In a landmark ruling on Tuesday (July 12), a UN-backed arbitral tribunal concluded that China has no legal basis to claim "historic rights" to resources in the South China Sea and it has violated the Philippines' sovereign rights in the disputed waters.

Manila, which lodged a case at the Permanent Court of Arbitration (PCA) in The Hague against Beijing in 2013, welcomed the ruling. But Chinese President Xi Jinping said while China is dedicated to maintaining peace and stability in the South China Sea, it will not accept any positions or actions based on the outcome of the arbitration case.

In a 497-page ruling that overwhelmingly favours the Philippines, the five-member tribunal said Beijing “had no historic rights to resources in the waters of the South China Sea”.

It said “such rights were extinguished to the extent they were incompatible with the exclusive economic zones provided for in the Convention”, referring to the UN Convention on the Law of the Sea.

“China had violated the Philippines’ sovereign rights in the exclusive economic zone by interfering with Philippine fishing and petroleum exploration, by constructing artificial islands and failing to prevent Chinese fishermen from fishing in the zone,” said the ruling, which is legally binding but not enforceable.

China's nine-dash line map of the 1940s claims nearly the entire South China Sea. It protrudes from China's southern Hainan island, loops 1,611 km away towards Indonesia, and then links back to the mainland in a cow-tongue shape.

China's claims overlap those of four Asean states - the Philippines, Vietnam, Malaysia and Brunei - as well as Taiwan, in the potentially resource-rich South China Sea. The sea is also a vital waterway through which some US$5 trillion (S$6.7 trillion) of ship-borne traffic passes each year.

The tribunal also found that none of the features in the Spratly islands - including Itu Aba which is controlled by Taiwan - is capable of generating extended maritime zones, and that the islands as a unit is also not capable of generating maritime zones collectively.

China insists it has historic rights

The Chinese President said China is dedicated to maintaining peace and stability in the South China Sea but will not accept any positions or actions based on the outcome of the arbitration on the long-running spat with the Philippines.

Foreign Minister Wang Yi had stronger words for the arbitral case, calling it a "farce and saying it has put the dispute into dangerous territory of worsening tensions and confrontation.

The foreign ministry had earlier dismissed the ruling and reiterated China's sovereignty over the waterway. It said China "does not accept and does not recognise" the ruling.

“The award is null and void and has no binding force,” the foreign ministry said.

China had refused to take part in the case, saying it involves a determination of who owns what in the South China Sea - that is, sovereignty - which falls under the purview of the International Court of Justice.

Xinhua news agency reported on Tuesday that a Chinese civilian aircraft successfully carried out calibration tests on two new airports in the Spratly Islands. It said the two airports were on Mischief Reef and Subi Reef, and the facilities will help with personnel transfers to the Spratlys.

An analyst in Singapore said although the ruling is unfavourable to the Chinese, they are unlikely to withdraw from the UN Convention on the Law of the Sea (Unclos).

Asean-China expert Li Mingjiang of the S. Rajaratnam School of International Studies said this is because China has other interests in the oceans, including in Indian Ocean, that require protection from the Convention.

He added that China was unlikely to do more than what it has already been doing in the South China Sea, but said all parties, including claimant states and powers such as the United States, should act with restraint in order not to provoke stronger action from the Chinese after the ruling.

Philippines calls for restraint

Philippine Vice-President Leni Robredo welcomed the tribunal ruling.

"We are glad to read about the ruling of the Permanent Court of Arbitration (PCA) regarding the Philippines' jurisdiction over our exclusive rights in our economic zone," he said in a statement.

Foreign Affairs Secretary Perfecto Yasay said those concerned must exercise sobriety and restraint.

“Our experts are studying this award with the care and thoroughness that this significant arbitral outcome deserves,” he said.

“We call on all those concerned to exercise restraint and sobriety. The Philippines strongly affirms its respect for this milestone decision.”

Taiwan rejects ruling

Taiwan meantime insisted it does not accept the ruling which it said is not legally binding. It said disputes over the South China Sea should be resolved through multilateral negotiations.

The Taiwan navy also said it will deploy another coast guard vessel to Itu Aba island to patrol around its surrounding waters. It had deployed one 2,000-tonne coast guard vessel on Sunday.

Although Taiwan is not party to the case, its claims in the South China Sea are similar to those of China, and Itu Aba island - under Taiwan's control - was brought up in testimony during the court hearings, according to Central News Agency.

What the case is about

It was in early 2013 that the Philippines brought the case against China, after the latter had wrested control of the Scarborough Shoal from the Asean state in June 2012, following a two-month military standoff that began when the Philippine navy tried to arrest Chinese fishermen found fishing in the disputed area.

Manila in July 2012 tried to have the dispute over Scarborough Shoal included in a joint statement of the Asean foreign ministers. But that was blocked by Cambodia. The Philippines later went to the PCA to challenge China's expansive claims in the South China Sea.

The PCA in October last year decided that it had jurisdiction to consider seven of Manila's 15 submissions. These include one which claims that Scarborough Shoal and three reefs are not islands capable of sustaining economic activity and therefore not entitled to an exclusive economic zone (EEZ), and another one which claims that five other reefs are low-tide elevations and therefore not entitled to a territorial sea or EEZ.

Manila also asked the tribunal to find that China's claims to sovereign rights and jurisdiction, and to "historic rights" of the areas encompassed by the nine-dash line are contrary to the Convention on the Law of the Sea.

The Philippines was hoping through its arbitration to prove that China's nine-dash line, which covers much of the Asean state's EEZ - a 200-nautical mile area from its coastline of which resources it can explore and use - is not legal.

Apart from asking the tribunal to rule on the nine-dash line itself, the Philippines was trying through its other submissions to show that China has little maritime rights through the reefs and rocks it currently occupies and therefore also invalidate the nine-dash line.