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II Legal Dimensions

"Setting Aside Disputes and Pursuing Joint Development" at Crossroads in South China Sea

Zhang Xinjun

On 22 January 2012, the Philippines initiated Annex VII Arbitration "with respect to the dispute with China over the maritime jurisdiction of the Philippines in the West Philippine Sea (Philippines term for part of the South China Sea)" (emphasis added) through a written notification accompanied by a statement of claim (hereafter "Notification") (DFAP, 2013). On 19 February 2013, the spokesperson of the Chinese Foreign Ministry responded to a question from the press, confirming that China has refused to accept the note and its attached notice and returned it to Manila (MFA PRC, 2013).

There are several factors that explain China's resistance towards settling the dispute through judicial means: remnants of the socialist/ communist ideology, status as a developing country, relative newness to the Euro-centric international legal system, and its experience with the West in the past "Century of Humiliation."1 Despite its position, China is beginning to ease its resistance towards the judicial settlement of international disputes in certain areas. For one, if a dispute arises over the interpretation or application of a treaty with another state party, it agrees to possible resolution of the dispute through judicial process via a "compromissory clause" in that treaty. The clause provides that in such situations, an international court or tribunal may resolve disputes. China's gradual acceptance of the judicial process has been particularly noticed in the field of ocean and sea management. It ratified the 1982 United Nations Convention on the Law of the Sea (UNCLOS) in June 1996, and in doing so accepted a complex dispute-settlement mechanism. The mechanism, in principle, favours an ultimate judicial settlement for disputes concerning interpretation or application of the Convention. It does so, however, with certain limitations and exceptions, which will be discussed in this chapter. Nevertheless, China has always maintained a policy of "setting aside disputes and pursuing joint development" with regard to controversies concerning maritime space. Moreover, it has been extremely averse "internationalisation" of South China Sea disputes. This position has not been seriously challenged until the Philippines initiated arbitral proceedings against China on 22 January 2013.

This chapter deconstructs the legal dimensions of the Chinese policy of "setting aside disputes and pursuing joint development" with special reference to the ongoing arbitration initiated by the Philippines and its implication on dispute settlement in connection with the contested features and maritime space in the South China Sea. For this purpose, it is divided into three sections. The first provides a historic overview of China's "setting aside disputes and pursuing joint development" policy. The next section reviews its implications and implementation in the context of general international law as well as within the UNCLOS dispute settlement mechanism. Essentially, it argues that this policy is in fact compatible with the United Nations' rules. Lastly, it addresses issues of a preliminary nature arising from Filipino invocation of the arbitration case against China in January 2013. The chapter makes some key observations over the legal positions of both parties. It highlights the limitations in the existing legal framework and complexities of the disputes. The article concludes that arbitration does not provide a longterm and lasting solution to the dispute.

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