The World Court has ruled in favour of Malaysia in its long-running sovereignty dispute with Indonesia over two tiny islands off Borneo and any mineral wealth around them.
One of the islands, Sipadan, is a popular diving site with tourists. The other, Ligitan, is used mainly by fishermen.
Malaysia and Indonesia both laid claim to the islands three decades ago, when they embarked on a search for oil and gas in the area.
The two countries agreed to hand the decision over to the World Court in The Hague in 1997 after bilateral talks failed.
Sipadan made headlines in 2000, when rebels from the southern Philippines kidnapped a group of 21 people from the island, including 10 foreign tourists.
The court, formally known as the International Court of Justice, rejected almost all arguments by both sides based on colonial-era maps and treaties.
Instead, it upheld Malaysia's claim based on its use of the islands prior to the dispute.
Reacting to the ruling, Indonesian Foreign Minister Hassan Wirayuda said "it is almost unavoidable not to be deeply disappointed by knowing that maximum efforts by four Indonesian governments since 1997 did not bear fruit as we had expected".
But he said Indonesia was "obliged to respect" the court's decision, adding that it resulted from a "fair, transparent, responsible and dignified" process.
The disagreement surfaced in 1969, when the two countries sought to establish maritime boundaries to assign offshore oil exploration permits.
Sipadan became internationally known in the 1980s - after being filmed by ocean explorer Jacques Cousteau, who described it as an "untouched piece of art".
The Malaysian authorities then built resorts on the island, and the spectacular sea life around its coral reefs soon attracted divers from around the world.
Indonesia protested in the early 1990s, saying Malaysia had agreed to a development standstill.
Correspondents say little oil has been found in the area, and the dispute seems more an issue of national pride than of economic interest.