The UN's top court ruled on Friday that Singapore owns a rocky outcrop that lies on a strategic shipping lane in a verdict that delivered a lesser prize to Malaysia, the other party in the dispute.
The ruling could be a blow to Malaysia as the outcrop, called Pedra Branca by Singapore and lies where the Singapore Strait meets the South China Sea, was the more strategic and crucial islet in the cluster, a Western diplomat said. "The court concludes ... that by 1980 sovereignty over Pedra Banca/Pulau Batu Puteh had passed to Singapore," Judge Awn Shawkat Al-Khasawneh said in his ruling, which is final with no appeals allowed.
The verdict does not totally resolve the dispute between the two countries because it only determines the ownership of the islets and not where the maritime boundary lies. There could still be a prolonged dispute, but nothing likely to disrupt shipping.
The case could encourage other Asian governments to resolve decades-old maritime disputes in oil-rich waters through arbitration. Singapore's foreign ministry said it was pleased with the judgement giving it sovereignty over Pedra Branca, the "key feature" of the dispute.
The International Court of Justice also ruled that Malaysia has sovereignty of a nearby islet known as Middle Rocks and that a third, called South Ledge, belongs to the state in whose territorial waters it is located.
The outcrop is located on the edge of Singapore Strait, which together with the adjacent Malacca Strait, carries 40 percent of the world's trade. More than 60,000 ships a year traverse the waterways, carrying some 80 percent of the energy supplies of Japan and China.
Also called Pulau Batu Puteh by Malaysia, the outcrop is no larger than half a football field but houses a lighthouse run by Singapore, the world's largest container port. Singapore says the city-state has a territorial sea limit that extends up to a maximum of 12 nautical miles (22.2 kilometres).
"It is a win-win situation," Malaysian Foreign Minister Rais Yatim told reporters after the court ruling, noting that both countries had received sovereignty of an islet. He said the two countries would set up a committee to go through the judgement and come up with a solution regarding South Ledge.
But in a sign that the verdict has already struck a raw nerve, Malaysia's deputy premier Najib Razak sounded a word of caution. "The ruling does not mean Singapore can take unilateral action such as land reclamation," he told local media. "The joint technical committee will study in-depth and we will be decide."
Singapore welcomed the court verdict and said it did not expect any problems between the two countries. "This will not affect bilateral relations. Malaysia and Singapore have shown through this process a good example to the rest of the region how such disputes can be resolved in a peaceful and amicable method," Singapore's Deputy Prime Minister S. Jayakumar told reporters.
Malaysia and Singapore have a history of squabbling over issues ranging from water supplies to land reclamation and transport links since Singapore gained sovereignty from Malaysia in 1965.
The verdict could have political implications in Malaysia. "It might potentially upset some of the groups that are very nationalistic in nature for whom this decision represents Malaysia's honour being slightly stripped away to Singapore," said Malaysian political analyst Tricia Yeoh. The government had earlier warned Malaysians against holding anti-Singapore protests in the event it lost the case.
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