An international tribunal has ruled that it had the jurisdiction to hear a case brought by the Philippines over disputed islands in the South China Sea.
The Hague-based Permanent Court of Arbitration said on Thursday that it has rejected China's claim that the row was beyond the tribunal's remit.
The case taken by the Philippines to the Permanent Court of Arbitration revolves around underlying rights and entitlements and "the status of certain maritime features" in the South China Sea, the court said.
The court ruled that the case reflects "disputes between the two states concerning the interpretation or application" of the UN Convention on the Law of the Sea.
Manila has insisted the Convention, which the Philippines and China have both ratified, should be used to resolve the territorial row over isolated reefs and islets, which has triggered growing international alarm.
But China, which 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 - has refused to participate in the proceedings.
The disputed waters - claimed in part 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.
Related: A Sino-American naval showdown in the South China Sea
Following a stand-off between Chinese ships and the weak Filipino Navy in 2012, China took control of a rich fishing ground called Scarborough Shoal that is within the Philippines' exclusive economic zone.
China has also undertaken giant reclamation activities, raising fears it will use artificial islands to build new military outposts close to the Philippines and other claimants.
In a separate development on Thursday, the Chinese and US navies held high-level talks after a US warship challenged China's territorial assertions in the South China Sea, and a US official said both sides agreed to maintain dialogue and follow protocols to avoid clashes.