## Facts

- Timor-Leste and Australia disputed permanent delimitation of their exclusive economic zone and continental shelf in the Timor Sea, including rights to offshore hydrocarbons, especially the Greater Sunrise fields.
- The area had long been managed through provisional treaty arrangements that deferred permanent boundaries, including the 2002 Timor Sea Treaty and the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).
- Both States are parties to the United Nations Convention on the Law of the Sea (UNCLOS); Australia had declared an exclusion from binding dispute settlement for maritime boundary delimitation.
- On April 11, 2016, Timor-Leste initiated UNCLOS Annex V, section 2 compulsory conciliation, seeking interpretation and application of UNCLOS arts. 74 and 83 and the establishment of permanent maritime boundaries.
- A five-member Conciliation Commission was constituted under UNCLOS Annex V with the Permanent Court of Arbitration acting as registry; the Commission adopted procedural rules and conducted written, oral, plenary, bilateral, and technical sessions.
- Australia raised preliminary objections to competence, arguing that existing treaties and exchanges amounted to an agreement barring compulsory procedures and that UNCLOS art. 298(1)(a)(i) prerequisites were not satisfied.
- On September 19, 2016, the Commission issued a unanimous Decision on Competence rejecting Australia’s objections.
- The Commission pursued a structured settlement process including confidentiality and confidence-building measures and technical work on boundary options and resource development arrangements.
- On March 6, 2018, the States signed a treaty establishing maritime boundaries in the Timor Sea; on May 9, 2018, the Commission issued a public report recording the settlement and recommendations and concluding the conciliation.

## Issues

1. Whether the Commission had competence under UNCLOS to proceed with compulsory conciliation given prior treaty arrangements and the operation of UNCLOS art. 281.
2. Whether UNCLOS art. 298(1)(a)(i) prerequisites for compulsory conciliation were met, including (a) when the relevant “entry into force” occurred and (b) whether negotiations had failed within a reasonable period.
3. How UNCLOS arts. 74 and 83 should guide the Commission’s recommendations to facilitate an equitable permanent maritime boundary and associated resource arrangements.

## Decision

- The Commission unanimously held it was competent to conduct compulsory conciliation.
- The Commission determined that UNCLOS art. 281 requires a legally binding agreement to settle the dispute by other means, and the parties’ exchanges did not meet that standard.
- The Commission found CMATS was a provisional resource-sharing arrangement that postponed delimitation and did not exclude UNCLOS compulsory conciliation.
- For UNCLOS art. 298(1)(a)(i), the Commission treated “entry into force of this Convention” as November 16, 1994 (the Convention’s general entry into force), not the date of entry into force for each State.
- The Commission held the “reasonable period” negotiation requirement was satisfied due to prolonged, unsuccessful efforts to reach a permanent boundary agreement.
- The Commission interpreted UNCLOS Annex V, art. 7 such that the twelve-month period to endeavor to produce a report began with the Decision on Competence.
- The conciliation concluded with a negotiated treaty establishing a permanent maritime boundary and detailed resource and transitional arrangements, rather than a binding adjudicative merits ruling.

## Legal Principles

- UNCLOS Annex V compulsory conciliation is a non-binding process designed to assist parties in reaching an amicable settlement, with procedural flexibility to support negotiation and recommendations.
- UNCLOS art. 281 excludes Part XV procedures only where the parties have a legally binding agreement to settle the dispute by a peaceful means of their own choice that precludes further procedures.
- Provisional resource-sharing treaties that defer delimitation do not, without more, bar UNCLOS compulsory conciliation concerning maritime boundaries.
- For UNCLOS art. 298(1)(a)(i), the Convention’s “entry into force” refers to the Convention’s general entry into force date, and the “reasonable period” negotiation condition may be met by a demonstrated history of failed negotiations.
- Maritime delimitation under UNCLOS arts. 74 and 83 is directed toward an “equitable solution,” commonly operationalized through an equidistance/relevant-circumstances approach with proportionality checking.
- A conciliation commission may consider legal, technical, and economic factors in crafting recommendations that can be incorporated into a comprehensive settlement package, including resource-sharing and transitional arrangements.

## Conclusion

The UNCLOS Annex V Commission upheld its competence despite Australia’s objections based on prior treaties and, through a structured conciliation process, facilitated a negotiated treaty establishing permanent Timor Sea maritime boundaries and associated resource and transitional arrangements, illustrating compulsory conciliation’s role when binding delimitation procedures are excluded.


Timor Sea Conciliation (Timor-Leste v. Austl.), PCA Case No. 2016-10 (Comp. Conciliation Comm’n 2018)