The Philippines’ legal victory at The Hague was nothing short of historic. Most observers expected a favorable outcome for Manila, but few thought it would be such a clean sweep. The Southeast Asian country secured victory in almost every single claim in its memorial, including the most sensitive items concerning China’s claim of “historic rights,” which underpins Beijing’s sweeping nine-dash line claim throughout the South China Sea.

On almost all its arguments, the Philippines not only convinced the arbitral tribunal to exercise jurisdiction, but to also award a favorable verdict. This means a lot to the Philippines, which has invested the bulk of its diplomatic capital in a years-long but inherently uncertain lawfare effort. The outcome is a vindication of the decision by the Benigno Aquino administration to take the South China Sea disputes to international arbitration shortly after China seized control of Scarborough Shoal.

To the surprise of many ordinary Filipinos, who celebrated the verdict as a moral victory and boost for the rule of law in the oceans, the newly-inaugurated Rodrigo Duterte administration uncharacteristically called for “restraint and sobriety.” Shortly after the verdict was announced, Foreign Secretary Perfecto Yasay, in an extremely subdued and brief speech, simply announced that government experts “are studying the Award with the care and thoroughness that this significant arbitral outcome deserves.”

The seemingly tepid response from the Duterte administration reflects a simmering paradigm shift in Manila’s foreign policy, particularly toward China. Unlike its predecessor, the new government is interested in rehabilitating long-frayed bilateral ties with China in order to avoid military conflict and revive investment relations, particularly in the realm of infrastructure. Two weeks into office, Duterte is confronting a major foreign policy dilemma, excruciatingly caught between a rock and a hard place.

The Ruling Outcome Mapped

The tribunal invalidated Beijing’s claims to historic rights within the nine-dash line and found that Scarborough Shoal and those Spratlys that are above water at high-tide are rocks entitled only to a 12-nautical-mile territorial sea, not islands.

Explore AMTI’s newly released mapping database

De Jure Victory

Some leading experts were concerned that the tribunal would partially water down its ruling in order to prevent a full-fledged estrangement of China, which has engaged in a systematic campaign of delegitimizing and denigrating the arbitration proceedings.

Beijing, which boycotted the whole process, has accused the tribunal of having “failed to be impartial” and behaving in a “careless,” “law abusing,” and “irresponsible” manner.

China aggressively lobbied court officials to dismiss the case, even threatening to withdraw from the United Nations Convention on the Law of the Sea (UNCLOS) altogether. On the diplomatic front, China claimed the support of up to 60 countries in opposing the arbitration case, while announcing earlier this year that it would push ahead with setting up alternative international arbitration bodies.

Though China never formally participated in the proceedings, it tried to undermine the Philippines’ arbitration case by raising objections regarding jurisdiction and admissibility. China questioned the tribunal’s competence to adjudicate issues that Beijing considers fundamentally related to sovereignty, which falls outside the mandate of UNCLOS and arbitral bodies under its aegis. China tried to absolve itself of any responsibility to abide by the ruling by citing exemptions to arbitration over certain types of disputes permitted by Article 298 of UNCLOS. It also accused the Philippines of abusing international law and undermining prior diplomatic agreements by resorting to compulsory arbitration. But all of this was to no avail.

Chinese Arbitration Protest
Pro-China protesters shout slogans as they walk towards Hong Kong’s United States Consulate to protest against the arbitration ruling

The tribunal delivered a legal coup de grâce, not only rejecting China’s jurisdictional arguments, but also declaring its claim of historic rights to be incompatible with prevailing international law. The judged noted “there was no evidence that China had historically exercised exclusive control over the waters or their resources.”

De Facto Challenges

The verdict is binding according to Article 296 of UNCLOS Article 11 of the convention’s Annex VII, but enforcement is a major concern. China has refused to abide by the ruling, declaring it “null and void.” Nonetheless, China has suffered a strategic setback. To begin with, the Philippines’ historic victory has set a tantalizing precedent for neighboring countries such as Vietnam and Indonesia to pursue earlier threats to take China to court.

Moreover, major naval powers such as the United States and Japan could utilize the verdict as a legal justification for more frequent , perhaps even multilateral, freedom of navigation operations
close to Chinese-occupied features in the Spratlys. This is one way to effectively “enforce” the verdict. In addition, non-compliance means that China, a country that claims to be a regional leader and a responsible power, risks being branded as an outlaw. That would be a huge loss to Chinese soft power.

The Duterte administration is more concerned with ensuring that the disputes do not escalate as a result of the arbitration. The new president has expressed his preference for a “soft landing” with China, refusing to taunt the Asian juggernaut by flaunting the verdict.

Meanwhile, he has repeatedly questioned the United States’ commitment to the Philippines. It seems Duterte aims to use the verdict to extract certain concessions from China. In exchange for moderating the official Philippine response to the ruling, Duterte is likely to seek greater access for Filipino fishermen in disputed water, and assurances that China will not establish military facilities on Scarborough Shoal or impose an exclusion zone within the Philippines’ EEZ.

While Duterte shares his predecessor’s strategic objectives to protect Philippine claims in the area, he is opting for a new tactical approach where engagement and direct dialogue with China play a central role. But the Philippine leader is also under tremendous pressure from domestic constituencies, as well as traditional partners like the United States and Japan, to adopt a more robust stance on the arbitration verdict. As the country that initiated the arbitration, it is extremely important for the Philippines to stand its ground and facilitate international efforts to rein in China’s maritime assertiveness.

Given his excellent trust ratings among the electorate and considerable influence over other branches of government, Duterte could withstand any temporary backlash if he opts for engagement and a provisional modus vivendi with Beijing. But this represents a huge foreign policy gamble. His approach could unwittingly embolden a besieged China to up the ante.

About Richard Javad Heydarian

Richard Javad Heydarian is an Asia-based academic, currently a Research Fellow at National Chengchi University (Taiwan), and author of, among other works, The Rise of Duterte: A Populist Revolt against Elite Democracy and The Indo-Pacific: Trump, China, and the New Struggle for Global Mastery.