Facts:

On 22 January 2013, the Republic of the Philippines instituted arbitral proceedings against the
Peoples Republic of China under Annex VII to the United Nations Convention on the Law of
the Sea with respect to the dispute with China over the maritime jurisdiction of the Philippines in
the West Philippine Sea. On the following month, February 19 2013, China presented a Note
Verbale to the Philippines in which it described the Position of China on the South China Sea
issues, and rejected and returned the Philippines. In this Specific case the Permanent Court of
Arbitration acts as Registry in this arbitration. After more than 3 years of debating in this case the
Permanent Court of Arbitration has already came up with the decision. The following are the
arguments of both Philippines and china over their claim on the West Philippine Sea which is
also known as the South China Sea.

First, China claims that the West Philippine Sea belong them through historical rights, China
claims that the South China Sea has belonged to them for over many centuries ago. In this sense
China claim that they have historical rights over the disputed Sea. As a response to this claim the
Philippines argued that China is not entitled to exercise what it refers to as 'historic rights' over
the waters, seabed, and subsoil beyond the limits of its entitlements under the Convention.
Furthermore, phillippines also argued that the historical rights have no bearing on sea disputes
under UNCLOS and that the UNCLOS "extinguished all historical rights of other states."

Second, China claims that the West Philippine Sea or the South China Sea belongs to them
because it is included in their 9 dash line demarcation which is based on its historical rights. As a
response to this claim, Philippines argued that the so-called 9-dash line has no basis whatsoever
under international law insofar as it purports to define the limits of Chinas claim to 'historic
rights. In addition, they also assert that the 9-dash line is baseless under UNCLOS. This UN
convention allows an EEZ, not a 9-dash line.

Third, Under e United Nations Convention on the Law of the Sea (UNCLOS), habitable islands can
generate a 200-nautical-mile exclusive economic zone or EEZ. China describes some features in
the South China Sea as islands and one of these is Panatag Shoal which is also known as the
Scarborough Shoal which a rocky sandbar which in this sense China claims these supposed
islands belongs to them. Furthermore, China also claims that these "islands" generate an EEZ,
which could overlap with the EEZ of the Philippines. In addition, china also pointed out that
problem for the Philippines is, China declared in 2006 that it "does not accept" arbitral
jurisdiction when it comes to overlapping EEZ and by doing so China said to the tribunal at The
Hague that it has no right to hear the Philippine case because it supposedly involves overlapping
EEZs.

As a response, Philippines argues that the various maritime features relied upon by China as a
basis upon which to assert its claims in the South China Sea which is also known as the West
Philippine Sea are not islands that generate entitlement to an exclusive economic zone or
continental shelf. Rather, some are 'rocks' within the meaning of Article 121, paragraph 3; others
are low-tide elevations; and still others are permanently submerged. As a result, none are
capable of generating entitlements beyond 12 nautical miles and some generate no entitlements
at all. Chinas recent massive reclamation activities cannot lawfully change the original nature
and character of these features. In addition, China has no EEZ that overlaps with the
Philippines' EEZ in the Scarborough area and that China's reclamation activities cannot "lawfully
change" rocks into islands.

Fourth, China claiming that the West Philippine Sea or the South China Sea belongs to their
Territory prevents Filipinos from fishing in the West Philippine Sea. While in fact the UNCLOS,
on the other hand, gives Filipinos the exclusive rights to fish within the Philippines' EEZ in the
disputed waters. As a response, Philippine argues that the China has breached the Convention
by interfering with the Philippines exercise of its sovereign rights and jurisdiction."

Lastly, Damage to environment China has irreversibly damaged the regional marine
environment, in breach of UNCLOS, by its destruction of coral reefs in the South China Sea,
including areas within the Philippines EEZ, by its destructive and hazardous fishing practices,
and by its harvesting of endangered species." As a response, Philippines argued that Chinas
act of building artificial islands in the West Philippine Sea have buried and destroyed 311
hectares of coral reefs which is around 7 times the size of Vatican City which leads to P4.8
billion ($106.29 million) in lost economic benefits. Furthermore, China is also accused of
poaching.

Issue: Whether or not the West Philippine Sea which is also known as the South China Sea is
belongs to Chinas territory.

Held: NO, because of the following arguments:

The Tribunal concluded that, to the extent China had historic rights to resources in the waters of
the South China Sea, such rights were extinguished to the extent they were incompatible with the
exclusive economic zones provided for in the Convention.

The Tribunal also noted that, although 2 Chinese navigators and fishermen, as well as those of
other States, had historically made use of the islands in the South China Sea, there was no
evidence that China had historically exercised exclusive control over the waters or their
resources.

The Tribunal concluded that there was no legal basis for China to claim historic rights to
resources within the sea areas falling within the nine-dash line.

(2)Status of Features:

The Tribunal noted that the reefs have been heavily modified by land reclamation and
construction, recalled that the Convention classifies features on their natural condition, and relied
on historical materials in evaluating the features.

The Tribunal found historical evidence to be more relevant and noted that the Spratly Islands
were historically used by small groups of fishermen and that several Japanese fishing and guano
mining enterprises were attempted.

The Tribunal concluded that such transient use does not constitute inhabitation by a stable
community and that all of the historical economic activity had been extractive. Accordingly, the
Tribunal concluded that none of the Spratly Islands is capable of generating extended maritime
zones.

The Tribunal also held that the Spratly Islands cannot generate maritime zones collectively as a
unit. Having found that none of the features claimed by China was capable of generating an
exclusive economic zone, the Tribunal found that it couldwithout delimiting a boundary
declare that certain sea areas are within the exclusive economic zone of the Philippines, because
those areas are not overlapped by any possible entitlement of China.

(3)Lawfulness of Chinese Actions:

Having found that certain areas are within the exclusive economic zone of the Philippines, the
Tribunal found that China had violated the Philippines sovereign rights in its exclusive
economic zone by (a) interfering with Philippine fishing and petroleum exploration, (b)
constructing artificial islands and (c) failing to prevent Chinese fishermen from fishing in the
zone.

The Tribunal also held that fishermen from the Philippines (like those from China) had
traditional fishing rights at Scarborough Shoal and that China had interfered with these rights in
restricting access.

The Tribunal further held that Chinese law enforcement vessels had unlawfully created a serious
risk of collision when they physically obstructed Philippine vessels.

(4)Harm to Marine Environment:

The Tribunal considered the effect on the marine environment of Chinas recent large-scale land
reclamation and construction of artificial islands at seven features in the Spratly Islands and
found that China had caused severe harm to the coral reef environment and violated its
obligation to preserve and protect fragile ecosystems and the habitat of depleted, threatened, or
endangered species.

The Tribunal also found that Chinese authorities were aware that Chinese fishermen have
harvested endangered sea turtles, coral, and giant clams on a substantial scale in the South China
Sea (using methods that inflict severe damage on the coral reef environment) and had not
fulfilled their obligations to stop such activities

(5)Aggravation of Dispute:

Finally, the Tribunal considered whether Chinas actions since the commencement of the
arbitration had aggravated the dispute between the Parties.

The Tribunal found that it lacked jurisdiction to consider the implications of a stand-off between
Philippine marines and Chinese naval and law enforcement vessels at Second Thomas Shoal,
holding that this dispute involved military activities and was therefore excluded from
compulsory settlement.

The Tribunal found, however, that Chinas recent large-scale land reclamation and construction
of artificial islands was incompatible with the obligations on a State during dispute resolution
proceedings, insofar as China has inflicted irreparable harm to the marine environment, built a
large artificial island in the Philippines exclusive economic zone, and destroyed evidence of the
natural condition of features in the South China Sea that formed part of the Parties dispute.