China's position paper on South China Sea

III. There exists an agreement between China and the Philippines to settle their disputes in the South China Sea through negotiations, and the Philippines is debarred from unilaterally initiating compulsory arbitration

30. With regard to disputes concerning territorial sovereignty and maritime rights, China has always maintained that they should be peacefully resolved through negotiations between the countries directly concerned. In the present case, there has been a long-standing agreement between China and the Philippines on resolving their disputes in the South China Sea through friendly consultations and negotiations.

31. Under the Joint Statement between the People' s Republic of China and the Republic of the Philippines concerning Consultations on the South China Sea and on Other Areas of Cooperation, issued on 10 August 1995, both sides "agreed to abide by" the principles that "[d]isputes shall be settled in a peaceful and friendly manner through consultations on the basis of equality and mutual respect" (Point 1); that "a gradual and progressive process of cooperation shall be adopted with a view to eventually negotiating a settlement of the bilateral disputes" (Point 3); and that "[d]isputes shall be settled by the countries directly concerned without prejudice to the freedom of navigation in the South China Sea" (Point 8).

32. The Joint Statement of the China-Philippines Experts Group Meeting on Confidence-Building Measures, issued on 23 March 1999, states that the two sides reiterated their commitment to "[t]he understanding to continue to work for a settlement of their difference through friendly consultations" (para. 5), and that "the two sides believe that the channels of consultations between China and the Philippines are unobstructed. They have agreed that the dispute should be peacefully settled through consultation" (para. 12).

33. The Joint Statement between the Government of the People' s Republic of China and the Government of the Republic of the Philippines on the Framework of Bilateral Cooperation in the Twenty-First Century, issued on 16 May 2000, states in Point 9 that, "The two sides commit themselves to the maintenance of peace and stability in the South China Sea. They agree to promote a peaceful settlement of disputes through bilateral friendly consultations and negotiations in accordance with universally-recognized principles of international law, including the 1982 United Nations Convention on the Law of the Sea. They reaffirm their adherence to the 1995 joint statement between the two countries on the South China Sea ..." .

34. The Joint Press Statement of the Third China-Philippines Experts' Group Meeting on Confidence-Building Measures, dated 4 April 2001, states in Point 4 that, "The two sides noted that the bilateral consultation mechanism to explore ways of cooperation in the South China Sea has been effective. The series of understanding and consensus reached by the two sides have played a constructive role in the maintenance of the sound development of China-Philippines relations and peace and stability of the South China Sea area."

35. The mutual understanding between China and the Philippines to settle relevant disputes through negotiations has been reaffirmed in a multilateral instrument. On 4 November 2002, Mr. Wang Yi, the then Vice Foreign Minister and representative of the Chinese Government, together with the representatives of the governments of the member States of the Association of Southeast Asian Nations ( "ASEAN" ), including the Philippines, jointly signed the Declaration on the Conduct of Parties in the South China Sea ( "DOC" ). Paragraph 4 of the DOC explicitly states that, "The Parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means ... through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea."

36. Following the signing of the DOC, the leaders of China and the Philippines have repeatedly reiterated their commitment to the settlement of disputes by way of dialogue. Thus, a Joint Press Statement between the Government of the People' s Republic of China and the Government of the Republic of the Philippines was issued on 3 September 2004 during the State visit to China by the then Philippine President Gloria Macapagal-Arroyo, which states in paragraph 16 that, "They agreed that the early and vigorous implementation of the 2002 ASEAN-China Declaration on the Conduct of Parties in the South China Sea will pave the way for the transformation of the South China Sea into an area of cooperation."

37. Between 30 August and 3 September 2011, President Benigno S. Aquino III of the Philippines paid a State visit to China. On 1 September 2011, the two sides issued a Joint Statement between the People' s Republic of China and the Republic of the Philippines, which, in paragraph 15, "reiterated their commitment to addressing the disputes through peaceful dialogue" and "reaffirmed their commitments to respect and abide by the Declaration on the Conduct of Parties in the South China Sea signed by China and the ASEAN member countries in 2002" . The Joint Statement, consequently, reaffirmed Paragraph 4 of the DOC relating to settlement of relevant disputes by negotiations.

38. The bilateral instruments between China and the Philippines repeatedly employ the term "agree" when referring to settlement of their disputes through negotiations. This evinces a clear intention to establish an obligation between the two countries in this regard. Paragraph 4 of the DOC employs the term "undertake" , which is also frequently used in international agreements to commit the parties to their obligations. As the ICJ observed in its Judgment in Bosnia and Herzegovina v. Serbia and Montenegro, "[t]he ordinary meaning of the word 'undertake' is to give a formal promise, to bind or engage oneself, to give a pledge or promise, to agree, to accept an obligation. It is a word regularly used in treaties setting out the obligations of the Contracting Parties .... It is not merely hortatory or purposive" (Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v. Serbia and Montenegro), Judgment of 26 February 2007, I.C.J. Reports 2007, p. 111, para. 162). Furthermore, under international law, regardless of the designation or form the above-mentioned instruments employ, as long as they intend to create rights and obligations for the parties, these rights and obligations are binding between the parties (Cf. Maritime Delimitation and Territorial Questions between Qatar and Bahrain (Qatar v. Bahrain), Jurisdiction and Admissibility, Judgment of 1 July 1994, I.C.J. Reports 1994, pp. 120-121, paras. 22-26; Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v. Nigeria: Equitorial Guinea intervening), Judgment of 10 October 2002, I.C.J. Reports 2002, pp. 427, 429, paras. 258, 262-263).

39. The relevant provisions in the aforementioned bilateral instruments and the DOC are mutually reinforcing and form an agreement between China and the Philippines. On that basis, they have undertaken a mutual obligation to settle their relevant disputes through negotiations.

40. By repeatedly reaffirming negotiations as the means for settling relevant disputes, and by emphasizing that negotiations be conducted by sovereign States directly concerned, the above-quoted provisions of the bilateral instruments and Paragraph 4 of the DOC obviously have produced the effect of excluding any means of third-party settlement. In particular, the above-mentioned Joint Statement between the People' s Republic of China and the Republic of the Philippines concerning Consultations on the South China Sea and on Other Areas of Cooperation of 10 August 1995 stipulates in Point 3 that "a gradual and progressive process of cooperation shall be adopted with a view to eventually negotiating a settlement of the bilateral disputes" . The term "eventually" in this context clearly serves to emphasize that "negotiations" is the only means the parties have chosen for dispute settlement, to the exclusion of any other means including third-party settlement procedures. Although the above-mentioned bilateral instruments and Paragraph 4 of the DOC do not use such an express phrase as "exclude other procedures of dispute settlement" , as the arbitral tribunal in the Southern Bluefin Tuna Case stated in its Award, "the absence of an express exclusion of any procedure ... is not decisive" (Australia and New Zealand v. Japan, Award on Jurisdiction and Admissibility, 4 August 2000, p.97, para. 57). As discussed earlier, in respect of disputes relating to territorial sovereignty and maritime rights, China always insists on peaceful settlement of disputes by means of negotiations between the countries directly concerned. China' s position on negotiations was made clear and well known to the Philippines and other relevant parties during the drafting and adoption of the aforementioned bilateral instruments and the DOC.

41. Consequently, with regard to all the disputes between China and the Philippines in the South China Sea, including the Philippines' claims in this arbitration, the only means of settlement as agreed by the two sides is negotiations, to the exclusion of any other means.

42. Even supposing that the Philippines' claims were concerned with the interpretation or application of the Convention, the compulsory procedures laid down in section 2 of Part XV of the Convention still could not be applied, given the agreement between China and the Philippines on settling their relevant disputes through negotiations.

43. Article 280 of the Convention states that, "Nothing in this Part impairs the right of any States Parties to agree at any time to settle a dispute between them concerning the interpretation or application of this Convention by any peaceful means of their own choice." Article 281 (1) provides that, "If the States Parties which are parties to a dispute concerning the interpretation or application of this Convention have agreed to seek settlement of the dispute by a peaceful means of their own choice, the procedures provided for in this Part apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure."