The Permanent Court of Arbitration in The Hague, Netherlands, on Tuesday ruled that China has no "historic title" over the waters of the South China Sea.
In its ruling, it also said that China has interfered with traditional Philippine fishing rights at Scarborough Shoal, even as Beijing claimed historic rights to the waters under nine-dash line, which the tribunal said is contrary to the UN Convention on the Law of the Sea that determines which countries can claim economic exploitation rights, based on geographic features.
The Permanent Court of Arbitration was giving its ruling on a dispute between the Philippines and China over maritime claims in the South China Sea - particularly who has the right to exploit resources in the strategic territory.
China had earlier decided to boycott court proceedings, saying that the latter did not have the jurisdiction to decide on the matter.
In advance of the ruling, the China Daily newspaper, which is published by the government, topped its front page on Tuesday with a picture of Woody Island in the South China Sea emblazoned with the words: "Arbitration invalid".
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State-run news agency Xinhua included headlines such as: "South China Sea arbitration abuses international law: Chinese scholar".
The Philippines embassy in China warned its citizens to be "careful" due to tension before the ruling and to avoid political debate. The embassy also urged its citizens to carry identification papers "at all times" and report any threat received to the embassy and Chinese police.
According to Al Jazeera, China asserts sovereignty over almost all of the South China Sea, a strategic waterway through which more than $5 trillion of world trade is shipped each year, despite rival claims from the Philippines and other Southeast Asian nations.
The US says it wants the crucial sea lane to be treated as international waters.
Both Beijing and Washington have accused each other of provocations in the South China Sea.
The court has no power of enforcement, but a victory for the Philippines could spur Taiwan, Vietnam, Malaysia and Brunei, which also have overlapping claims, to file similar claims.