By David Tweed

(Bloomberg) — An worldwide court docket will rule subsequent month on the validity of China’s claims to a big swath of one of many world’s busiest and most disputed waterways.

The court docket will launch its determination on the South China Sea on July 12, first to the events concerned after which to observer states, the Permanent Court of Arbitration in The Hague mentioned in a press release on Wednesday.

The Philippines introduced the case to the tribunal, difficult China’s assertions to greater than 80 % of the South China Sea. Whatever the court docket finds, the ruling will threat inflaming tensions within the waterway, which hosts about $5 trillion of commerce a yr.

Under President Xi Jinping, China has extra strenuously asserted its claims, straining ties with different claimant states like Vietnam and exacerbating a rivalry with the U.S. for army affect within the western Pacific. China has reclaimed greater than 3,000 acres (1,200 hectares) of land within the space to construct synthetic islands, a few of them that includes ports and runways.

The administration in Beijing says its sovereignty over the waters “since ancient times” is indeniable and calls for different states receive its consent for army transits close to the options it occupies.

China and the U.S. have been on a diplomatic flurry earlier than the ruling, with visits to Southeast Asian nations and public statements on their views. China succeeded this month in lobbying Laos to torpedo an Association of Southeast Asian Nations assertion that had expressed “serious concern” over developments within the South China Sea and the chance to Asean-China ties.

The U.S. started to problem China’s presence within the sea in October, sending ships and conducting flights close to the islands China occupies in freedom of navigation operations which have infuriated Beijing. In May, China despatched fighters and warships to warn off the USS William P. Lawrence when it sailed close to considered one of its outposts within the Spratly Islands.

The Philippines contends that China violates the United Nations Convention on the Law of the Sea, to which each nations are signatories. It argues China’s “historic” rights are incompatible with the treaty, requests a dedication concerning the standing of the options China occupies and asserts that China has interfered with Philippine rights through its building and fishing actions.

China has rejected the arbitration and insists any disputes within the area needs to be settled by direct talks.

‘Not Accept’

“The result of the arbitration is non-binding as far as China is concerned,” Admiral Sun Jianguo mentioned at a discussion board in Singapore in June. “The Chinese government has already repeatedly made it clear that it will not accept it, will not attend the arbitration, does not acknowledge it and will not implement the result of the arbitration.”

The Philippines introduced the case after China seized the Scarborough Shoal in 2012. Beijing declined to submit formal documentation however filed a place paper arguing the Philippine submission was a couple of sovereignty dispute and out of doors the court docket’s jurisdiction. The PCA rejected the argument and deemed the paper “as effectively constituting a plea.”

“Countries across the region have been taking action and voicing concerns publicly and privately,” U.S. Defense Secretary Ash Carter mentioned earlier this month. “As a result, China’s actions in the South China Sea are isolating it, at a time when the entire region is coming together and networking. Unfortunately, if these actions continue, China could end up erecting a Great Wall of self-isolation.”

© 2016 Bloomberg L.P