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Vietnam Mulls Taking China to Maritime Arbitration Court

HANOI – Following in the footsteps of the Philippines, Vietnam is considering taking China to an international maritime court to resolve a simmering dispute over contested waters in the South China Sea (also known as the East Sea by Vietnam). Vietnamese Prime Minister Nguyen Tan Dung has stated that Vietnam is contemplating a series of measures in response to recent provocative Chinese actions – these include possible legal action, such as filing a case with the Permanent Court of Arbitration at The Hague, located in the Netherlands.

China and Vietnam have longstanding territorial disputes over the South China Sea, however, tensions have escalated dramatically over the past few weeks since China moved a huge deep-sea oil rig to the area and started drilling for energy resources. More than 100 Chinese and Vietnamese ships have been engaged in a tense stand-off near the rig, which is located near Triton Island in the Paracels. China won control of the island group in 1974 following a brief conflict with Vietnam.

Angry Vietnamese mobs have protested the presence of the oil rig by rioting and seriously damaging Chinese and other foreign owned factories in Vietnam.

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Last year, the Philippines responded to what it saw as increasingly aggressive Chinese actions by going ahead with a landmark arbitration case at The Hague. The Philippines wants the tribunal – which rules on disputes related to the UN Convention on the Law of the Sea (UNCLOS) – to declare that China’s so-called “nine-dash line” as invalid. Most Southeast Asian and ASEAN countries are concerned about the line, a demarcation on Chinese maps that suggests Beijing lays claim to most of the South China Sea.

China unveiled a version of the line in 1947, but in 2009 it attached a copy of the line in a formal submission to the UN. Earlier this year, the U.S. asked China publicly for the first time to clarify what the line actually means.

A move by Vietnam to pursue the same course as the Philippines would anger China, which prefers to negotiate bilaterally with countries over such disputes. But the majority of countries in ASEAN, and particularly the Philippines and Vietnam, believe that the only way smaller countries can stand up to China is to internationalize the South China Sea.

Vietnam has also reported that China has asked it “not” to take the case to The Hague yet; however, it appears that China has not put forth any conditions or agreements that would encourage Vietnam to make this decision.

Additionally, China published a report last week from the Chinese Institute of International Studies that claims both the Philippines and Vietnam are attempting to “use” ASEAN in order to stir up trouble for China amongst ASEAN members and also Japan and the United States. The report suggested the Philippines and Vietnam were using ASEAN to “create division and uncertainty”.

The Hague meanwhile has given China until mid-December to respond to the arbitration case brought by the Philippines over Beijing’s claim. China has indicated it intends to ignore participation in the case and that it will ignore any ruling that goes against it.

Any decision taken by the courts against China would be no doubt be a blow to that country’s reputation, but this may not result in a change in behavior since any ruling may well be unenforceable as there are no resources to police compliance of rulings related to the UNCLOS.

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email asia@dezshira.com or visit www.dezshira.com.

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