OP-ED: NAVIGATING SHARED WATERS -THE COMPLEXITIES OF THE 2016 ARBITRAL RULING WITHIN ASEAN DIPLOMACY

by Professor Dr Salawati Mat Basir & Kat W. Wong

As the ten-year anniversary of the Permanent Court of Arbitration (PCA) award under Annex VII of United Nations Convention on the Law of the Sea (UNCLOS) approaches in July 2026, the diplomatic atmosphere in Southeast Asia is charged with anticipation and to some, anxiety. The Philippines which currently holds the 2026 chairmanship of the Association of Southeast Asian Nations (ASEAN) naturally seeks to leverage this milestone to fortify a rules-based order in the South China Sea where it has many experiences of confrontation with naval vessels from China.

Manila’s desire to embed the principles of the 2016 ruling which decisively invalidated China's expansive "nine-dash line" into the regional agenda is both legally sound and entirely understandable given the escalating pressures it faces within its own Exclusive Economic Zone (EEZ). The Philippines may mark the anniversary of the landmark decision this year within the commemorative activities of the 50th anniversary of the Treaty of Amity and Cooperation in Southeast Asia (TAC).

While it is entirely within the Philippines’ sovereign right to assert and defend its legal position in the South China Sea, translating this legal victory into a unified ASEAN mandate through declarations on maritime borders and hardcoding UNCLOS into the   South China Sea Code of Conduct (COC) negotiations may be more complicated than expected. It would introduce a profound layer of diplomatic awkwardness for neighbouring claimant states, particularly Malaysia which also has a contesting claim on overlapping maritime borders with the Philippines.

For Malaysia, the issue relating to South China Sea is complex and requires deep consideration of both national interests and the need to maintain good relations with ASEAN members and major powers seeking to protect freedom of navigation in the region.

The friction for Malaysia does not stem from a disagreement over the validity of international law or the United Nations Convention on the Law of the Sea (UNCLOS). Indeed, Putrajaya implicitly benefits from the PCA’s legal dismantlement of China's historic claims which overlap significantly with Malaysia's own maritime entitlements off the coasts of Sabah and Sarawak. Rather, the awkwardness arises from a stark divergence in strategic methodology. While Manila has opted for public assertion and legal confrontation, Malaysia has meticulously cultivated a strategy of quiet diplomacy and deliberate non-escalation.

Reconciling these two approaches within the consensus-bound halls of ASEAN represents one of the most delicate diplomatic manoeuvres of the decade.

The PCA ruling in favour of the Philippines does not legally imply that the specific claims become binding on other ASEAN members, but should it be brought up as a point for ASEAN declaration, then Malaysia may be caught in a precarious spot.

If the Philippines uses its 2026 chairmanship to demand a Code of Conduct in the South China Sea (COC) strictly anchored in the 2016 tribunal's findings, would it then erode the legal claims by countries such as Malaysia, Vietnam and Brunei on the overlapping areas? Should ASEAN then take a step back and avoid pushing a common position based too heavily on one country's specific legal victory which could undermine their own independent efforts to defend its respective maritime areas through its preferred diplomatic channels?

The Divergence of Diplomatic Doctrines

To understand Putrajaya’s discomfort, one must first appreciate the architecture of Malaysia’s foreign policy. For decades, Malaysia has managed its overlapping claims with Beijing through strict compartmentalization. Putrajaya views its relationship with China as a multifaceted tapestry where the South China Sea dispute is a complex matter, albeit a serious one. By keeping maritime grievances largely out of the public domain and relying on bilateral diplomatic notes, Malaysia ensures that border frictions do not contaminate its vital economic ties with its largest trading and investment partner. This approach also gives Malaysia more room to manage nationalist sentiments in the country.

If the Philippines elevates the PCA ruling to the top of the ASEAN agenda, it effectively forces the South China Sea issue out of Malaysia's preferred bilateral, closed-door channels and into the glaring spotlight of multilateral confrontation. For Malaysia, this high-visibility approach carries inherent risks. It pressures Putrajaya to take a vocal, public stance that contradicts its carefully calibrated "hedging" strategy. Malaysia is deeply committed to avoiding any perception that it is participating in any coalition designed to contain China fearing that such posturing would inevitably transform the region into an arena for great power proxy conflicts.

The Fragility of ASEAN Consensus

Beyond national strategic preferences, Malaysia’s reservations are deeply rooted in its commitment to ASEAN institutional unity. ASEAN operates on the cardinal principle of consensus. History has repeatedly shown that attempting to force language explicitly acknowledging the 2016 arbitral ruling into joint communiqués inevitably fractures the bloc.

For Malaysia, preserving ASEAN centrality is paramount. Putrajaya recognizes that a divided and paralyzed ASEAN is essentially powerless. Malaysia's quiet diplomacy is driven by the belief that a cohesive, albeit slower-moving, ASEAN is a more effective buffer against external coercion than a fractured organization making bold but unsupported declarations. The awkwardness for Malaysia lies in watching the Philippines champion a legally righteous cause that simultaneously threatens to unravel the fragile institutional unity necessary to manage the broader geopolitical theatre.

The Code of Conduct Calculation

Nowhere is this tension more pronounced than in the ongoing, high-stakes negotiations for the South China Sea Code of Conduct (COC). Both Malaysia and the Philippines share the ultimate objective of establishing a legally binding framework that regulates behaviour, prevents accidental military clashes, and preserves freedom of navigation.

However, their tactical approaches to securing this agreement differ significantly.

It would seem that Manila’s strategy during its 2026 chairmanship is to use the moral and legal weight of the PCA anniversary to demand a COC that is strictly anchored in the tribunal's findings. From a legal standpoint, this is entirely logical. From a pragmatic negotiating perspective however, Malaysia may want to view this approach with considerable concern - bearing in mind that Malaysia and the Philippines have overlapping maritime territorial claims particularly the northeastern section of the Spratly Islands, while Malaysia claims sovereignty over several specific features in the southern part of the Spratlys (such as Swallow Reef and Ardasier Reef).

The Philippines’ approach operates under the stark geopolitical reality that Beijing flatly rejects the 2016 ruling. Under this circumstance, would an ASEAN endorsement of the PCA ruling derail talks and the conclusion of the COC?

A Harmonised Path Forward

Ultimately, the differing approaches of Malaysia and the Philippines need not be viewed as mutually exclusive. They can serve as complementary elements within a broader and more calibrated ASEAN strategy. However, before ASEAN moves towards any blanket endorsement anchored on the PCA ruling, it may be more prudent for member states to first address their own maritime border disputes, overlapping claims, and differing national sensitivities. Without this internal clarity, pushing for a common ASEAN position based too heavily on one legal victory could create unnecessary diplomatic complications and may even undermine Malaysia’s own efforts to defend its maritime areas through its preferred channels.

Both Malaysia and the Philippines can continue to champion the primacy of UNCLOS, the peaceful resolution of disputes, and the urgency of concluding a substantive and effective Code of Conduct in the South China Sea without necessarily rallying behind the specific banner of the PCA tribunal. By focusing on shared principles rather than polarising legal verdicts, the Philippines can still advance its objective of regional mobilisation, while Malaysia can preserve its indispensable role as a stabilising diplomatic bridge between ASEAN and China.

In the complex waters of Southeast Asia, resilience is not built through identical strategies, but through a synchronised pursuit of a peaceful, rules-based regional architecture that allows each claimant state to protect its sovereign interests without forcing ASEAN into unnecessary division.

About the Authors

Professor Dr Salawati Mat Basir is a Professor at the Centre of International Law and Siyar, Faculty of Law, Universiti Kebangsaan Malaysia (UKM). Her research focuses on international law and maritime security, South China Sea conflict, globalisation and regional security, and defence policy.

Kat W. Wong is the Executive Director of the Center for Advanced Studies and Research (CASR), a micro-strategy think tank based in Kuala Lumpur, Malaysia. She is a strategic advisor and analyst specialising in politics, geoeconomics, and international engagement, with over two decades of experience in Malaysian and regional affairs. Her work focuses on policy research, scenario analysis, and strategic foresight, particularly in areas of electoral dynamics, governance reform, economic resilience, and ASEAN cooperation.