Philippines celebrates victory in South China Sea dispute but China rejects The Hague's decision

Hundreds of Filipinos celebrated a sweeping victory after the Permanent Court of Arbitration at The Hague ruled that China has no legal basis for its extensive claims over the South China Sea. People wept with joy and embraced one another, after decades of territorial disputes over the waters.

The UN tribunal decision, which was rejected by China, has aggravated the regional dispute with its large-scale land reclamation and construction of artificial islands that destroyed coral reefs and the natural condition of the disputed areas. The court said China had been exploring oil and gas near the Reed Bank, which violated Philippines sovereign rights and interfered with their traditional fishing rights, particularly at Scarborough Shoal. It was also revealed that China had damaged part of the ecosystem of the Spratly Islands with activities such as overfishing and creating artificial islands.

China was also criticised for building a large artificial island on Mischief Reef, the court claimed it caused "permanent irreparable harm" to the coral reef ecosystem while permanently destroyed evidence of the natural conditions of the feature.

The five-member panel unanimously concluded that China had violated its obligation to refrain from aggravating conflict with the Philippines, at a time when it should have been resolving them.

Meanwhile, Vietnam accused Chinese vessels of sinking a Vietnamese fishing boat in disputed waters. Nguyen Thanh Hung, a local fisheries executive in Quảng Ngãi Province, reported that two Chinese vessels had chased, and sank the Vietnamese boat around midday while it was fishing for Parcel islands. On board were five fisherman, who were not rescued until roughly seven hours later.

The South China Sea has become Asia's biggest potential military flashpoint as Beijing's sovereignty claim over the huge area has set it against Vietnam and the Philippines as the three countries race to tap possibly huge oil reserves. China took full control of the islands in 1974 after a naval showdown with Vietnam.

China claims most of the energy-rich waters through which about $5 trillion in ship-borne trade passes every year. Neighbours Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claimed.

Philippine Foreign Secretary Perfecto Yasay welcomed the decision, and pledged to pursue a peaceful resolution of his country's territorial disputes with China. "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," he said in Manila. Yet China still refused to accept the panel's jurisdiction, that it "solemnly declares that the award is null and void and has no binding force. China neither accepts nor recognises it" the foreign ministry's statement said.

Japan's Foreign Minister Fumio Kishida said the Hague tribunal's decision is "final and legally binding" and that the two sides should comply with it. In a statement, he said: "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 says that bilateral talks between Beijing and other claimants is the only way to address the South China Sea disputes. However a new Philippine leader who appears friendlier to Beijing could also influence the aftermath of the ruling.