FIVE judges of the Permanent Court of Arbitration in The Hague unanimously ruled that China had violated Philippines' rights by building artificial islands that destroyed coral reefs and disrupted fishing and oil exploration in the South China Seas, which it claims is its own territory.
The court ruled "there was no evidence that China had historically exercised exclusive control" over the area and so had no right to claim historic rights to resources "falling within the 'nine-dash line'."
But China, which boycotted the entire proceedings, reiterated that it does not accept the court's jurisdiction, reported The Associated Press.
China's claims, which include waters approaching neighbouring countries, are based on a vaguely defined "nine-dash-line" found on a 1940s Chinese map, notes Agence France-Presse.
The row has involved the United States, which has deployed warships to assert freedom of navigation in the waters - through which one-third of the global oil trade passes.
China says its fishermen have visited the area for centuries, but the court said that under the UN Convention on the Law of the Sea (UNCLOS), which China signed, Beijing had no exclusive control of it.
Any historic rights were "extinguished" when it signed up to UNCLOS, it said, and there was "no legal basis for China to claim historic rights to resources within the sea areas falling within the 'nine-dash line'," it said.
Crucially, it ruled that none of the Spratlys, a chain of outcrops in the south of the sea, were "islands" under the meaning of UNCLOS, and thus whoever had sovereignty over them - an issue it did not address - was not entitled to 200-nautical-mile exclusive economic zones (EEZs) of their own.
Some sea areas were therefore definitely in the Philippines' EEZ, it said, as they were "not overlapped by any possible entitlement of China".
China had violated the Philippines' sovereign rights in its EEZ and the artificial islands Beijing has been furiously building in recent years - reshaping the area in an effort to bolster its claim - have inflicted severe environmental damage, it added.
But China "solemnly declares that the award is null and void and has no binding force. China neither accepts nor recognises it," said a statement from the foreign ministry.
The US State Department called on both parties to comply with their obligations, according to a statement from spokesman John Kirby.
US Defence Secretary Ash Carter said the ruling is an opportunity for all to act in accordance with the rule of law.
The United States has not taken sides in the South China Sea disputes but has worked to ensure freedom of navigation and overflight in the region are maintained, which denies Chinese rights to sovereignty.
"The Philippines strongly affirms its respect for this milestone decision as an important contribution to ongoing efforts in addressing disputes in the South China Sea," said Philippine Foreign Secretary Perfecto Yasay.
The court also found that China had interfered with Philippine petroleum exploration at Reed Bank, tried to stop fishing by Philippine vessels within the country's exclusive economic zone and failed to prevent Chinese fishermen from fishing within the Philippines' exclusive economic zone at Mischief Reef and Second Thomas Shoal.
Japan's Foreign Minister Fumio Kishida said the tribunal's decision is "final and legally binding" and that the two sides should comply.
Mr Kishida said in a statement that "Japan strongly expects that the parties' compliance with this award will eventually lead to the peaceful settlement of disputes in the South China Sea."
China considers bilateral talks with the other claimants the only way to address the South China Sea disputes.
Vietnam welcomed the ruling in the Philippines' case, but accused Chinese vessels of sinking a Vietnamese fishing boat in disputed waters.
Chinese vessels chased and sank the Vietnamese boat around midday Saturday as it was fishing near the Paracel islands. Another trawler rescued the five fishermen seven hours later.
Source : HKSG.