A Decade After The South China Sea Ruling: Legal Judgment, Geopolitical Contest, and the Reshaping of Regional Order

Nobuyuki Matsuo
Professor at the Faculty of Economics, Nagoya University of Commerce and Business

The South China Sea territorial dispute involves six countries and territories, each with distinct perspectives and claims, rendering it an inherently highly complex issue.

Yet roughly a decade ago, public discourse surrounding the South China Sea came to be framed predominantly as a binary confrontation between China and the Philippines (excluding the Duterte administration era).

This shift stemmed from January 2013, when the Philippines initiated arbitration proceedings before the International Arbitral Tribunal in The Hague, the Netherlands (hereinafter referred to as the Tribunal, an ad hoc South China Sea Arbitration Tribunal established at Manila’s request), drawing worldwide attention. The Philippines’ petition was filed under the United Nations Convention on the Law of the Sea (UNCLOS).

In July 2016, the Tribunal issued its final award, upholding nearly all of the Philippines’ arguments across 14 out of the 15 formal claims it had submitted.

Western media uniformly covered the ruling as a “total victory for the Philippines” and a “complete defeat for China.”

In the wake of the award, mainstream media repeatedly cited the finding that China’s nine-dash line, which Beijing cites as the basis for its South China Sea territorial claims, lacked legal standing under international law.

Moreover, after China dismissed the ruling as “a scrap of paper,” Western outlets labeled China a country that disregards international law and launched ferocious attacks against it.

Setting aside whether the phrase “scrap of paper” was appropriate, China’s refusal to recognize the award is in fact entirely reasonable.

There are several key justifications. First, the Tribunal generally lacks jurisdiction to adjudicate matters of sovereignty and territorial title, meaning its ruling carries no legally binding force. This principle is enshrined in UNCLOS, the foundational treaty governing maritime international law. Further, upon acceding to UNCLOS in 2006, China submitted a declaration of exclusion under Article 298 of the Convention. Under this reservation, the Tribunal had no authority whatsoever to pass judgment on China’s territorial and sovereign rights.

Additionally, bilateral agreements existed between China and the Philippines on this matter, alongside commitments under the multilateral framework of the Declaration on the Conduct of Parties in the South China Sea (DOC), and negotiations were already underway.

Crucially, China and the Association of Southeast Asian Nations (ASEAN) had been holding continuous talks aimed at upgrading the DOC to a binding Code of Conduct (COC), the next stage of regional maritime governance.

Against this backdrop, the Philippines unilaterally launched arbitration without securing China’s consent. It was therefore only natural for China to reject the proceedings as unacceptable.

As anticipated, the final award contained findings overwhelmingly unfavorable to China.

What is striking, however, is that while Western media seized on the ruling to harshly criticize China, the other five disputing parties refrained from actively wielding the award to condemn Beijing. Even the Philippines, which brought the case, handled the ruling with noticeable reticence.

Leaving mainland China and Taiwan aside, the four other claimant states—Vietnam, the Philippines, Malaysia and Brunei—are all ASEAN members. Logically, they could have united to leverage the award as an opportunity to push back against Chinese influence in the waters, yet no coordinated campaign of that kind materialized.

This outcome can be explained by the award’s multifaceted, contradictory implications.

As noted above, the ruling delivered adverse outcomes for China, but it was by no means an unqualified win for the other claimant nations.

Taiwan’s reaction laid this contradiction bare. On July 21, 2016, the Nikkei Shimbun ran an article headlined Taiwan Outraged as South China Sea Arbitration Ruling Rejects Taiping Island’s Status as an Island, reporting widespread public protests in Taiwan against the verdict; the Nikkei was far from the only media outlet to cover this backlash.

Taiwanese public anger stemmed from the Tribunal’s classification of Taiping Island, which Taiwan authorities administer in actual control, as a rock formation rather than an island under international maritime law.

Taiping Island is the largest land feature within the Spratly Islands. If Taiping Island is ruled not to qualify as an island, then no features in the Spratlys meet the legal definition of an island—meaning no state can claim territorial seas, much less exclusive economic zones (EEZs), around any Spratly feature.

This outcome would completely bar all resource development activities on the island. For Taiwan, which operates an airstrip on Taiping Island, the ruling was utterly untenable.

All claimant countries and territories have pursued various forms of resource development across the Spratlys, and the award threatened to invalidate the legal basis for all such operations, sparking widespread wariness among all stakeholders.

China strongly suspects the ruling, which rejects its claims while undermining the development entitlements of all other parties, was shaped by U.S. strategic ambitions to gain a foothold in the South China Sea. The fact that Taiwanese protest rallies over the verdict targeted the American Institute in Taiwan (AIT) demonstrates that Taiwanese public opinion shared this suspicion.

Prior to the Philippines’ arbitration filing, the South China Sea territorial dispute was confined to China, Taiwan and four Southeast Asian nations. The lawsuit, however, handed the United States an opening to insert itself into regional affairs.

A review of the legal documents the Philippines submitted to the Tribunal reveals that U.S. and British law firms are listed as its legal agents. This is another major reason China believes Washington was pulling the strings behind Manila’s arbitration push.

The transformation of the South China Sea conflict from a China-ASEAN regional disagreement into a global flashpoint coincided precisely with the Obama administration’s intensified Asia shift strategy. Terms such as “Pivot to Asia” and “Rebalance to the Asia-Pacific” remain fresh in readers’ memories.

The intellectual origins of this policy pivot are widely traced to then-U.S. Secretary of State Hillary Clinton’s October 11, 2011 essay America’s Pacific Century, published in Foreign Policy magazine. In the piece, Clinton stated that one of America’s most critical national priorities over the coming decade would be drastically expanding diplomatic, economic, strategic and other forms of U.S. investment across the Asia-Pacific region.

Manila’s somewhat heavy-handed arbitration filing, and the subsequent deterioration of China-Philippines ties, unfolded roughly one year after this landmark U.S. foreign policy reorientation—hardly a coincidence.

While the Philippines’ arbitration petition reshaped and escalated the regional conflict, the award was not entirely without silver linings for China.

Alerted to the risks posed by the Tribunal’s ruling, China and other claimant states and territories abruptly accelerated negotiations to upgrade the DOC into a formal COC. The arbitration award functioned, in effect, as a form of shock therapy for the South China Sea dispute mechanism.

The core motivation behind this accelerated dialogue was to demonstrate that regional parties could resolve disputes autonomously, thereby limiting U.S. room to expand its influence in the waters and preventing further complication of the issue.

Nevertheless, it must be acknowledged that concrete timelines for a full settlement of the conflict remain far out of reach.

Territorial disputes inherently intertwine competition over maritime resources and energy reserves with core national security concerns, leaving all parties with minimal room for compromise—and making negotiated settlements extremely difficult to achieve.

Paradoxically, the very economic interests that stand in the way of compromise may also serve as the most powerful leverage to push all sides toward a binding agreement.

No large-scale maritime development can move forward while the dispute remains unresolved, and UNCLOS explicitly prohibits unilateral resource exploitation in contested waters. In this sense, all parties including China have long engaged in technically non-compliant activities, which have failed to generate broad, shared economic gains.

For the region to unlock its economic potential, all sides must set aside national prestige and unite around shared economic interests.

Within this framework, Japan could potentially play a constructive role by proposing multilateral joint economic development projects for the South China Sea.

Tracing the dispute’s historical roots: Japan controlled the South China Sea during World War II, and following its defeat, the Republic of China—the victorious Chinese government at the time—asserted territorial sovereignty over the waters. Viewed in this historical context, Japan bears a measure of responsibility for the current impasse.

Admittedly, third-party intervention by outside powers is impractical under present circumstances.

Looking further ahead, however, if regional parties move to set aside competing sovereignty claims and prioritize joint resource, energy or tourism development across the South China Sea, a neutral third-party mediator may become necessary to facilitate cooperation.

Any meaningful Japanese engagement in the South China Sea would only be viable under such a cooperative framework—and an absolute prerequisite for this would be an end to the current state of Sino-Japanese tension and confrontation.

(Nobuyuki Matsuo graduated from The University of Tokyo where he completed his doctoral coursework. He is a professor at NUCB and specializes in Asian History and Economy, especially Vietnam.)