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The South China Sea dispute was settled by a court nobody has ever heard of

Protesters in the Philippines gather outside the Chinese Consulate before a ruling by the Permanent Court of Arbitration on a territorial dispute in the South China Sea. (Bullit Marquez/AP)

BRUSSELS — It is a small institution with an outsize influence on the world map.

And Tuesday's ruling by The Hague-based Permanent Court of Arbitration — on a territorial dispute between China and the Philippines — will be just the latest judgment from an institution that has reshaped borders and taken on powerful governments and public companies for more than a century.

What does it do?

From a grand slate-roofed structure known as the Peace Palace, the Permanent Court of Arbitration convenes tribunals to settle disputes between governments and private citizens having to do with international agreements, including fights over trade, territory and human rights.

It was set up by The Hague Peace Conference of 1899, which was convened by Russian Czar Nicholas II and set up some of the first structures of international law. Typically, the court sets up arbitration to rule on a dispute over a preexisting international agreement. In Tuesday’s case, the Philippines said China’s territorial claims violate the U.N. Convention on the Law of the Sea. The tribunal ruled, in a major blow to Beijing, that China does not have historical rights to justify its expansive claims to the South China Sea.

What are some of its past cases?

Tribunals convened by the court have ruled on contentious border disputes between Ethiopia and Eritrea as well as India and Bangladesh, among others. In 2014, the court issued a $50 billion ruling against the government of Russia on behalf of former shareholders of Yukos, an oil company that was seized by the Russian government after its chairman, Mikhail Khodorkovsky, was arrested in 2003. And it ruled in favor of the island nation of Mauritius when the British government tried to create a protected no-fishing zone around archipelagoes in the middle of the Indian Ocean.

What kind of court is it?

Not a traditional one. Despite its name, the Permanent Court of Arbitration is not a permanent court with a full-time set of judges. Instead, the court sets up temporary tribunals that are designed around each dispute brought to the institution. Proceedings aren’t open to the public unless both sides agree. Sometimes even the rulings aren’t made public.

What power does it have to enforce its rulings?

Some — but in the case of the China-Philippines dispute, it doesn’t have a navy to ensure both sides follow the ruling. The Chinese government has dismissed the legitimacy of the tribunal, and the court has no power to compel China to obey.

But the court is part of a long-established system that governments use to settle disputes with each other. When a government doesn’t like a ruling, it usually seeks to overturn it rather than ignoring it altogether.

In the Yukos ruling, for example, Russia has appealed to Dutch courts to overturn the decision on jurisdictional grounds. Russia won an initial victory, but the case is still working its way through the court system. If the Yukos shareholders prevail, they can try to seize Russian government assets around the world to recover part of the $50 billion award.