China’s Defiance Over South China Sea Shows Limits of International Courts

July 12, 2016
2 minutes read

Sequor Law
The Philippines left The Hague in July 2016 with a sweeping win. A tribunal at the Permanent Court of Arbitration found that China had broken international law by building artificial islands to push its territorial claims hundreds of miles into the South China Sea. China's answer was just as blunt. It would not abide by the ruling, it had refused to take part in the proceedings, and it denied that the tribunal held any authority over what it called a territorial dispute.
Forbes asked the obvious follow-up: what is a paper victory worth when the losing side refuses to recognize it? Tara J. Plochocki — today a Partner at Sequor Law and head of the Washington D.C. office — was quoted throughout the piece. The absence of China's consent, she noted, had been visible "from 14 years away": Beijing had signed a 2002 framework to resolve these disputes through negotiation, and it never agreed to let a tribunal decide questions of sovereignty.
The whole story hinges on consent. Nations routinely agree to international arbitration in commercial matters and must live by the outcome. They are reluctant to agree to such arbitration when a dispute touches sovereignty. As the article notes, the United States has done the same thing China did, brushing off the International Court of Justice in the 1980s over Nicaragua and again in the 2000s in a death-penalty case involving a foreign national. Beijing is not the only sovereign to refuse to honor an unfavorable ruling.
For businesses, Plochocki drew a practical line rather than a political one. China, she said, "is not an unreasonable place to do business — you can sign a contract there and have it enforced." Her caveat travels well beyond this case: companies contracting with state-owned enterprises should decide in advance on a dispute-resolution forum those enterprises have actually honored before. A favorable award means little if it lands somewhere the other side can ignore.
Her closing observation captured the distance between winning and collecting. The Hague, she said, often serves as the court of international opinion; enforcing its judgments is a separate fight. The full Forbes article is here: "China's Defiance Over South China Sea Shows Limits Of International Courts."
That distance is the center of Plochocki's work today. At Sequor Law she concentrates on international arbitration and on enforcing arbitral awards and foreign judgments, including against sovereigns and state-owned enterprises that would rather not pay. The South China Sea ruling is the dramatic version of a problem her clients face in quieter forms every day: a judgment is only as good as your ability to enforce it.




