UN Charter, one party may have recourse to the Security Council, which may enforce the decisions. However, the present case was handled by the 1982 UNCLOS Annex VII arbitral tribunal and the decision could in no way be enforced by any parties. Under article 12 of the UNCLOS Annex VII, “Any controversy which may arise between the parties to the dispute as regards the interpretation or manner of implementation of the award may be submitted by either party for decision to the arbitral tribunal which made the award.” Also, “Any such controversy may be submitted to another court or tribunal under article 287 by agreement of all the parties to the dispute.”
The U.S. may deliberately confuse the award of the present case with a decision of ICJ in the media campaign so as to call on its regional allies and partners to enforce the award as if it is enforceable under international law. Even worse, the U.S. may take the award as a legal excuse to use force in the South China Sea, which would definitely contravene the general principle of international law banning the use of force in international relations.
Finally, does the arbitration award per se amount to international law, so that the non-recognition and non-implementation of the award is equivalent to non-compliance with international law? It is common sense among international lawyers that, under article 38 of the Statute of the ICJ, the sources of international law are composed of international treaties, international customs, and general principles of law and judicial decisions can only be utilized as a subsidiary means for the determination of rules of law rather than as an actual source of law. However, the U.S. may again make use of the gap between the understanding shared by small group of legal experts and the general public's misunderstanding of international law so as to label China's non-recognition of the award as non-compliance with international law.
In fact, neither the U.S. nor the Philippines has much credibility in this regard. The U.S. is the least qualified state to criticize China on this point, as the U.S. is the only country that used veto power in the UN Security Council to prevent the enforcement of the ICJ decision in Nicaragua case. Notwithstanding this clear defiance of international judicial decisions, many U.S. politicians and scholars are echoing the same lie that China would dishonor international rule of law in the sense that China does not recognize the award. Even the Philippines has been inconsistent in its respect for international arbitration, holding that the arbitral tribunal's decision in Southern Bluefin Tuna case was wrongly decided. It is questionable whether the Philippines' dishonoring of an arbitral decision amounts to non-compliance of international law. While it is not meant to make a tu quoque argument here, the position of the U.S. shows a clear sign of a double standard.
For its part, the best approach for China to win this battle is to tell its side of the story regarding the general rule versus exceptional rule. There is still a long way to go for China to pierce the legal veil covering American political trickery.
