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Two states, the Republic of the Philippines and the State of Nueva Aurora, sign the Treaty on Peaceful Settlement of Territorial and Maritime Disputes (TPS-TMD2). The TPS-TMD2 provides three stages: Stage 1 – direct negotiations within 20 days of invocation; Stage 2 – appointment of a neutral mediator who must issue a non-binding report within 40 days if Stage 1 fails; Stage 3 – if Stage 2 does not yield an agreement, the dispute may be submitted to binding arbitration under the Permanent Court of Arbitration (PCA) provided both states consent after Stage 2. The Philippines invokes Stage 1, but Nueva Aurora refuses to participate in negotiations. (a) Identify the controlling doctrine on the obligation to settle disputes by peaceful means and explain its bearing on the design and progression of TPS-TMD2. (b) Distinguish which steps are binding and which are non-binding, focusing on how a party's refusal to participate affects progression to Stage 2 and Stage 3. (c) Given Nueva Aurora’s refusal, can the Philippines proceed to Stage 2 or Stage 3 unilaterally? Explain with governing rules and a brief conclusion.

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