the MOU. Witnessing the signing are incoming PIArb President Ricardo Ongkiko (left) and PDRC Sec. Gen.
Roberto Dio (right).
The Dispute Resolution Board Foundation (DRBF), Philippine Institute of Arbitrators (PIArb), and the Philippine Dispute Resolution Center signed a Memorandum of Understanding (MOU) on November 11, 2015 formally establishing strategic partnership among them. The signing ceremony was led by to the Atty. Teodoro Kalaw IV, PIArb President, Mr. Gregorio S. Navarro, PDRC President, and Engr. Salvador Castro, Jr., DRBF Country Representative for Philippines and witnessed by members and officers of the three organizations.
In establishing strategic partnership, the MOU provides that the three organizations shall combine their efforts in developing ADR and ADR practitioners, real time avoidance and resolution of local and international disputes relating to construction, commercial and information technology.
Atty. Kalaw, PIArb President, acknowledge the important contribution of Atty. Sit Morallos in pushing the three organizations sign the MOU which symbolic of their commitment to work together to promote and accomplish the common goal of making ADR and the DB effective instruments for dispute resolution.
The MOU signing event, which was hosted by Mr. Navarro PDRC President, was held at the Rizal Boardroom, Navarro Amper and Co., 19/F Net Lima Plaza, 5th Avenue corner 26th Street, Bonifacio Global City, Taguig City.
The Philippine Arbitration Case and China’s Dispute Resolution Culture
Last issue, the author discussed China’s preference for negotiation instead of arbitration and the Confucian roots of such attitude.In this final part, he discusses a shift in this attitude.
But with China’s growing global role and increasing interaction with the international community, there has been a significant shift from its past attitude of shunning participation in international adjudication. The nomination in 1985 of the first Chinese judge to the International Court of Justice (ICJ) since 1949 symbolized the start of this policy shif t, though China still entered a reservation regarding the submission of disputes to the ICJ when it ratified the Vienna Convention on the Law of Treaties in 1997. (Julian Ku, 2012)
In 1990 China joined the convention that created the International Center for the Settlement of Investment Disputes (ICSID) as an arbitration center for investor-state disputes. Though China initially limited its consent to ICSID jurisdiction to disputes over compensation for expropriation, it agreed in 2001 to more expansive arbitrations that included other kinds of unfair treatment by the host state.
China’s ratification of the UNCLOS in 1996 was another key step away from its traditional avoidance of international tribunals, signifying Beijing’s acceptance of consent-based dispute settlement mechanism similar to ICSID. China subsequently submitted a declaration excluding certain kinds of disputes, such as those involving sea boundary delimitation or historic bays and titles, from the jurisdiction of any UNCLOS dispute resolution method.
But it was China’s entr y in the World Trade Organization (WTO) in 2001 following a long process of negotiation that showed a distinct departure from its past attitude. Its WTO accession required the acceptance of compulsory jurisdiction by an independent tribunal, a sign of how important WTO was for China, considering that it expressed reservation on ICJ’s compulsory jurisdiction just four years earlier. The WTO dispute settlement mechanism represented the most intrusive form of international dispute settlement to which China has ever agreed.
In the initial years, China behaved as a conciliatory defendant and reluctant complainant in WTO dispute settlement but there was a turning point in its level of engagement with WTO in 2006 when the US, Canada and the EU jointly filed a complaint against its treatment of imported auto parts. Instead of resorting to conciliation and mediation to settle cases out of court as it has done previously, China decided to litigate the case to its conclusion, thus permitting an international court for the first time to determine the international legality of a domestic measure.
China lost the case, then it appealed but it lost again and eventually agreed to comply with the decision. As one scholar noted, “This episode was the first time China has lost a case in an international dispute proceeding and probably the first time it complied with a final judgment of an international tribunal.” (Marcia Don Harpaz, 2015)
China’s participation in WTO is by far its most extensive experience with international dispute settlement. Since 2002, according to a study, China has been the respondent in 21 proceedings during a period ending in 2013, but it has initiated 11 of its own complaints since lodging its first independent complaint in 2007. Thus, China has remained an active participant in the WTO dispute settlement proceedings. (Julian Ku, 2012)
China’s WTO conduct indicates a major change in its attitude toward international adjudication. It shows that China now accepts WTO dispute settlement as a routine and legitimate means of resolving trade disputes and it no longer considers losing a case to be a sign of political defeat.
This marked shift from China’s past rejection of international adjudication indicates that it has started to accept international norms, with its WTO experience helping to socialize China in other aspects of the international legal order.
But the key question is whether the paradigm shift that is emerging in China’s attitude to international adjudication will carry over to its attitude toward other international tribunals, including the arbitral tribunal handling the Philippine arbitration case at The Hague.
At present, China seems to have adopted a split-level attitude: it draws a sharp distinction between trade and investment disputes on the one hand and boundary disputes (whether territorial or maritime) on the other. It is willing to accept WTO and ICSID dispute settlement rules for the former but still unwilling to submit boundary disputes to ICJ or ITLOS. Viewing territorial and maritime disputes as involving the sensitive issue of national sovereignty and territorial integrity, it still shuns international adjudication on these issues and insists on direct negotiations between the parties involved.
But in a profound sense China faces a crossroads as it awaits the decision of the arbitral tribunal: if the tribunal accepts jurisdiction over the arbitration case and proceeds to the merits of the case, how will it react to a possible unfavorable decision? Will it defy the ruling and risk being condemned by the international community as a rogue state or will it seek a way to comply and abide by international law as a way of demonstrating that it is a peaceful and responsible country?
Only time will tell which path China will choose to take.