The Permanent Court of Arbitration in The Hague has said it will oversee a compulsory conciliation between East Timor and Australia on the maritime boundary between the two.
East Timor asked for the process that could decide which side of the border a large oil and gas field lies, over which the two nations have a revenue-sharing agreement.
East Timor said that Australian espionage targeting its diplomats rendered recent agreements between them flawed.
The decision will exacerbate a rare diplomatic rift between Australia and its neighbor 610km to the north, which it supported during a claim for independence from Indonesia in the late 1990s.
Australia has sought to delay negotiating a permanent border until 2056 at the earliest.
Australia and East Timor will now engage in a conciliation process that is to take place behind closed doors over the next year, the court ruled late on Monday.
The Australian minister of foreign affairs and attorney general said in a statement that existing treaties between the two sides had been “hugely beneficial” to East Timor, but that “Australia accepts the commission’s decision and will continue to engage in good faith.”
“We are committed to working together to strengthen our relationship and overcome our differences in the Timor Sea,” the statement said.
It also said the report to be produced by the commission would not be legally binding.
East Timor Minister of State Agio Pereira welcomed the court’s decision.
“This process is an opportunity to set a good example in our region and we will engage with respect for the commission and its recommendations, ever conscious of the importance of maintaining the best possible relationship with our close neighbor Australia,” Pereira said in a statement.
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