Foreign Minister Julie Bishop called on both China and the Philippines to abide by the ruling and warned China that it would pay "strong reputational costs" if it ignored the finding. Labor senator Stephen Conroy says Australia should stand up to China's 'bullying behaviour' in the South China Sea Credit:Alex Ellinghausen However Beijing has already said that is precisely what it will do, insisting the court has no jurisdiction. Ms Bishop told the ABC that Australia should be "working to de-escalate tensions, not increase them". But underscoring a widening political gulf in the traditionally bipartisan area of foreign and security affairs, Senator Conroy said Australia needed to take action if China flouted the "international rules-based order".

"It is vital that we not only talk the talk of supporting the system but we need to act and be seen to act to support the system," he told the ABC from Washington. A disputed island in the South China Sea. Credit:AP He said the Turnbull government was "continuing to pretend" that it was carrying out so-called freedom of navigation operations – a reference to the fact Ms Bishop said Australia was sailing and flying through the South China Sea. But Australian military ships and planes have not gone within the critical 12 nautical mile zone of any Chinese-claimed islands as the US had done in a direct challenge to the claims. Anti-China protesters mount a rally against China's territorial claims in front of the Chinese Consulate in Makati, Philippines. Credit:Getty

"This is in actual fact not the case … and it's time that Australia demonstrated that it supports the international system," he said. "Australia should authorise its forces to both sail and fly over the areas of the South China Sea. "China's been engaged in an aggressive and at times bullying performance and has now been called out by the international court. If countries are able to just sit back now and ignore the ruling … then Australia will be in a situation where we have failed the test of supporting the international system." Senator Conroy agreed with Ms Bishop that all parties should show restraint in the wake of the ruling but added "the problem is one of the parties has indicated that it was going to ignore the ruling". "Its actions in the last few weeks have become even more aggressive provocative, including sinking vessels and ramming vessels."

He said all parties should de-escalate, but added that "if one party continues to say, 'I do not accept the jurisdiction', then countries that are able to support the international rules based system should".