Public international law colloquium on maritime dispute settlement

The Award on Jurisdiction recently issued by the Tribunal in the claim brought by the Philippines against China pursuant to Part XV and Annex ViI of the U.N. Convention on the Law of the Sea shows the highest level of scholarship and the dedication of the Members of the Tribunal and their assistants in producing a carefully reasoned and clearly presented text. 

Most impressive is the manner in which the Tribunal has sought to clarify the issues and demonstrate that arguments, initially argued to be rooted in claims of sovereignty over land territory and delimitation of overlapping maritime entitlements and thus excluded from the Tribunal’s jurisdiction by China’s Declaration of 2006 under Article 298 of UNCLOS, were in fact merely disagreements concerning the meaning of terms used to describe maritime features and therefore to be within the scope of the Tribunal’s remit as disputes concerning the interpretation and application of the Convention.

Moreover, notwithstanding China’s resolute opposition to the arbitration, the Tribunal meticulously considered China’s arguments published outside the arbitration and not directed to the Tribunal, dealing with them in the Award even before setting out elements of the Philippine claim against China as the state that initiated the arbitration.

The Award also carefully examines other arguments by China against the Philippine position, including, in particular, that the Philippines had failed to abide by its undertaking given in the context of conferences convened by Association of Southeast Asian Nations (ASEAN), that the Philippines would only seek resolution of its disputes through negotiations with China or other states directly concerned.  The Tribunal finds that the undertaking in question was a “political” one and was thus not one that was necessarily legally binding and in any event that it contained no express promise not to refer such disputes for settlement by an independent third party.
Nor, in the opinion of the Tribunal, should the Philippines’ reference of its dispute with China to arbitration under Part XV of UNCLOS be characterized as an abuse of legal process, a conclusion with which most readers would agree.

Although the Tribunal has acted with care in the unusual circumstances of this case, there are questions that need to be asked regarding its decision to arbitrate the Philippine claim notwithstanding the manifest and resolute opposition of China, which has been cast by the Tribunal in the role of “respondent” and repeatedly referred to as one of the “parties”, despite China’s rejection of 
the entire proceeding.

A state’s consent is essential to a tribunal’s jurisdiction
The Permanent Court of International Justice declared in the Eastern Carelia case: “It is well established in international law that no State can, without its consent be compelled to submit its disputes with other States either to mediation or to arbitration or to any other kind of pacific settlement.” (PCIJ, Ser. B. No. 5, p. 37).

The International Court of Justice confirmed this rule in the Interpretation of Peace Treaties case: “The consent of States Parties to a dispute, is the basis of the Court’s jurisdiction in contentious cases”. (ICJ Reports, 1950, p. 71. See also Nottebaum case ICJ Reports, 1953 p. 122; Monetary Gold case, ICJ Reports     1954, p. 32; Phosphates in Morocco case, PCIJ, Ser. A/B, No. 74, p. 24).

States Parties to a dispute come before the International Court of Justice only if the parties to it agree to that process. Under Article 36 of the Statute of the Court, states may declare that they recognize as “compulsory ipso facto and without special agreement”, in relation to any other state accepting the same obligation, the jurisdiction of the Court in all legal disputes concerning certain specified subjects, (ICJ, Article 36). 
Of the some 195 Members of the Statute of the ICJ, some 71 have made declarations under Article 36, often subject to limitations of various kinds.  Some have made such declarations but have later withdrawn them when they seemed unwarranted in the national political context. 
 

Arbitration and a ‘Default Award’
Arbitration, itself a voluntary procedure, is only subject to rules accepted by the parties to a dispute. Such rules may provide that in situations of “default of appearance” by a party, the Tribunal may, at the request of the other party to the dispute, decide to continue the proceedings and to make its award.  
Thus, Article 9 of Annex VII of UNCLOS entitled “Default of appearance” provides: “If one of the parties to the dispute does not appear before the tribunal or fails to present its case, the other party may request the tribunal to continue the proceedings and to make its award. Absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings. Before making its award, the arbitral tribunal must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.”

An arbitral tribunal may exercise the discretionary power granted to it to “continue proceedings” in the event of “default of appearance” or “absence” of either party to the dispute.  But it may be necessary to consider in greater depth the circumstance “failure to appear” when it results, not from negligence or laxity, but from the fundamentally different circumstance where the absence of a disputing state is caused by publicly stated and manifest withholding of the vital element of consent declared by the International Court of Justice to be the “basis of the Court’s jurisdiction in contentious cases.”

Such circumstance is surely not to be treated a breach of procedural rules of an arbitration merely as an instance of “Default of appearance” in response to which a Tribunal may declare itself entitled to respond by taking what might be considered “disciplinary action” to bridge the consent gap in complying with the request of an understandably impatient claimant state to “continue the proceedings”.
It is likely to be implied in addition that the claimant state would offer to pay the entire expenses of the Tribunal instead of only that share of the expenses apportioned to it by the Tribunal if divided between the disputing states in accordance with Article 7 of Annex VII – a situation which could itself give rise to a variety of concerns.
 

Default of appearance before international courts and tribunals
The International Court of Justice has held that a non-appearing state may nevertheless be treated as a party to proceedings (Nuclear Tests, Australia v. France, Interim Protection, Order of 22 June 1973, ICJ Reports 1973, p. 99); and in Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America) Merits, Judgement ICJ Reports 1986, p. 14) declared that “A State which decides not to appear must accept the consequences of its decision, the first of which is that the case will continue without its participation; the State which has chosen not to appear remains a party to the case, and is bound by the eventual judgement in accordance with Article 59 of the Statute.”

Similar pronouncements by the Court in earlier cases, and more recently by the International Tribunal for the Law of the Sea (eg. in the Arctic Sunrise case, Netherlands v. Russia) have emphasized that non-participation by a State Party in any of the compulsory procedures entailing binding decisions provided for in Section 2 of Part XV, including arbitration, does not affect the jurisdiction of the court or tribunal seized of the case. It cannot be denied, however, that circumstances alter cases and that no court or tribunal has yet had to determine that a State Party to a dispute that has taken an open and principled stand against the assumption of jurisdiction and is not guilty of negligence or deliberately lax behaviour is nevertheless to be dealt with by issue of a judgement against it in default, contrary to the basic principle affirmed and reaffirmed by the International Court of Justice, that “The consent of States parties to a dispute, is the basis of the Court’s jurisdiction in contentious cases.”

In addition, it should be noted that UNCLOS in Section 3 of Part XV (Settlement of Disputes) contains a quite specific condition protective of the effect of a State Party’s declaration under Article 298 “excepting” certain categories of dispute from the applicability of Section 2 on compulsory procedures entailing binding decisions.  Article 298 (2) gives the provision the appearance of a mirror image of Article 36 of the Statute of the ICJ.
 

“Optional” approaches to acceptance of compulsory settlement:  ICJ and UNCLOS
Article 36 of the Statute of the ICJ offers an approach that would enable a state to undertake, subject to conditions, including reciprocity, the compulsory jurisdiction of the Court, UNCLOS offers through Article 298 provisions which could be seen as a mirror image of that approach: whereas Article 36 of the Statute of the ICJ invites States, prior to any dispute arising, to recognize the compulsory jurisdiction of the Court “ipso facto and without special agreement” in all “legal disputes” as therein defined, Section 2 (Compulsory procedures entailing binding decisions) of Part XV of UNCLOS sets forth the general rule that “any dispute concerning the interpretation or application of this Convention shall, where no settlement has been reached by recourse to Section 1 [a list of dispute settlement procedures], be submitted, at the request of any party to the dispute, to the court or tribunal having  jurisdiction under this section”.

Whereas Article 36 of the ICJ Statute invites States at their option, to declare that “they recognize as compulsory ipso facto and without special agreement …. the jurisdiction of the Court”, Section 3 of Part XV of UNCLOS invites States to declare at their option, that they EXCEPT, i.e. DO NOT ACCEPT any one or more of a list of categories of disputes, as subject to “compulsory procedures entailing 
binding decisions”.  

While a dispute not covered by a state’s acceptance of compulsory jurisdiction may only be brought before the ICJ by “special agreement” between the states concerned, under UNCLOS a dispute “excepted” from the operation of Section 2 of Part XV (Compulsory procedures entailing binding decisions) may be subjected to those compulsory procedures only if the “excepting” state were to either withdraw it declaration made under Section 3, or enter into an agreement to submit the dispute to one or other of those procedures.  Did China withdraw its declaration made in 2006? Did China conclude an agreement to submit to the Tribunal’s jurisdiction?
It appears that no such “agreement to submit” was entered into with China before that state was designated as a “Party” in the dispute before the Tribunal administered by the Permanent Court of Arbitration, and invited to participate in an arbitral tribunal whose jurisdiction it had publicly and repeatedly rejected, and from which more importantly, it had deliberately withheld its consent to jurisdiction. The issues thus arising give rise to concern.
 

A World Dispute Resolution Organisation?
It may be useful for those states which do not always favour adversarial approaches to dispute resolution, to develop ways and means of establishing dispute-settlement procedures more nuanced and able to attract the consent of states more generally.  Article 298 of UNCLOS in its paragraph 1 itself offers the option of submitting agreed types of disputes concerning the interpretation or application of specific articles of the Convention to conciliation under Anne V. 

If negotiations between states aimed at resolving a maritime dispute encounter situations that seriously impede progress and undermine confidence in the steps being followed, a procedure of what might be termed “guided negotiation” might be considered whereby the parties agree that jurists of their choice assist the disputing states in their search for equitable and viable solutions. Under such a procedure, no “decision” would be contemplated, only advice that could guide the disputants in reaching agreed solutions.  

Dispute resolution which commences with the aim of bringing parties together and only when that is not practical becomes an “arbitral process”, has been practiced in East Asia for centuries and might be studied with a view to more general adoption.  The Permanent Court of Arbitration, which has been most active in developing procedural rules for adoption in different types of arbitration, could undertake or be given a mandate to develop other types of dispute resolution for states that could offer alternatives to recourse to 
adversarial proceedings.

Perhaps the Administrative Council could consider converting the Permanent Court of Arbitration into a World Dispute Resolution Organisation equipped to advise states and states only, on ways to resolve their disputes, not merely “peacefully”, but also “amicably”. The methods of a new World Dispute Resolution Organisation would consist of discreet and confidential guidance through the applicable law, conferring, where necessary, with both governments’ officials legal advisers and keeping the national media from moving into football fan mode. It would not be the aim of the World Dispute Resolution Organisation to produce a “winner” but instead two states ready to agree on a solution they both consider equitable as the foundation for friendly relations in the future.

(Moragodage Christopher Walter Pinto is an arbitrator in a number of international and interstate arbitrations and a Member of the Institut de droit international. He formerly served as Secretary-General of the Iran-US Claims Tribunal, Legal Advisor to the Sri Lankan Ministry of Defence and External Affairs and Ambassador to the Federal Republic of Germany, Chairman of the Sri Lankan delegation to the Third UN Conference on the Law of the Sea and Chairman of its Negotiating Group on the Seabed beyond national jurisdiction and Member and Chair, UN International 
Law Commission)