On 7 July 2014, an Arbitral Tribunal constituted under Annex VII of the United Nations Convention on the Law of the Sea 1982 (the Convention) issued its award in the Bay of Bengal Maritime Boundary Arbitration between the People’s Republic of Bangladesh and the Republic of India, granting approximately 106,613km2 to Bangladesh and 300,220 km2 to India, out of a total relevant area of 406,833km2. The Award provides much needed clarity on the maritime entitlements of both Bangladesh and India.
Like the 2012 decision of the International Tribunal for the Law of the Sea (ITLOS) in the Bangladesh/Myanmar case, a consequence of the delimitation was the creation of a small “grey area” creating potential overlapping entitlements of Bangladesh, India and Myanmar (which was not a party to the arbitration).
While in deciding larger uncertainties over the entitlements of Bangladesh and India the Tribunal created new (albeit smaller) uncertainties over competing sovereign rights in the grey area, the Tribunal’s encouragement of the parties to cooperate in the exercise of their sovereign rights is to be welcomed. There are a number of precedents where states have shared rights in maritime areas to achieve a favourable solution for all parties.
The Award also provides an excellent precedent for the peaceful settlement of maritime boundary disputes and shows how States can de-politicise sovereignty issues and cooperate to achieve political and commercial certainty.
Bangladesh initiated arbitration proceedings under Annex VII of the Convention in October 2009, requesting the Tribunal to identify the land boundary terminus between the two States and to delimit each State’s territorial sea, exclusive economic zone (EEZ) and continental shelf within and beyond 200 nautical miles, where the claims of both States overlapped. Both India and Bangladesh are State Parties to the Convention, which provides a framework for the delimitation of maritime boundaries. Both States accepted the jurisdiction of the Tribunal in accordance with the Convention.
Decision of the Tribunal
The Tribunal delimited the territorial sea between the States in accordance with Article 15 of the Convention. It found that “special circumstances” applied to vary slightly the standard median/equidistance line under the Convention, based on the location of the land boundary terminus, which was determined by the Tribunal by reference to the land boundaries established by a 1947 award rendered by the Bengal Boundary Commission.
EEZ and continental shelf
Articles 74(1) and 83(1) of the Convention provide that delimitation of the EEZ and continental shelf, respectively, “shall be effected by agreement on the basis of international law … in order to achieve an equitable solution”.
India and Bangladesh disagreed on the method to be used achieve an equitable solution. India argued for the application of the “equidistance/relevant circumstances” method, a three-step process in which a provisional equidistance line is (i) identified, (ii) adjusted if relevant circumstances so require, and (iii) examined to ensure that the result is not disproportionate. India considered that no adjustment was necessary. Bangladesh argued that the concave nature of the Bay of Bengal and the instability of the coast to erosion required the application of the “angle-bisector” method, in which the overall direction of each States’ coast is determined and the angle formed by these lines is bisected to produce a boundary line.
The Tribunal found that the “equidistance/relevant circumstances” method was generally preferable unless there were factors which made the application of the equidistance method inappropriate (it found that there were none). It further found that the appropriate method for delimiting the continental shelf within and beyond 200 nautical miles (i.e. within and beyond the EEZ) was the same and adopted the equidistance/relevant circumstances method for both sections of the continental shelf. In order to achieve an equitable result, it ruled that the concave nature of the Bay of Bengal required the adjustment of the provisional equidistance line within and beyond 200 nautical miles of the coast.
The majority of the Tribunal compared the ratio of the relevant maritime space accorded to each State by the boundary to the ratio of the length of the States’ relevant coasts and concluded that the adjusted equidistance line did not produce a disproportionate result. It extended this boundary line until it met the Bangladesh/Myanmar maritime boundary established by the decision of the ITLOS in the Bangladesh/Myanmar case.
While India prevailed on the legal argument, in practice the final adjusted equidistance line decided by the Tribunal deviated only slightly from the angle-bisector line proposed by Bangladesh.
The Tribunal acknowledged that its ruling, combined with the particular geography of the Bay of Bengal, created a so-called “grey area” where Bangladesh had a potential entitlement to the continental shelf but not an EEZ while India had a potential entitlement to both. The Tribunal held that within the grey area, the boundary only delimited the parties’ sovereign rights in respect of the continental shelf and did not otherwise delimit India’s sovereign rights to the EEZ in the superjacent waters. The Tribunal encouraged the States to exercise their rights and perform their duties under the Convention with due regard to the rights the other. It stated that it was for India and Bangladesh to determine the measures they considered appropriate, including through the conclusion of further agreements or the creation of a cooperative arrangement.
Concurring and dissenting opinion of Dr P. S. Rao
One member of the Tribunal, Dr P. S. Rao (who had been appointed by India), issued a separate opinion. Dr Rao concurred with the majority in its finding that the equidistance method was the preferable method of delimitation, but disagreed on the considerations that the majority took into account when adjusting the provisional equidistance line. He also disagreed as a matter of law and policy with the creation of a “grey area” as a result of the delimitation.
The Award confirms that the preferred approach to delimitation of the EEZ and continental shelf is the equidistance line approach and that this should be preferred over the angle bisector approach. The Tribunal’s adoption of the equidistance method reflects the standard practice of international courts and tribunals in this area, though its justification for its choice is of interest. In the Tribunal’s view, the equidistance method was preferable because it clearly separated the steps to be taken by the Tribunal in its consideration of the boundary. In contrast, depicting the relevant coasts as straight lines under the angle-bisector method involved subjective considerations and a decision based on this method did not produce the same structure or degree of transparency as the equidistance method.
The Award is also significant because it followed the decision of the ITLOS in the Bangladesh/Myanmar case in finding that it had jurisdiction to delimit the continental shelf beyond 200 nautical miles where the outer limits of the continental shelf claimed by both states had not already been determined by the Commission on the Limits of the Continental Shelf (CLCS), a body established under Article 76 and Annex II of the Convention. As in the Bangladesh/Myanmar case, both states had made submissions to the CLCS, but the CLCS had deferred consideration of these in view of the dispute between the two States. The Tribunal found that there were no grounds for it to refrain from exercising its jurisdiction and that inaction on the part of the Tribunal would in practice leave the States in a position where they would be unable to benefit fully from their rights over the continental shelf.
The Tribunal also followed approach of the ITLOS in the Bangladesh/Myanmar case by creating a grey area as a result of its delimitation. In effect, the Tribunal in Bangladesh/India created two grey areas, as the Bangladesh/India grey area overlaps with the grey areaestablished in the Bangladesh/Myanmar case, creating a section which potentially contains competing sovereign rights of three different states: Bangladesh has a potential entitlement to the continental shelf and both Myanmar and India have potential entitlements to EEZs.
In deciding larger uncertainties over the maritime boundary and areas of entitlement of Bangladesh and India, the Tribunal therefore created new (albeit smaller) uncertainties over competing sovereign rights in the grey areas. However, the Tribunal’s encouragement of Bangladesh and India to cooperate in the exercise of their sovereign rights (perhaps by joint development or unitisation) is to be welcomed. As the Tribunal noted, the establishment of a maritime area in which states have shared rights is not unknown in international law (for example, Thailand/Malaysia (1990) and Nigeria/São Tomé (2001)).
The wider political and commercial significance of the Award is that it provides clarity on the maritime entitlements of both States. It has been suggested that uncertainty over entitlements may have previously deterred firms from investing in offshore blocks offered by Bangladesh. For example, no bids were placed in PetroBangla’s 2012 offshore licencing round. As the Tribunal noted, “the sovereign rights of coastal States, and therefore the maritime boundaries between them, must be determined with precision to allow for development and investment“.
Both parties have welcomed the Award. Bangladesh stated that it was a “victory of friendship and a win-win situation for the peoples of Bangladesh and India“, while India stated that the decision “paves the way for the economic development of this part of the Bay of Bengal, which will be beneficial to both countries“. The Award provides an excellent precedent for the peaceful settlement of maritime boundary disputes and shows how States can de-politicise sovereignty issues and cooperate to achieve political and commercial certainty.
For further information, please contact Dominic Roughton, Partner, Andrew Cannon, Partner, Harry Ormsby, Associate, or your usual Herbert Smith Freehills contact.