Australia’s aversion to compulsory settlement for maritime boundary disputes comes back to bite it

This is a guest post by Professor Andrew Serdy of the The Institute of Maritime Law at the University of Southampton. It builds on a guest lecture he gave to the Aberdeen University Centre for Energy Law. Robert Veal, Senior Research Assistant at the Institute of Maritime Law, contributed to this post. A longer version of this post is available at the Institute of Maritime Law’s website.

The background

The long-running saga over the maritime boundaries between Australia and Timor-Leste has been keeping lawyers for both sides busy. There have been no fewer than four separate legal proceedings in recent years related directly or indirectly to the issue.

One of these is the subject of this post: the invocation by Timor-Leste of compulsory conciliation under Article 298 of the United Nations Convention on the Law of the Sea (UNCLOS) and Annex V to UNCLOS as a means of settling permanently their outstanding boundaries, despite a clause in the 2006 Treaty between Australia and the Democratic Republic of Timor-Leste on Certain Maritime Arrangements in the Timor Sea (CMATS) by which the parties agreed not to invoke such proceedings against each other for 50 years, with particular reference to the ruling by the conciliation commission to reject Australia’s challenge to its competence, delivered on 19 September 2016.  Also tangentially relevant to the conciliation is another of the four proceedings, an arbitration under the 2002 Timor Sea Treaty, in which Timor-Leste seeks a declaration of the invalidity of CMATS on the ground that its conclusion was tainted by the alleged planting of listening devices in 2004 by the Australian Secret Intelligence Service in Timor-Leste’s cabinet room.

Much has been written over the years about the substance of the dispute as to where the maritime boundaries between Australia and Timor-Leste should lie, and the conciliation commission (the Commission) will come up with its own recommendations now that it has rejected the Australian challenge to its competence.  Readers unfamiliar with the arguments on both sides will find them conveniently illustrated by the Timor-Leste and Australian slideshows from the public opening session of the conciliation hearing on 29 August 2016 (which, along with the transcript of that session and the Commission’s preliminary ruling, are the only publicly available documents at the time of writing; in particular, the written pleadings have not been released), but this post is confined to the procedural aspects of the conciliation, which are novel enough in themselves.  Indeed this was the first-ever compulsory conciliation under UNCLOS (or at least the first that has entered the public domain – it cannot be excluded that parties to earlier disputes have settled or attempted to settle them by conciliations which they have agreed not to disclose).

Conciliation as a method of settling disputes

Conciliation has been defined as a procedure in which the disputant parties establish a commission or other body to help resolve their dispute, whose chief task is to examine the dispute impartially and attempt to define the terms of a settlement it thinks likely to be acceptable to the parties. UNCLOS provides for both voluntary (see Article 284) and compulsory conciliation.  The latter is an unusual combination of compulsory procedure with a non-binding outcome, but is occasionally encountered elsewhere, for example the Vienna Convention on the Law of Treaties provides for compulsory conciliation for a small class of disputes arising under it (though again none is known to have actually occurred).

As provided for by Article 3 of Annex V, a five-member conciliation commission was constituted.  Pursuant to Article 3, the party initiating the proceedings appoints two conciliators and the other party does the same.  The four chosen conciliators together in turn nominate a fifth who becomes the chairman.  It comprises HE Ambassador Peter Taksøe-Jensen (Chairman, a former UN Assistant Secretary General for Legal Affairs – I am grateful to a member of the audience at the initial presentation of these thoughts at the Faculty of Law of the Victoria University of Wellington a few weeks ago for pointing this out), Dr Rosalie Balkin (a former Director of the Legal Division and Assistant Secretary-General of the International Maritime Organization, a specialised agency of the United Nations, appointed by Australia), Judge Abdul G. Koroma of the International Court of Justice, appointed by Timor-Leste), Professor Donald McRae (a member of the International Law Commission, a body of experts reporting to the Sixth Committee of the UN General Assembly, appointed by Australia) and Judge Rüdiger Wolfrum of the International Tribunal for the Law of the Sea (ITLOS) established by UNCLOS, appointed by Timor-Leste).  Its decision to uphold its own competence of 19 September 2016 despite the objections put forward by Australia was taken unanimously and will, I suspect, have taken many observers by surprise, myself included, though this is not to say that it is wrong in law.

The relevant law

Australia’s analysis, like my own before the event, took as its starting point Article 4 of CMATS, which remains in force until and unless the Timorese attack on its validity succeeds.  This provision is headed “Moratorium” and provides in pertinent part:

  1. Neither Australia nor Timor-Leste shall assert, pursue or further by any means in relation to the other Party its claims to sovereign rights and jurisdiction and maritime boundaries for the period of this Treaty.


  1. Notwithstanding any other bilateral or multilateral agreement binding on the Parties, […] neither Party shall commence or pursue any proceedings against the other Party before any court, tribunal or other dispute settlement mechanism that would raise or result in, either directly or indirectly, issues or findings of relevance to maritime boundaries or delimitation in the Timor Sea.
  2. Any court, tribunal or other dispute settlement body hearing proceedings involving the Parties shall not consider, make comment on, nor make findings that would raise or result in, either directly or indirectly, issues or findings of relevance to maritime boundaries or delimitation in the Timor Sea. Any such comment or finding shall be of no effect, and shall not be relied upon, or cited, by the Parties at any time.


  1. The Parties shall not be under an obligation to negotiate permanent maritime boundaries for the period of this Treaty.

By Article 12 of CMATS the “period” of this Treaty” referred to above is 50 years from its entry into force, which took place in 2007.  On its face, therefore, there has been a clear breach of Article 4 by Timor-Leste in calling these conciliation proceedings into being.  Nothing in the words of Article 4 suggests that the fact that the proceedings do not have a binding outcome makes any difference in that regard.  Of course, if the Timorese claim in case (1) succeeds, CMATS will have been void ab initio and thus there will have been no breach of it by Timor-Leste after all, but it would be risky for it to rely on that outcome, since that condition has not yet been satisfied, and may never be.

The Commission, however, rejected this approach and instead based its analysis on the dispute settlement provisions within UNCLOS, grouped in Part XV (Articles 279 to 299), since it was to UNCLOS that it owed its own existence.  It said that, having been created under UNCLOS and not under CMATS or the Timor Sea Treaty, it had no authority to decide any secondary claim that there had been a breach of CMATS by Timor-Leste in bringing the primary claim.  Instead, it began with Article 280 of UNCLOS: “Nothing in this Part impairs the right of any States Parties to agree at any time to settle a dispute between them concerning the interpretation or application of this Convention by any peaceful means of their own choice.”  This makes clear that the UNCLOS compulsory mechanism for settling disputes is a default one and can be displaced by agreement of the parties to a dispute, even if what they put in its place is non-compulsory or leads to a non-binding outcome, or both.

Article 280 is one of three relevant provisions in Part XV of UNCLOS for this conciliation.  The effect of making an alternative choice under Article 280 is governed by Article 281, headed “Procedure where no settlement has been reached by the parties”, which is in the following terms:

  1. If the States Parties which are parties to a dispute concerning the interpretation or application of this Convention have agreed to seek settlement of the dispute by a peaceful means of their own choice, the procedures provided for in this Part apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure.
  2. If the parties have also agreed on a time-limit, paragraph 1 applies only upon the expiration of that time-limit.

This is another way of saying that the compulsory procedures of Part XV can still be applied to a dispute if the alternative methods of the parties’ own choice under Article 280 have not led to its settlement, unless the original agreement to contract out of Part XV precludes this.  Article 281 was critical to the result in the Southern Bluefin Tuna arbitration where an arbitral tribunal formed under Annex VII to UNCLOS found by majority that it lacked jurisdiction because the 1993 Convention for the Conservation of Southern Bluefin Tuna procedurally displaced UNCLOS through its optional dispute settlement provision, from which it inferred the exclusion of any further procedure within the meaning of Article 281(1) of UNCLOS, even though the relevant provision of the 1993 Convention was completely silent on the matter.  Sir Ken Keith dissented: his view was that a clear indication of intent to displace UNCLOS would have been needed in the 1993 Convention but was absent there.  This decision has in the main been heavily criticised and has very few supporters, so it was not unexpected when in 2015 a differently composed Annex VII tribunal in the South China Sea arbitration accepted the Philippines’ invitation to depart from the reasoning of the Southern Bluefin Tuna tribunal, deciding that the non-compulsory procedures of the 1992 Convention on Biological Diversity, to which the Philippines and China were both parties,  could not displace Part XV jurisdiction as argued informally by China in a position paper.

The last relevant provision of Part XV of UNCLOS is Article 298.  This creates, in the words of its heading, a series of “[o]ptional exceptions to [the] applicability of section 2”, in other words to Articles 286 to 296 which is where the compulsory procedures are found.  One of the limited number of opt-outs it offers is for maritime boundary disputes:

  1. When signing, ratifying or acceding to this Convention or at any time thereafter, a State may…declare in writing that it does not accept any one or more of the procedures provided for in section 2 with respect to one or more of the following categories of disputes:
  • (i) disputes concerning the interpretation or application of articles 15, 74 and 83 relating to sea boundary delimitations, […] provided that a State having made such a declaration shall, when such a dispute arises subsequent to the entry into force of this Convention and […] no agreement within a reasonable period of time is reached in negotiations between the parties, at the request of any party to the dispute, accept submission of the matter to conciliation under Annex V, section 2; […];

Australia had made such a declaration in 2002, shortly before Timor-Leste’s independence.  Unlike the other opt-outs in the remaining subsubparagraphs, for a subset of excluded disputes this is not the end of the road: no further procedure is available for pre-existing disputes, but for those arising once UNCLOS is in force, compulsory conciliation of the kind represented by these proceedings is contemplated.

The unsuccessful Australian objections

The foregoing provisions collectively enabled the Commission to dismiss each of Australia’s objections made on six distinct grounds, which I paraphrase in the underlined text before commenting on each:

  1. Article 4 of the CMATS Treaty precludes either party from initiating compulsory conciliation under Article 298 of UNCLOS and from engaging in the substantive matters in dispute in such proceedings. As noted above, the Commission took the view that it had no authority to give effect to a treaty other than UNCLOS except where UNCLOS itself dictated this, adopting a narrow reading of Article 293(1), which prescribes the sources of law that a Part XV forum should apply as follows: “A court or tribunal having jurisdiction under this section shall apply this Convention and other rules of international law not incompatible with this Convention.”
  2. The CMATS Treaty falls within the category of “provisional arrangement[s] of a practical nature” specifically contemplated by Articles 74 and 83 of UNCLOS for the situation when a boundary delimiting the parties’ exclusive economic zones and continental shelves respectively remains outstanding, hence the moratorium in CMATS was not displaced by the later entry into force of UNCLOS between the parties, which occurred in 2013 when Timor-Leste acceded to UNCLOS (Australia having been an original party to it since 1994). To the extent that this argument also depended on direct application of CMATS, the Commission declined to give effect to it for the same reason as the first ground.
  1. In 2003 the parties agreed on a mechanism for resolving their boundary dispute, i.e. negotiation. The CMATS Treaty built on that agreement, confirmed negotiation as the method of dispute resolution, and added a time stipulation, namely that the negotiation was not to occur for 50 years.  Accordingly, the Commission’s competence is precluded by UNCLOS Article 281, which recognises the CMATS Treaty as a relevant choice by the parties as to how their dispute is to be settled.  Although this argument is more in tune with Commission’s approach of needing a gateway within Part XV of UNCLOS itself through which the previsions of another treaty can enter into its considerations, the Commission interpreted both Articles 280 and 281 and CMATS strictly: Part XV would in principle yield to any agreement to settle the dispute by some other means, but the moratorium in Article 4 of CMATS was something different: in fact it amounted to an agreement not to settle the dispute for 50 years.  Thus the gate remained shut, and Article 281 proved to be of no use to Australia.
  1. The parties’ dispute over maritime boundaries dates from 2002, before UNCLOS entered into force as between them, so the first condition of Article 298, that the dispute must have arisen “subsequent to the entry into force of this Convention”, was not met. Had this objection succeeded, the failure of the prior ones would not have mattered, since any one objection on its own would have had the desired effect for Australia of putting an end to the conciliation.  But it too failed, in this instance because the Commission interpreted against Australia the ambiguity in the quoted phrase: does it refer to the entry into force of UNCLOS generally, which occurred in 1994, or as between the particular disputants, which did not happen until 2013?  The objection would succeed only under the latter interpretation, but the Commission preferred the former.
  1. Because both Parties have observed the CMATS Treaty, there have not been negotiations on the maritime boundary, which Article 298 requires before resort to its provisions. Accordingly, the second condition of Article 298 is not met.  In this instance the Commission took a broader view of what was encompassed by the term “negotiations” – there clearly had been negotiations on the dispute as a whole, if not, at Australia’s insistence, on the boundary itself.
  1. The dispute is “inadmissible” because Timor-Leste was seeking to seise the Commission in breach of its treaty commitments to Australia, or at the least the Commission should stay the conciliation proceedings until the Tribunal constituted to hear the related arbitration concerning the validity of the CMATS Treaty has reached its decision on that point. The first half of this contention logically would have to suffer the same fate as the first two objections, but under other circumstances – i.e. if the Commission had decided those points differently – there would certainly have been an argument that it would make sense for the conciliation to wait until the fate of CMATS on which Australia was relying had become apparent through the outcome of case (1).

Next steps

So where to from here?  One important consequence of the Commission’s disinclination to apply CMATS is that Australia’s (and my own) contention that Timor-Leste’s initiation of the conciliation was in violation of the Article 4 moratorium remains undetermined, thus leaving Australia free to pursue that claim in whatever ways are open to it.  The obvious solution would be to bring a case of its own against Timor-Leste under CMATS alleging its violation, and to seek by way of remedy an order compelling Timor-Leste to discontinue the UNCLOS proceedings, a kind of international equivalent of an anti-suit injunction.  This, though, is easier said than done.  Although there is a provision of CMATS dealing with dispute settlement, Article 11, all it says, reflecting Australia’s negative attitude towards compulsory settlement of maritime boundary disputes, is: “Any disputes about the interpretation or application of this Treaty shall be settled by consultation or negotiation.”  So, ironically, Australia would need Timor-Leste’s consent to bring a claim against it to seek such an order, which is clearly not going to happen.

This leaves the conciliation to run its course, and the Commission has indicated that it will allow it a year to run.  Australia has announced that it will participate fully, a welcome expression of readiness to follow the UNCLOS procedures which were beginning to show signs of fraying at the edges after the respondents in two recent cases, the Arctic Sunrise and South China Sea arbitrations, refused to take part.  One final ambiguity may need to be resolved once the Commission reports back to the parties: UNCLOS Article 298(1)(a)(ii) states that “…after the conciliation commission has presented its report, which shall state the reasons on which it is based, the parties shall negotiate an agreement on the basis of that report; if these negotiations do not result in an agreement, the parties shall, by mutual consent, submit the question to one of the procedures provided for in section 2, unless the parties otherwise agree[.]”

Here it is not clear which of “shall” and “mutual consent” takes precedence: in other words, would the failure of post-conciliation negotiations pave the way to an ordinary compulsory Part XV case to decide the boundary through a putative oxymoronic obligation of the parties to consent to this?  This would suit Timor-Leste, but is the very thing Australia has been at pains to avoid.  Or are the disputants free to give or withhold their consent as they please, such that only if both of them consent “shall” the question ultimately come before a Part XV forum?  Thus it is by no means beyond the bounds of possibility that yet another case would become necessary a year or so from now to decide this point.

A fuller version of this post is available for download at the Institute of Maritime Law’s website.


Senkakus/Diaoyus: Are They Islands? Yes, No, Maybe

This blog post is by Constantinos Yiallourides, a PhD Candidate at the University of Aberdeen. In this post – the first this blog has hosted from one of our postgraduate community – he considers a point of international law linked to his research. A full biography can be found below.

The Senkaku Islands or Diaoyu Islands, as they are respectively known to the Japanese and Chinese, is a small group of offshore geographical formations lying at the southwest edge of the East China Sea. They are composed of the Uotsurijima/Diaoyu Dao Island and four other smaller islets and three barren rocks; their land amasses to just over six square kilometres. Despite the fact that they are extremely small (the largest island is about 4 square kilometres long by 1.5 wide), they all seem to form natural areas of land, permanently above water at high tide. All the islands are currently uninhabited.

Interestingly, these small, isolated and uninhabited offshore features have served as the most persistent and explosive bone of contention between China and Japan, since the 1970s, when the two countries formally expressed their maritime claims over the islands. The reason lies not on their economic value per se, as no economic activities are currently being conducted on the islands, but rather on their strategic location near areas where substantial quantities of offshore oil and gas are thought to be present. Under the 1982 United Nations Convention on the Law of the Sea (UNCLOS), to which both China and Japan are parties, offshore features qualifying as islands in a legal sense, can generate full maritime zones in the same way as other mainland territory. As a consequence, the significance attached to these islands stems from the perception that their possession can potentially generate extensive areas of maritime jurisdiction capturing the vast marine resources in the surrounding waters and seabed. This close interrelation between an island’s maritime generating capacity and competition over surrounding energy resources has also been evident in the territorial dispute between Argentina and the UK over the Falklands.

Article 121(3) of UNCLOS stipulates two very important conditions for an insular formation to qualify as ‘island’: to sustain ‘human habitation’ or ‘economic life of its own’.  Yet, how can one say with any certainty whether a feature is capable of sustaining human habitation or have the capacity to generate economic life of its own? More importantly, can there be a category of island, in a legal sense, that can have economic life of its own but cannot sustain human habitation, or vice versa?  Finally, would an island which had once been inhabited but have become uninhabited over time, due to persisting adverse economic conditions for example, be deprived of its legal status?

First of all, Article 121(3) refers to the capacity of sustaining human habitation, not simply habitation. Capacity for habitation is arguably a broader condition than actual habitation, meaning that an island must not necessarily be, or have once been, inhabited to be considered as such. The key is to prove the island’s ability to sustain habitation. Clearly, the first objective step to prove this ability is to look at the island’s present or past population. Even though it is not necessary for an island to actually be or have at some point been inhabited to meet the ‘sustain human habitation’ condition, it will certainly be easier to argue that an island can actually sustain human habitation if it has once been inhabited. In addition, the fact that the given population has historically made use of the surrounding waters, e.g. for fishing and mining, may be used to establish the island’s legal status. On this analysis, the St Kilda group of islands off the west coast of Scotland would still be thought of as an island, even though the population left over eighty years ago.

Assuming that there are no solid indications that the island is, or used to be, inhabited, the second practical step is to examine the island’s capacity to sustain human habitation. In that regard, the most vital needs for human survival are arguably food, fresh water, and shelter. Therefore, it may be suggested that the existence of cultivable soil, fresh water and enough space for shelter are the three most critical features of an island that has the ability to sustain human life.

The second requirement provided in Article 121(3) concerns the island’s capacity to ‘sustain economic life of its own’. Similarly to the first requirement, the phrase ‘able to sustain’ suggests that the existence of economic life is not necessary but rather is the presence of resources that can sustain such economic life that is crucial to qualify as island proper. Be that as it may, it is submitted that if natural resources, e.g. fisheries or minerals, are known to be present on the island is enough to reach the threshold of Article 121(3). This view finds some support on the Judgement of the Supreme Court of Norway in the case Public Prosecutor v Haraldson and others, where it was held that the existence of physical opportunities on Abel Island for sustaining some kind of economic life, namely bear hunting, were considered enough to grant the feature the legal status of an island.

Further to the above, the phrase ‘of its own’ indicates that the island itself must be capable of generating the source for its economic life. However, nowhere in the discussions that took place at UNCLOS III was it mentioned that islands must have self-sufficiency. As a matter of fact, it would not always be possible for any state, whether continental or island, to achieve self-sufficiency at every level, whether analysing that from the perspective of (for example) the economy, energy, food or agriculture. Some external support to fully realise the economic potential of an island must be deemed permissible to that end.

Turning now to the contested Senkaku/Diaoyu Islands, it becomes evident that the application of UNCLOS provisions on the matter raises several important questions.

Though there have been some reports of fishermen living occasionally on the larger island of the group, e.g. to find shelter during storms, none of the Senkakus/Diaoyus has ever been permanently inhabited, a fact which may indicate their incapacity to sustain stable human habitation. Nonetheless, despite the absence of stable human habitation on a given island, its intrinsic capacity to sustain human habitation should not be totally excluded. In order however to prove such capacity, it is crucial to demonstrate the presence of other factors on the island, such as fresh water, cultivable soil and enough space to build shelter. In that regard, while some vegetation is reported on the larger island of the group, it seems doubtful that any of them has cultivable soil to enable the production of food to sustain permanent human habitation. Further, none of the Senkaku/Diaoyu Islands seems to have readily accessible fresh water.

The next, and perhaps more complicated question, is whether the Senkaku/Diaoyu Islands satisfy the other requirement stipulated in Article 121(3) UNCLOS, namely, to be capable to ‘sustain economic life of their own’. Would fishing and production of oil from the surrounding waters meet this requirement? The fish stocks in the Senkakus/Diaoyus area are reportedly very significant. The same holds true for hydrocarbon resources in the surrounding seabed. As a consequence, it can be reasonably assumed that the area could potentially sustain an economic life if the surrounding seabed and superjacent waters were to be commercially exploited.

The question which then arises is whether this form of economic life could be considered to be generated by the island ‘of its own’ or if the island plays only a minor role in such economic activities. To that end, some commentators have asked whether it is sufficient for uninhabited islands, such as the islands in question, to have enough strategic economic value, e.g. due to their adjacency to valuable seabed resources, even if they have to import food and supplies from external sources. In other words, can a tiny, isolated and uninhabitable feature be considered as an island simply due to the fact that vast amounts of commercially exploitable hydrocarbon resources are known or suspected to be present in its proximity?

If it is accepted that hydrocarbon resources can justify the requirement of ‘sustaining economic life’ this means that a barren rock could potentially qualify as an island, thus unlocking a bigger maritime space, simply due to the proven or plausible presence of such resources. However, imagine the legal implications if the said hydrocarbons prove to be of lesser quantity or quality that initially expected, hence failing the ‘economic life’ test. Could it ever be admissible, under international law, that the legal status of an insular formation, and the associated maritime entitlements, could be determined solely on the basis of the commercial success, or otherwise, of the resources to which the feature is believed to be adjacent?

Ultimately, it is not altogether clear whether Senkakus/Diaoyus can be classified as islands in a legal sense. The general assumption is that none of the features would be capable of sustaining human habitation or economic life of their own, being very small, with no natural source of water, and very limited vegetation (mostly palm trees). However, any attempt to precisely define the conditions stipulated in Article 121(3) UNCLOS, namely human habitability and economic sustainability, and their application to Senkakus/Diaoyus, must, inevitably, involve a discussion on the functions of technology and economics. By way of example, the reported lack of fresh water on the islands can be immediately overcome through the use of seawater desalination technologies which are increasingly used by states and private corporations to produce fresh water suitable for human consumption or irrigation in places where fresh water is very limited or absent. In addition, Rainwater harvesting (PDF) technologies may be used to collect, store and conserve fresh water, in places where there is no surface water or where groundwater is inaccessible or unfit to drink. Moreover, in relation to the reported absence of cultivable soil on the Senkakus/Diaoyus, greenhouse structures are well known for their ability to effectively bypass shortcomings in the quality of the soil or poor weather conditions and can thereby enable the harvesting of crops or plants even in marginal environments. Ultimately, how can one argue with certainty that an offshore feature cannot ever be inhabited in an age when technology has made it theoretically possible to sustain human life in space stations on Mars?

All these questions lie at the heart of the Japan/China boundary disputes, and they are questions that matter. After all, they have the potential to cause serious discord among neighbours and act as a trigger for military confrontation.


Constantinos Yiallourides is in the third year of his PhD, entitled ‘Joint Development of Offshore Oil and Gas Resources: The Way Forward in Disputed Regions’, which investigates the impact of international maritime boundary disputes on the commercial development of mineral deposits found in contested waters. Recognising the complexity of such disputes, his research examines the legal and commercial settlement mechanisms which would allow the coastal States involved to overcome their boundary disputes and exploit their disputed, or transboundary, marine natural resources in a peaceful and coordinated manner. Constantinos’ research is funded by the Arts and Humanities Research Council, UK.

Constantinos was the Managing Editor of the 2015 edition of the Aberdeen Student Law Review (ASLR) and the Vice-President of the European Law Students’ Association (ELSA Aberdeen).