Court resolves boundary dispute, giving clarity to businesses operating in disputed waters

The ICJ’s judgment would seem to resolve the disputed sovereign rights between Nicaragua and Colombia over the mineral- and fish-rich waters in the Caribbean Sea.

For Governments, this judgment provides helpful guidance as to the delimitation of maritime boundaries under the United Nations Convention on the Law of the Sea (“UNCLOS”) and under customary international law. As mineral resources become ever more scarce and valuable, it sets some context as to how claims by States to extend their continental shelf may be treated in future.

Many businesses’ economic activities include the exploitation of maritime resources (including exercising fishing rights, or exploring for and producing offshore oil and gas resources). They operate in these maritime areas under concessions from the State and are subject to that State’s laws and regulations. Where a maritime area claimed by one State overlaps with another State’s entitlement to sovereign rights over that area, the dispute between States can contribute to the political and economic risk for any business performing economic activities in the disputed area.

The ICJ’s judgment should be closely studied by businesses operating offshore. It provides valuable guidance on how disputes regarding overlapping claims to maritime areas may be resolved. Where States are asserting claims to extend their maritime boundaries into an area where businesses operate under the jurisdiction of another State, the judgment may assist businesses in assessing the political and economic risks of operating in those waters.

Introduction

Maritime areas can be rich in biodiversity, fishing resources, scenic beauty and natural resources such as hydrocarbons. The economic and cultural benefits which can be derived from maritime resources mean that the question of which State has sovereign rights over maritime areas can often be hotly disputed.

But, how is it determined which State has sovereign rights over maritime areas? And what protection exists under international law when claims by two States to sovereign rights over a maritime area overlap?

In Nicaragua v. Colombia the ICJ found that Nicaragua was not entitled to an extended continental shelf which was delimited within 200 nautical miles from the baselines of Colombia’s mainland coast.

Background to the dispute

The question of the disputed maritime limits between the States have strained diplomatic relations for decades. Nicaragua first brought the dispute before the ICJ in 2001, and in 2012 it succeeded in winning several thousand square kilometres of territory in the Caribbean Sea.

The current dispute derives from a claim which was brought before the ICJ by Nicaragua again in 2013. Nicaragua proposed coordinates for the continental shelf boundary between Nicaragua and Colombia in the area beyond 200 nautical miles from the baselines of Colombia’s mainland coast.

In an Order of 4 October 2022, the Court considered that, in the circumstances of the case, before proceeding to the consideration of any consideration of scientific or technical questions, there were legal questions which it first had to decide on. These were:

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  • “Under customary international law, may a State’s entitlement to a continental shelf beyond 200 nautical miles from the baselines from which the breadth of its territorial sea is measured extend within 200 nautical miles from the baselines of another State?”; and
  • “What are the criteria under customary international law for the determination of the limit of the continental shelf beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured and, in this regard, to paragraphs 2 to 6 of Article 76 of the [UNCLOS] reflect customary international law?”

The first question

Before summarising the Court’s answer to the first question, we briefly summarise some of the key relevant legal concepts and terminology:

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  • What was UNCLOS’s relevance?: Much of the international law of the sea is codified in the UNCLOS. However, not all coastal States are party to UNCLOS. In the present case, the parties were asked to base their arguments on customary international law because Colombia is not a party to the UNCLOS.
  • What is customary international law?: Customary international law consists of rules that come from a general practice accepted as law and exist independent of treaty law. Put simply, it is not based on written laws, but on consistent State practice along with States’ belief that they are acting in accordance with a binding norm.
  • Why is the 200 nautical mile delimitation relevant?: The area stretching 200 nautical miles from the baseline of a coastal State is referred to in UNCLOS as its Exclusive Economic Zone or “EEZ.” The regime that governs the EEZ set out in the UNCLOS confers exclusively on the coastal State the sovereign rights of exploration, exploitation, conservation and management of natural resources within the EEZ. The ICJ stated that the rights and duties of coastal States and other States in the EEZ set out in the UNCLOS reflect customary international law.
  • What is the continental shelf?: Article 76 of the UNCLOS defines the continental shelf as comprising the seabed and subsoil of the submarine areas that extend beyond a coastal State’s territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance. In other words, in customary international law, as reflected in Article 76 of the UNCLOS, a State’s entitlement to a continental shelf is determined in two different ways: by distance, within 200 nautical miles of its baselines, and the “natural prolongation” criterion, which is beyond 200 miles, but where the outer limits of the continental shelf can be established on the basis of certain scientific and technical criteria.

The parties’ disagreement was on whether a State’s entitlement to a continental shelf beyond 200 nautical miles from the baselines from which the breath of its territorial sea is measured may extend within 200 nautical miles from the baselines of another State.

The legal regimes governing the EEZ and the continental shelf of a coastal State within 200 nautical miles from its baselines are interrelated. Under the UNCLOS, within the EEZ, the rights with respect to the seabed and subsoil are required to be exercised in accordance with the provisions of the UNCOS that govern the continental shelf.

Nicaragua argued that its continental shelf extended beyond the 200 nautical miles from its baselines. However, its delimitation of its continental shelf was within 200 nautical miles of Colombia’s baselines.

It fell to the Court to analyse whether such an approach was permissible under customary international law. It found three reasons to suggest that it was not:

• • First, the vast majority of UNCLOS States that have made submissions to the Commission on the Limits of the Continental Shelf (“CLCS”) have chosen not to assert the outer limits of their extended continental shelf in circumstances where those outer limits would extend within 200 nautical miles of the baselines of another State. The majority of the Court found that this practice was indicative of opinio juris, even though it may have been motivated by considerations other than legal ones.
  • Second, the Court acknowledged that when a small number of States did attempt to assert a right to an extended continental shelf which encroach on maritime areas within 200 nautical miles of other States, the States concerned had objected.
  • Third, the Court noted that, among the small number of coastal States (like Colombia) which are not party to the UNCLOS, it was not aware of any that has claimed an extended continental shelf that encroached within 200 nautical miles.

The Court, by a majority of 13-4, found that, taken as a whole, the practice of States can be considered to be sufficiently widespread and uniform for the purpose of being considered customary international law. This led to the conclusion that a State’s entitlement to a continental shelf beyond 200 nautical miles from its baselines may not extend within 200 nautical miles from the baselines of another State.

The second question

As a result of its answer to the first question, there was no need for the Court to consider its second question.

What does the judgment mean?

The judgment may have an impact on both Governments and businesses:

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  • For Governments: The majority view of the Court is that a State cannot extend its continental shelf beyond 200 nautical miles in circumstances where this would encroach on the 200 nautical mile area of another State. This may influence State practice in disputed maritime areas, in particular where there are mineral rich areas which may be in an area which States believe are scientifically and technically an extension of their continental shelf.
  • For businesses: Many businesses perform economic activities in maritime areas. In particular where those maritime areas are mineral- or fish-rich, they can often be disputed between neighbouring States. This increases the political and economic risk for businesses who operate there. Businesses operate in maritime areas under concessions on the basis of the State sovereignty over the area. This carries the risk that, if a State no longer has sovereignty over the area, businesses will lose their ability to operate there. The judgment may provide some comfort that businesses may be insulated from the political risk of claims that a continental shelf of one State may encroach within 200 nautical miles of another State.

International law can often be a murky sea of complexity. We are here to help Governments and businesses seek to navigate it.

Authored by Markus Burgstaller and Scott Macpherson.