The arbitration concerned the role of historic rights and the source of maritime entitlements in the South China Sea. Abstract: The Sino-Philippine Arbitration on the South China Sea (SCS).Disputes is coming to a critical stage. Each party files observations on the other party's submission on costs. 62. Hela Schwarz GmbH v. An international tribunal in The Hague has invalidated China's claims in the South China Sea in a firstever ruling. The Permanent Court of Arbitration in The Hague rules in favor of the Philippines in a case opened in 2013 against the People's Republic of China. As provided in the Convention, the Tribunal's decision is final and legally binding on both China and the Philippines. The Permanent Court of Arbitration in The Hague rules in favor of the Philippines in a case opened in 2013 against the People's Republic of China. The Tribunal issues a decision on the Respondent's preliminary objections pursuant to ICSID Arbitration Rule 41(5).