Arbitration and Offshore Resources in Disputed Maritime Areas

Abstract

This chapter studies the role of arbitration for offshore resources in disputed maritime areas. It is an observable fact that disputes over maritime boundaries are mostly caused by competing desires of states to exploit offshore natural resources, in particular oil and gas deposits. Indeed, it is well known that the law on maritime boundaries was developed precisely in order to allocate rights over offshore natural resources. However, it has also long been observed that the law on maritime boundary delimitation, as developed by international tribunals, ostensibly pays only scant regard to this underlying basis of the disputes at issue. Rather, the law purports to base itself on other principles. In particular, the unilateral activities of the parties are consistently rejected as being ‘relevant circumstances’ relevant to a boundary delimitation. However, if one looks at what tribunals do, instead of what they say they do, it seems that in fact the unilateral activities of the parties concerning the exploitation of offshore hydrocarbons play a rather larger role. Whenever tribunals have some discretion, they invariably choose a delimitation line that gives oil and gas deposits to those parties that have taken the initiative to drill them unilaterally, provided that this drilling has taken place at least within a plausible boundary of the state that issued the concession. Moreover, tribunals are extremely reluctant to draw boundaries over drilled deposits, thus avoiding making them shared as a result of the delimitation exercise.