The 2016 South China Sea Award and the Future of a Legally Binding Code of Conduct

For more than a decade, key ASEAN Member States (AMS) have regarded the formulation of a legally binding Code of Conduct in the South China Sea (COC) as a key objective in its approach to managing tensions in the South China Sea (SCS). Since negotiations formally began in 2018, the pursuit of a legally binding instrument has become an important benchmark for success. It reflects the broader expectation that clearer rules and obligations under the COC could promote greater predictability, reduce the risks of incidents and reinforce a rules-based regional order.

This ambition gained renewed momentum under Indonesia’s 2023 ASEAN Chairmanship, when ASEAN and China agreed to try to conclude negotiations within three years. It has been reinforced by the current Chair, given the Philippines’ call to complete the COC by end-2026. As negotiations enter what could be a decisive phase, that the Code should be legally binding remains one of ASEAN’s foremost objectives.

Yet, a decade after the 2016 South China Sea Arbitral Award, the legal landscape surrounding the COC has become increasingly complex. On the Award’s recent tenth anniversary, China reaffirmed that it rejects the ruling as “illegal, null and void”, maintaining that disputes over territorial issues and maritime delimitation cannot be subject to “imposed solutions” and arguing that the arbitration violated fundamental principles of international law, including state consent, and the 1982 UN Convention on the Law of the Sea (UNCLOS). However, the Award serves as an important legal reference point for some claimant states in advancing their maritime claims under UNCLOS.

This divergence raises the question at the heart of the COC negotiations: If the parties continue to differ over the interpretation and application of UNCLOS, how can a future legally binding COC effectively operate in practice?

ASEAN’s emphasis on a legally binding COC reflects more than a preference for legal form; it represents an effort to move beyond the limitations of the 2002 Declaration on the Conduct of Parties in the South China Sea (DOC). The DOC’s political commitments have helped to establish important norms of behaviour but have proven insufficient to prevent recurring incidents at sea or to fully manage tensions. The norms include a commitment to peacefully resolve disputes without resorting to the threat or use of force and to exercise self-restraint, in activities that could complicate or escalate disputes.

Whether a code is legally binding does not necessarily guarantee its effectiveness. International agreements derive their practical effectiveness not only from being legally binding, but also from having sufficiently clear provisions and workable practical arrangements for their interpretation and application. A case in point is that the 2016 Award has sharpened longstanding differences over the interpretation and application of UNCLOS between China and some AMS, which are reflected in the negotiations over the COC’s geographic scope of application, its relationship to UNCLOS, and its dispute settlement, maritime entitlements and implementation mechanisms. As ASEAN and China work towards a legally binding COC, these unresolved questions raise important issues about how signatories’ obligations would be interpreted, implemented and applied in practice.

The experience of China and AMS with UNCLOS and the 2016 Award offers several lessons for the negotiation of a legally binding COC.

First, while many AMS expect COC parties to be bound by and accountable for their behaviour in the SCS through a binding document, China’s approach to the interpretation, application and dispute settlement provisions of international treaties differs from that of some AMS. China was among the first nations to sign UNCLOS in 1982, after participating in various negotiations from 1973 and generally supporting the positions of developing countries on maritime matters. At present, even though it has not publicly discarded UNCLOS, Beijing now claims most of the SCS’ waters (through its ‘nine-dash line’) and considers the Spratlys as a group of islands with entitlements to their own exclusive economic zones (EEZ). This position differs from that of some AMS as being inconsistent with UNCLOS and invalidated by the 2016 Award.

Thus, China’s continued rejection of the arbitral Tribunal’s jurisdiction and the 2016 Award demonstrates that negotiating parties may continue to differ not only over substantive maritime claims, but also over the interpretation and operation of treaty-based dispute-settlement mechanisms under even significant international treaties like UNCLOS. Such differences are likely to remain relevant to ASEAN’s negotiation on and implementation of the COC.

Second, a legally binding COC could become part of the legal and diplomatic framework within which future disputes are managed. Depending on the final form of its provisions, it may shape how parties pursue dispute settlement and how the COC interacts with other rights and mechanisms available under international law. China’s invocation of the 2002 DOC provision – that disputes would be resolved “through friendly consultations and negotiations by sovereign states directly concerned” to challenge the jurisdiction of the 2016 SCS arbitration (despite the DOC being a political declaration) – illustrates how regional agreements may become relevant in subsequent legal proceedings and diplomatic exchanges. This underscores the importance of clarifying how a future legally binding COC would relate to existing rights and dispute-settlement mechanisms under UNCLOS.

Third, Beijing has consistently maintained a preference for negotiation and consultation with the parties directly concerned, to settle its territorial and maritime disputes. While UNCLOS provides four forums for compulsory dispute settlement: the International Tribunal for the Law of the Sea, the International Court of Justice, an Annex VII arbitral tribunal, and an Annex VIII special arbitral tribunal (for fisheries, environment, research or navigation), it allows State parties to exclude certain categories of disputes (Article 298). China used this opt-out to justify its rejection of the 2016 Award, although the Tribunal reached a different conclusion regarding the scope of the Philippines’ submissions.

Potentially, even if all COC parties agreed on a binding document, the availability and role of tribunal or third-party dispute settlement mechanisms could remain a future point of contention for China. As such, the lesson from the 2016 Award is perhaps not that a legally binding COC is unattainable, but that signatories’ legal commitments, however substantive, are unlikely to be sufficient on their own. To be effective, the COC should also be supported by institutions and processes capable of managing disputes when legal consensus remains elusive. This is particularly important because the COC is not intended to resolve sovereignty or maritime delimitation disputes. Rather, its objectives should be to ensure that disagreements among signatories do not prevent the Code from effectively managing tensions.

This places greater importance on the institutional design of the COC. Beyond substantive commitments, AMS’ negotiators may need to pay greater attention to practical arrangements for implementation, consultation and review, including mechanisms that enable the management of disagreements. Clear procedures for communication, confidence-building and implementation could prove just as important as legal obligations in sustaining the COC’s credibility.

The COC should be assessed against realistic objectives. It is unlikely to resolve sovereignty or maritime delimitation disputes among SCS claimants or to reconcile existing competing interpretations of UNCLOS. Its more achievable contribution lies in reducing risks, encouraging restraint and providing a structured framework through which tensions can be peacefully managed. In that sense, the COC’s success will depend on parties’ legal commitments and whether it provides practical mechanisms for implementation and dispute management.

Editor’s Note:
ASEANFocus+ articles are timely critical insight pieces published by the ASEAN Studies Centre.