Opening Remarks by Director-General XU Hong at the Press Conference on the "South China Sea Arbitration"

12 May 2016

Dear friends from the media,

Dear colleagues:

Good morning. I am very glad to take this chance to talk face in face with everybody here on international law issues relating to the South China Sea Arbitration.

Recently, it is reported that the Arbitral Tribunal established at the unilateral request of the Philippines on the South China Sea will soon issue its Award. I know you are paying close attention to the outcome and how the Chinese Government will react to the decision. China has made it clear on various occasions that because the Arbitral Tribunal clearly has no jurisdiction over the present arbitration, the decision to be made by such an institution that lacks the jurisdiction to do so is accordingly non legally binding, and consequently there is no such thing as the recognition or implementation of the Award. Some people wonder whether China's position above is consistent with international law. Today, I would like to elaborate on China's position from the international law perspective. For many of you, my friends, it may feel boring to listen to the law stuff, but we need some spirit of specialization if we want to discuss international law, don't we? 

Before answering questions you may raise, I will make a general introduction to the scope of the Arbitral Tribunal's jurisdiction.  

Compulsory arbitration is an innovative procedure for peaceful dispute settlement established by the United Nations Convention on the Law of the Sea (the UNCLOS/the Convention). As you may know, to settle international dispute by peaceful means is one of the fundamental principles of international law. However, it should be noted that there are a variety of means to settle disputes peacefully, and compulsory arbitration is merely one of them. Compulsory arbitration is subsidiary and complementary to negotiation and consultation, and its application is subject to several preconditions. Simply put, there are at least four such preconditions.

First, compulsory arbitration can only be applied to settle disputes concerning the interpretation and application of the Convention. If the subject matters are beyond the scope of the UNCLOS, the disputes shall not be settled by compulsory arbitration. The issue of territorial sovereignty is one such case. Consequently States shall not initiate compulsory arbitration on disputes concerning it; and even if they do, the arbitral tribunal has no jurisdiction over them.

Second, a State Party to the UNCLOS may declare in writing that it does not accept compulsory arbitration with respect to disputes concerning maritime delimitation, historic bays or titles, military and law enforcement activities, etc. Such exclusions are effective for other States Parties. With respect to disputes excluded by one party, other parties to the dispute shall not initiate compulsory arbitration; and even if it does, the arbitral tribunal has no jurisdiction over them.

Third, if parties to a dispute have agreed on other means of settlement of their own choice, no party shall unilaterally initiate compulsory arbitration; and even if it does, the arbitral tribunal has no jurisdiction over the disputes.

Fourth, parties to a dispute are obliged to first exchange views on the means of dispute settlement. Failing to fulfill this obligation, they shall not initiate compulsory arbitration; and even if they do, the arbitral tribunal has no jurisdiction over the disputes.

The above four preconditions act as the "four bars" for States Parties to initiate compulsory arbitration, and for the arbitral tribunal to establish its jurisdiction. They form a part of the package system of dispute settlement, which shall be interpreted and applied comprehensively and in its entirety. 

If we apply the above preconditions to the arbitration unilaterally initiated by the Philippines, it is not difficult to see that the Philippines, by initiating the arbitration, has violated international law in at least four aspects, which amounts to abuse of procedures. First, the essence of the subject-matter of the arbitration is territorial sovereignty over several maritime features in the South China Sea, which does not concern the interpretation or application of the Convention. Second, even assuming some of the claims were concerned with the interpretation and application of the Convention, they would still be an integral part of maritime delimitation, which has been excluded by China through its 2006 Declaration and consequently is not subject to compulsory arbitration. Third, given that China and the Philippines have agreed to settle their disputes in the South China Sea through negotiation, the Philippines is precluded from initiating arbitration unilaterally. Fourth, the Philippines failed to fulfill the obligation of exchanging views with China on the means of dispute settlement.

For the reasons set above, the present arbitration should not have come into existence from the very beginning. In 2014, the Chinese Government issued the Position Paper  and elaborated in detail from an international law perspective why the Tribunal lacks jurisdiction in the present case.

However, the Tribunal is neither just nor objective, but distorts provisions of the Convention to entertain the claims of the Philippines. In violation of the fundamental principle that the jurisdiction shall be established based on facts and law, the Arbitral Tribunal concluded that it had jurisdiction over the Phinllipines' claims, which is neither convincing nor valid in international law. China certainly does not recognize it. The opinions made by the Tribunal, as an institution that manifestly lacks jurisdiction and should not exist in the first place, are personal views of the arbitrators at best and are not legally binding, not to mention recognition or implementation.

I will stop here andl take your questions. Thank you!