The Verdict

The Court has given a decisive ruling in favour of The Philippines by upholding all the latter’s contentions, though there is no mechanism to enforce the judgment.

• On the question of China’s historic rights in the sea and validity of its ‘nine-dash line’, the Court has unequivocally maintained that “as between the Philippines and China, there was no legal basis for China to claim historic rights to resources, in excess of the rights provided for by the Convention [UNCLOS], within the sea areas falling within the ‘nine-dash line’.”
• Thus, the Court has investigated and rejected the historical and legal validity of the ‘nine-dash line’, which, in a way, quashes China’s sovereign claims.

Impact

In the short-term, in reaction to what is being widely perceived as “reputational damage” for it, China may adopt knee-jerk and aggressive posturing in the South China Sea.

• Domestic political compulsions may also force the Chinese government to show a defiant face to the other claimants in the maritime territorial disputes in the South China Sea, and particularly to the US –– a security guarantor in the region for claimants such as the Philippines.
• In the medium to long-term, the ruling may even prove a turning point in the overlapping maritime disputes.
• It may compel introspection in China and make it take a more reasoned view of its claims in the medium term.
• China’s call for bilateral negotiations may be indicative of such a possibility. However, whether the ruling will eventually pave the way for China’s climb-down or it will further complicate the situation needs to be monitored.
• China, which is integrated with the international order and holds a leadership position in many global and regional institutions such as the UNSC, the East Asia Summit (EAS) and the RCEP process, cannot display its 1950s and 60s vintage hostility towards international institutions.
• Pushing its point against the Court would have an adverse reflection on China’s global standing.

India’s Response

• The Indian reaction to the verdict was very measured and nuanced.
• The wordings of the statement have been carefully crafted. It says that “India has noted the award” of the tribunal and then goes on to state India’s oft repeated position of supporting freedom of navigation and over-flight in the region.
• It calls upon the states involved to resolve disputes peacefully and not escalate tensions.
• It then states that “Sea lanes of communication passing through the South China Sea are critical for peace, stability, prosperity and development.
• As a State Party to the UNCLOS, India urges all parties to show utmost respect for the UNCLOS, which establishes the international legal order of the seas and oceans.”
• This is in total concordance with India’s stated position on the issue.
• In fact, India’s total and graceful acceptance of a similar arbitration proceedings between it and Bangladesh, which according to some observers did not go fully in its favour, was in fact a manifestation and demonstration of that position.

What is the Significance for India?

• More than 55% of India’s trade passes through Straits of Malacca which opens into SCS and India has a stake in ensuring freedom of navigation and overflight.
• India is also worried about the expansion of the Chinese navy which now regularly sends ships right up to the Gulf of Aden in the name of maintaining security.
• One of its nuclear-powered submarine even docked in Sri Lanka a few years ago.
• Both US and India realise that unchecked Chinese belligerence in South China Sea will also impact the security situation in the Indian Ocean where India has the advantage of geography.