The International Court of Justice and the Territorial Dispute between Indonesia and Malaysia in the Sulawesi Sea

In the early 1990s Indonesia and Malaysia were locked in a longrunning and bitter dispute over the ownership of two tiny islands in the Sulawesi Sea and the associated question of maritime boundaries in this area rich in oil and gas deposits. Neither government had ever referred a dispute with another state to the International Court of Justice but in 1996 President Soeharto agreed to Malaysia's proposal to ask the ICJ to issue a ruling on the dispute between the two countries. In 1998 Indonesia and Malaysia asked the ICJ to rule on the ownership of the islands. They did not, however, ask it to rule on the far more important question of their maritime boundaries in the Sulawesi Sea. The ICJ's judgement in 2002 that the islands belonged to Malaysia therefore left that question unresolved. The article argues that because of Indonesia's experience with the ICJ and the high stakes involved for both countries any resolution of the boundary dispute - which came close to open conflict in 2005 - will almost certainly be the result of state-to-state negotiations rather than a ruling by the ICJ or any outside body.Griffith Business School, Department of International Business and Asian StudiesFull Tex