The Permanent Court of Arbitration -- which is more than a century old and based in The Hague -- ruled yesterday that it did have jurisdiction on the issue.
Manila insists the United Nations Convention on the Law of the Sea, which the Philippines and China have both ratified, should be used to resolve the bitter territorial row over isolated reefs and islets, which has triggered growing international alarm.
But China has refused to participate in the proceedings, arguing that the case is about sovereignty and the court cannot rule on it.
"We will not participate and we will not accept the arbitration," Vice Foreign Minister Liu Zhenmin told reporters in Beijing.

"The ruling or the result of arbitration will not affect China's position. It won't affect China's sovereignty rights and jurisdiction in the South China Sea, our rights will not be undermined”, he added.
As veto-wielding permanent member of the UN Security Council, the stance will put Beijing in a difficult diplomatic position if the court rules that it has violated one of the UN's own statutes.
Beijing insists it has sovereign rights to nearly all of the South China Sea, a strategic waterway through which about a third of all the world's traded oil passes.
The disputed waters -- also claimed in part or whole by Vietnam, Malaysia, the Philippines, Taiwan and Brunei – have also become the stage for a tussle for regional dominance
between Beijing and Washington, the world's two largest economic and military powers.
This week, the American USS Lassen guided missile destroyer sailed within 12 nautical miles of at least one of the land formations claimed by China, sparking fury in Beijing.


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