South Korea is facing a diplomatic challenge as an international tribunal is expected to render its landmark ruling in the Philippines' legal battle against China over their dispute in the South China Sea as early as this month, observers said Tuesday.

Although Seoul is not embroiled in any spat over the contested waters, it has been closely watching the maritime conflict that has escalated geopolitical tensions involving the United States and China -- its security ally and largest trading partner, respectively.

Washington has been pushing to preserve what it calls the "global commons," or freedom of navigation in the strategically crucial waterway, while Beijing claims the lion's share of it. This has posed a diplomatic headache for Seoul as it strives to maintain close ties with both powers.

"The South China Sea dispute poses a strategic dilemma for Seoul," said Hwang Jae-ho, international politics professor at the Hankuk University of Foreign Studies. "It needs to make a prudent and smart move to ensure its diplomatic interests."

In January 2013, Manila instituted arbitral proceedings under Annex VII to the U.N. Convention on the Law of the Sea (UNCLOS) that stipulates "compulsory" dispute settlement procedures, which one party can push for without consent from the other.

The Permanent Court of Arbitration (PCA) in The Hague, the Netherlands, which acts as the registry of the "Annex II arbitral tribunal," is expected to rule this month or next month over a series of issues that Manila has raised.

An issue at stake is the legality of China's "nine-dash line," its U-shaped maritime boundary based on "historical rights." The boundary takes in more than 80 percent of the South China Sea where the world's crucial sea lines of communication (SLOC) coalesce, and massive oil and natural gas fields are thought to lie.

Observers say that should the tribunal rule in favor of Manila, pressure would likely be heaped on Seoul to oppose Beijing's growing maritime assertiveness, which would deal a blow to South Korea's efforts to strengthen ties with China -- its crucial partner for trade, tourism and joint efforts to denuclearize North Korea.

As China has rejected the arbitral proceedings -- and thus forgone opportunities to defend its claims, chances are high that the ruling would turn out to be more favorable to the Philippines, observers predicted.

A ruling in favor of the Philippines would invalidate the legal grounds for China's maritime claims, giving a boost to the U.S.' position that all countries must be given unfettered access to the high seas in the South China Sea, experts said.

"If the ruling says China has no legal grounds to claim the nine-dash line, a large part of the South China Sea could be turned into the high seas where the warships of the U.S, Japan or the Philippines can freely sail," said Lee Ki-beom, research fellow at the Seoul-based Asan Institute for Policy Studies.

"To put it simply, the legal grounds for China's maritime claims to rocks and other low-tide elevations in the South China Sea could fall apart with the ruling in favor of Manila."

In recent years, China has been stepping up its maritime assertions by turning rocks and reefs in the disputed waters into artificial islands capable of supporting military activities, sparking international criticism.

Walking a tightrope, Seoul has taken a cautious stance on the maritime disputes. But Washington has been seen raising pressure on Seoul to "speak up" to protect the global commons in the South China Sea where some 90 percent of South Korea's energy imports pass. 

"The fact that, like the U.S., the Republic of Korea is not a claimant, in my view, gives Seoul all the more reason to speak out because it is speaking not in self-interest, but speaking in support of universal principles and the rule of law," U.S. Assistant Secretary of State for East Asia and Pacific Affairs Daniel Russel said at a forum in June.

Amid growing pressure on Seoul to clarify its position, President Park Geun-hye said at an ASEAN-related conference in November that the freedom of navigation both at sea and in the air in the South China Sea must be preserved. She also opposed the "militarization" of the sea.

Apart from regional geopolitics, South Korea has viewed the South China Sea disputes in the context of energy security and economic interests. Thus, calls may grow for it to do more to keep the waterway open to protect its own interests, though a low-key approach seems to be diplomatically correct for now to stay on good terms with China, analysts noted. 

"Its policy of balancing between the two powers is correct, up to a point. There will come a point when it will have to privately pressure China that its domination of the South China Sea is not in Seoul's interests," Robert D. Kaplan, a prominent geopolitical expert, told Yonhap News Agency via email.

Michael Raska, assistant professor at the S. Rajaratnam School of International Studies of Nanyang Technological University in Singapore, anticipated that Seoul may even need to consider sending its military assets to the contested waters beyond diplomatic statements calling for peaceful resolution of the disputes.

"South Korea may in the long-term undertake specific maritime deployments -- not only to support freedom of navigation and the rights of passage and overflight in the South China Sea, but also to shore up important relationships, prevent the escalation of tensions, and signal concern to China," he said.

However, some experts said that Seoul should make a prudent move to avoid getting needlessly mired in an escalating geopolitical rivalry between the U.S. and China.

"In a broader context, the South China Sea dispute is part of a geopolitical rivalry between the U.S. and China, and South Korea should avoid a situation in which it is dragged into the rivalry," said Lee Dong-ryul, political science professor at Dongduk Women's University.

He also pointed out that the two major powers might also want to deescalate geopolitical tensions, which would, after all, undermine their cooperation required to resolve a series of regional and global challenges including climate change and terrorism.

Many U.S. scholars looked at the China-Philippines case not as a matter of choice between the two claimants but a matter of whether to "uphold the rule of law."

"I think it is a question of whether we believe in diplomacy and international law, and whether we are going to support the outcome -- whatever it is -- that comes out of a duly constituted court. I think that is the choice," said John J. Hamre, the president of the U.S.-based Center for Strategic and International Studies during a forum in Seoul last month. (Yonhap)