One could say these rocks at the eastern entrance of the Strait of Singapore, where it opens out into the South China Sea, are but a stone's throw away from each other.

Following Friday's judgment by the world court, football field-sized Pedra Branca - on which stands Horsburgh Lighthouse - is officially Singapore's.

Just 1km to the south are two small clumps of granite known as the Middle Rocks. They are now officially Malaysia's.

To the south-west of both is South Ledge, a rock formation visible only at low tide.

While Pedra Branca and the Middle Rocks are regarded in international law as islands that generate their own territorial waters and exclusive economic zones, South Ledge, as a low-tide elevation, does not.

As the International Court of Justice (ICJ) ruled on Friday, South Ledge belongs to the state in whose territorial waters it stands.

So what does the judgment mean for Singapore and Malaysia? And is it really a win-win outcome as some have sought to paint it?

Politically speaking, there is good reason for both governments to go along with such a portrayal of the judgment.

A key concern has always been whether feelings would run high in Johor, the state closest to Pedra Branca and to whose predecessor, the Sultanate of Johor, the island once belonged.

It is unsurprising that Johor politicians have been among the most vocal in expressing disappointment at the loss of the island they and other Malaysians call Pulau Batu Puteh.

International Trade and Industry Minister Muhyiddin Yassin said on Friday that 'as a subject of Johor', he was sad because 'we have lost part of our territory'.

But he also urged Malaysians to accept the ICJ judgment.

That the court upheld Malaysia's title to Middle Rocks could help to pacify somewhat those elements who feel the loss of Pulau Batu Puteh most keenly.

In the best scenario, it could help to minimise the build-up of anti-Singapore sentiment.

That would be in the best interests of both countries, which have more to gain from cooperation than confrontation.

Politics aside, Singapore is naturally pleased that it now has the right to full and unimpeded control of Pedra Branca, an island that has been key to the safety of navigation in the Singapore Strait for centuries.

Singapore's bustling container port is central to its economic livelihood.

As such, Ambassador-at-large Tommy Koh said on Wednesday that 'freedom and safety of navigation are critical and part of our core national interest'.

Singapore not only owns and operates Horsburgh Lighthouse, it has also installed a VTIS, or Vessel Traffic Information System, tower on Pedra Branca, which it relies on in its management of shipping traffic.

The judgment also has a bearing on the countries' territorial waters.

The two sides will now need to discuss and decide where Singapore's territorial waters end and where Malaysia's begin, and vice-versa.

That process would have been necessary even if the court had awarded sovereignty over all three features to Singapore, because their territorial waters overlap with those of the state of Johor.

The outcome of that process will now also decide to whom South Ledge belongs.

Under the United Nations Convention on the Law of the Sea (UNCLOS), to which both Singapore and Malaysia are signatories, countries can claim a territorial sea of up to 12 nautical miles from their coasts.

Singapore and Malaysia are located so close to each other that their territorial waters overlap in many areas.

Within its territorial waters, a state is free to set laws, regulate use and exploit any resource.

Vessels, however, enjoy the right of 'innocent passage' provided they pass 'continuously and expeditiously' through and do not do anything to threaten the sovereignty and security of the coastal state.

But UNCLOS does not regard fishing as 'innocent passage'.

So Malaysia and Singapore will also have to discuss the rights of their fishermen in the waters around Pedra Branca and Middle Rocks.

Now that the fundamental issue of sovereignty has been settled, there remain a slew of implementation details to be ironed out. In doing so, differences are bound to crop up.

They are par for the course for neighbours who have to live so snug in each other's embrace, geographically speaking, and whose past, present and future remain so closely intertwined. What matters is that both sides have demonstrated a resolve to work out such differences peaceably and amicably, in accordance with international law.

In that sense, the ICJ judgment marks an important milestone in bilateral ties and is, one could say, a win-win outcome for both.

lydia@sph.com.sg