What you need to know about the arbitral tribunal's ruling

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Metro Manila (CNN Philippines) — After seven months of deliberation, an international panel of judges unanimously ruled in favor of the Philippines in a 3-year-old case against China's claims to virtually all of the South China Sea.

The Arbitral Tribunal at the Permanent Court of Arbitration in The Hague released a 479 page “Award,” or ruling, that shot down China's claim that it has historically exercised exclusive control over the waters within its "nine-dash line" boundary. The five-member panel also found that China had caused "severe harm" to the marine environment because of its land reclamations.

The Tribunal's “final and binding” decision was based on documents from the Philippines and China, records of the United Nations, and jurisprudence on international maritime cases.

The judgment revolves around United Nations Convention on the Law of the Sea, or UNCLOS — an international treaty that sets the limits of countries' territorial waters and guidelines for the use of marine resources. The Philippine and China are signatories to the treaty.

Among other things, UNCLOS provides countries with a 200 nautical mile-Exclusive Economic Zone measured from their coasts. Countries have the sole right to fish, mine, drill or use other resources within their respective zones.

China refused to accept the tribunal's jurisdiction and participate in the proceedings. It published a "Position Paper" in December 2014 that elaborated on its claims and explained why the tribunal has no jurisdiction over the case. “The essence of the subject-matter of the arbitration is the territorial sovereignty over several maritime features in the South China Sea, which is beyond the scope of the Convention and does not concern the interpretation or application of the Convention.”

However, the Tribunal cited Annex VII of UNCLOS which states that the absence of a party or the failure of a party to defend its case shall not stop the proceedings.

China's nine-dash line

In its position paper, China claimed it has historic rights over the area demarcated by its nine-dash line, saying it "was the first country to discover, name, explore and exploit the resources of the South China Sea Islands and the first to continuously exercise sovereign powers over them."

The judges ruled such rights have been "extinguished" because these were "incompatible" with the EEZs under UNCLOS. Scarborough Shoal and the Spratly Islands are beyond China's EEZ.

"The Tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the 'nine-dash line'," the ruling said.

Status of land formations

According to UNCLOS, countries' maritime entitlements are determined by their land formations.

Those that are submerged during high tide do not have entitlements. Land formations that stay above water during high tide but cannot sustain human life are called rocks, and are entitled to a 12-nautical mile territorial sea. Land formations that can naturally sustain either a stable community of people or economic activity are regarded as islands entitled to a 200-nautical mile EEZ.

The judges found that certain reefs claimed by China — which are supposed to be submerged during high tide – have been heavily modified through land reclamations and construction. Although Chinese personnel have subsequently occupied what have become artificial islands, the judges ruled that these modifications do not reflect the "natural conditions” and cannot generate an EEZ.

"The Tribunal found that it could — without delimitating a boundary — declare that certain areas in the Spratly Islands are within the Philippines' EEZ," the ruling said.

Chinese actions in PH's EEZ

The Tribunal ruled that certain areas within the South China Sea, including Mischief Reef and Second Thomas Shoal, "all fall within areas where only the Philippines possesses possible entitlements to maritime zones under the Convention (UNCLOS)."

"The relevant areas can only constitute the exclusive economic zone and continental shelf of the Philippines. Accordingly, the Philippines — and not China — possesses sovereign rights with respect to resources in these areas," it said.

The Tribunal found China to have "violated the Philippines' sovereign rights in its exclusive economic zone" by:

- Interfering with fishing and petroleum exploration

- Constructing artificial islands

- Failing to prevent Chinese fishermen from fishing in the zone

The judges said that fishermen from the Philippines, like those from China, traditionally fished at Scarborough Shoal but that China had restricted access by Filipinos to this fishing ground.

They also said "Chinese law enforcement vessels had unlawfully created a series risk of collision when they physically obstructed Philippine vessels." These acts violated international regulations to prevent collisions at sea, the judges said.

China's 'harm to marine environment'

The Tribunal said the protection and preservation of the marine environment is a hallmark of UNCLOS and countries are obliged to “promote the peaceful uses of the seas and oceans, the equitable and efficient utilization of their resources, the conservation of their living resources, and the study, protection and preservation of the marine environment."

The Tribunal, however, found that China's land reclamation and construction of artificial islands in the Spratlys severely harmed the coral reef environment. It also said that Chinese authorities did not stop Chinese fishermen from harvesting endangered sea turtles, corals, and giant clams on a substantial scale in the South China Sea.

China's 'aggravation of dispute'

The Tribunal also said China's large-scale land reclamation and construction of artificial islands undermined ongoing dispute resolution proceedings. It reminded China to refrain from aggravating its disputes with other countries while they are trying to settle their differences.