On Nov. 24-30 2015, the Arbitral Tribunal in The Hague conducted its second hearing on the South China Sea dispute between the Philippines and the People’s Republic of China (PRC). The tribunal was established pursuant to Annex VII of the United Nations Convention on the Law of the Sea 1982 (UNCLOS), to which the Philippines and China are parties.

Contrary to public expectations, the tribunal was not intended to solve the core dispute, namely overlapping claims of sovereignty over maritime features in the South China Sea (SCS). Furthermore, as any other international judicial proceeding, the award of the tribunal will only bind the parties in dispute, in this case the Philippines and China. Worse, China has refused to participate in the proceeding or comply with its decision. But why does the case matter for the international community? Why are so many states closely watching the case, including Malaysia and Vietnam, which both claim parts of the SCS, as well as other countries in the region, such as Indonesia, Japan, Singapore and Thailand? Even Australia and the UK, which are geographically far from the SCS, are paying attention to the outcome of the hearing.

The matter submitted to the arbitration itself, which was filed by the Philippines, was carefully drafted in the expectation that it would fall under the jurisdiction of the tribunal.

It was not concerned with sovereignty, which is outside the scope of UNCLOS dispute settlement mechanism, delimitation problems or military activities, which are excluded by China’s refusal to participate or abide by any decisions reached.

However, the tribunal’s decision on the three main issues in the case will have a significant impact on countries in the region, including Indonesia. The first concerns the validity of China’s nine-dash lines claim.

The second issue concerns the maritime status of the claimed areas, namely whether or not they are entitled to Exclusive Economic Zone (EEZ)/Continental Shelf status, territorial waters status or no entitlement at all. The third is the construction activities of China, which are claimed to be damaging the environment.

First and foremost, the tribunal will promote the rule of law in the ocean and UNCLOS compliance by its parties.

States have long negotiated the rule that governs their rights and obligations in the ocean as codified in the UNCLOS, which has been widely accepted as the constitution of the Ocean. Indeed, one of the main purposes of UNCLOS was to create rules to avoid excessive claims by states that would undermine the general interests of the international community.

UNCLOS provides a mechanism for settlement of disputes arising from its interpretation and application and encourages its parties to use that mechanism. The tribunal and its decision will serve as encouragement for states to settle their differences amicably.

For the region and the claimant states, the award will enhance regional stability. It will stipulate the rights and obligations of the littoral states of the SCS.

Furthermore, the decision will clarify some, if not all, the ambiguities surrounding the SCS conflict. The mystery behind the nine-dash lines will be immediately clarified in terms of legality.

Once the ambiguity is removed, the claimants may shift their focus to consolidating the basis of their claims.

Likewise, the determination of the maritime status of the claimed features, be they islands that are entitled to 200 miles, rocks that are entitled to 12 miles, or low tide elevations, which are not entitled to any single zone unless they are part of the territorial sea of a rock or island, will simplify the terms of the conflict.

If the tribunal determines that they are only rocks, which is most likely the case, the claimable maritime zones around those features will not be as excessive as what the nine-dash lines purport.

ASEAN will also benefit from the decision. Some interpretations have been provided by the tribunal’s Oct. 29 decision with regards to the legal status of the Conduct of Parties (DOC) in the SCS as well as the Treaty of Amity and Cooperation (TAC). The tribunal maintains that the DOC and TAC does not deny the parties recourse to other means of dispute settlement, including arbitration.

In fact, this is the exact application of those frameworks, to solve disputes peacefully when negotiations do not work. This legal determination might guide ASEAN in its future deliberations of the issue, especially in crafting the Code of Conduct (COC).

Last but not least, Indonesia may also benefit from the decision. Recently, there was public concern that China would occupy the Natuna Islands, Indonesia’s outermost points in the SCS.

Although Chinese officials have claimed that the country has no competing sovereignty claim over the Natuna Islands, the public remains doubtful. Due to China’s silence about what the dash-line means and the position of the islands on a map, if one does not consider their actual GPS coordinates, the nine-dash lines claim continues to be considered as an encroachment into the Indonesian EEZ.

If the tribunal confirms that the nine-dash lines are legally baseless, or at least do not constitute a delimitation line of the maritime zone, then the long standing firm position of Indonesia that the nine-dash lines do not overlap with its territory will be supported.

Speculation has been rife that Indonesia has an overlapping EEZ claim with the EEZ generated from the Spartly features. If the tribunal confirms that none of the disputed features are entitled to an EEZ/Continental Shelf of their own, it will again affirm Indonesia’s persistent arguments that there is no maritime zone generated by any features in the SCS that may encroach on Indonesia’s EEZ. It is only with Vietnam and Malaysia that Indonesia has to negotiate the boundary of its EEZ.

The much-awaited tribunal decision, which is scheduled to be delivered next year, will be of interest, not only legal scholars and commentators, but also to the SCS claimant states.

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The writers, who are lecturers of international law, attended the Arbitral Tribunal hearing in The Hague. The views expressed are their own.