China Sea ruling an important test: Bishop

Australia is urging China and the Philippines to peacefully resolve the dispute in the South China Sea after a ruling from the international court of arbitration.

On Tuesday, the Permanent Court of Arbitration in The Hague unanimously ruled in favour of the Philippines, declaring China had no historic title over the South China Sea and that the 1982 UN Convention on the Law of the Sea supersedes China's 69-year-old claim to roughly 85 per cent of the disputed territory.

A statement from the office of Minister for Foreign Affairs Julie Bishop late on Tuesday said the ruling was "an important test for how the region can manage disputes peacefully" and reminded both nations "adherence to international law is the foundation for peace, stability and prosperity in East Asia".

The statement urged claimants to "refrain from coercive behaviour and unilateral actions designed to change the status quo in disputed areas".

Australia will continue to exercise freedom of navigation and overflight in the area, and supported the "right of others to do so", the statement said.