In a legal defeat for China, the Hague-based tribunal rejected Beijing's claim that the disputes were about its territorial sovereignty and said additional hearings would be held to decide the merits of the Philippines' arguments.
The news came as China's naval commander told his U.S. counterpart there is a risk of "a minor incident that sparks war" if the United States continues with its "provocative acts" in the South China Sea, the Chinese navy said on Friday.
The two officers held talks after a U.S. warship challenged China's territorial assertions in the South China Sea on Tuesday by sailing within 12 nautical miles of one of Beijing's man-made islands in the Spratly archipelago.
Admiral Wu Shengli made the comments to U.S. chief of naval operations Admiral John Richardson during a video teleconference on Thursday, according to a Chinese naval statement.
"If the United States continues with these kinds of dangerous, provocative acts, there could well be a seriously pressing situation between frontline forces from both sides on the sea and in the air, or even a minor incident that sparks war," the statement paraphrased Wu as saying.
"(I) hope the U.S. side cherishes the good situation between the Chinese and U.S. navies that has not come easily and avoids these kinds of incidents from happening again," Wu said.
The U.S. patrol on Tuesday was the most significant U.S. challenge yet to territorial limits China claims around its artificial islands in one of the world's busiest sea lanes.
In the Hague, China has boycotted proceedings and rejects the court's authority in the case. Beijing claims sovereignty over almost the entire South China Sea, dismissing claims to parts of it from Vietnam, the Philippines, Taiwan, Malaysia and Brunei.
The tribunal found it has authority to hear seven of Manila's submissions under the United Nations Convention on the Law of the Sea (UNCLOS) and China's decision not to participate did "not deprive the tribunal of jurisdiction".
The U.S., a treaty ally of the Philippines, welcomed the decision, according to a senior U.S. defense official.