On July 12, the Permanent Court of Arbitration in the Hague ruled that China has no legal basis to claim historic rights to resources within the sea areas falling within the 'nine-dash line'.
Philippine brought the case in 2013 to the Permanent Court of Arbitration.
There were three key points in which Philippine asked for the Court to decide.
The first one is for the court to decide whether certain features in the sea were islands, reefs, low tide elevations or submerged banks. This decision will lead to the recognition of the island delivers an Exclusive Economic Zone of 200 nautical miles. And this recognition will give the responsible country complete control over all enclosed resources. And the most important is that the artificial islands that China has been building are not counted.
The second one is that Philippine asked for the court to rule the territorial area of the South China Sea which was owed under United Nation's Convention on the Law of the Sea (UNCLOS).
The third one is that Philippine wanted the court to decide whether China has violated its territorial rights through constructing the artificial island and the fishing activities in the sea.
In a 497-page ruling which was published on Tuesday, the court decided that China had interfered the rights of Philippine fishermen at Scarborough Shoal. China had restricted their access resulting to "irreparable harm" to the marine environment. It also said that the Chinese law enforcement vessels which patrols around the sea caused a serious risk of collision.
China immediately stated that it rejects the ruling which will have lasting implications to the resource-rich hot spot, over $5 trillion worth of shipborne trade pass through the area each year. It said that the Chinese people have had their activities done in the area for more than 2,000 years and they had right for the exclusive economic zones.
China's president, Xi Jinping, stated to Xinhua state news agency that his country "will not accept" the ruling and said that the government "under any circumstances, will not be affected by the award".
Al Jazeera's reporter, Adrian Brown, reported, "It's fair to assume that the Chinese government knew which way this was going to go. Within minutes of the decision, the Chinese government released a fairly detailed statement restating why China always believes these islands belong to them, so now the question is really what is going to happen in the coming days."
The Chinese foreign Ministry said that China has authority over the islands in the South China Sea, including the Spratlys and Paracels. He said that Beijing acts is consistent with international law and practice.
People in China was outraged by this ruling. One user of microblogging site Weibo wrote, "It was ours in the past, is now and will remain so in the future. Those who encroach on our China's territory will die no matter how far away they are."
A video about the arbitration spread across the country and attracted people all over the country and it was said that over than 3.5 millions people have watched the video.
Philippine authority said that this ruling is the "milestone decision" but there were little celebration. It is said that the government want to retain its friendly relationship with China to have sought promises of Chinese investment.
The Philippine foreign secretary, Perfecto Yasai, said, "The Philippines reiterates its abiding commitment to efforts of pursuing the peaceful resolution and management of disputes with the view of promoting and enhancing peace and stability in the region."
Though the Filipinos were responded in more delighted ways. Social media users dubbed the ruling #CHexit.
The PCA's decision is binding and diplomatic implications may occur for China if they refuse to obey the ruling.
Prior to the verdict, Singapore's Institute of South East Asian Studies senior fellow Ian Storey said, "People are saying if China doesn't abide by the ruling then it undermines its own position that it is committed to maintaining a rules-based order. So the consequences will be to its reputation."