AMSTERDAM (Reuters) - Nicaragua violated Costa Rica's sovereign territory by establishing a military presence in parts of a disputed waterway, and must compensate its neighbor, the United Nations' highest court said on Wednesday.
The ruling is the latest stage in a long-running legal battle between the two countries, which have regularly exchanged mutual accusations of violating the other's territory in the wetlands at the mouth of the San Juan river.
The International Court of Justice (ICJ) found for Nicaragua in its countersuit, saying Costa Rica broke the law by not assessing the environmental impact of dredging it undertook in the San Juan river.
But only Nicaragua's violation merited compensation, it said.
The Nicaraguan government recognized the court's decision, and sought to draw a line under the spat.
"Nicaragua and Costa Rica should now look to re-establish mechanisms of dialogue," government spokeswoman and First Lady Rosario Murillo said.
Costa Rican President Luis Guillermo Solis cheered the resolution.
"We are two peaceful nations, who took a case to an international tribunal in circumstances that, in other places, would have likely resulted in armed conflict," he said.
The dispute over the border line between the two Central American nations has been running since an 1858 treaty that attempted to demarcate their territory after their independence from Spain and Mexico.
The ICJ made its latest ruling on the demarcation line in 2011, but the countries returned seeking further clarification after Nicaragua sent soldiers to the waterway.
They were sent in response to Costa Rica's decision to deploy police to guard workers dredging the San Juan river in order to build a road alongside it.
"The activities carried out by Nicaragua in the disputed territory ... were in breach of Costa Rica's territorial sovereignty," judges said, adding that no "hostile acts" had taken place.
The court will itself settle the size of the compensation due to Costa Rica if the two countries fail to agree on it within the next 12 months, the judges ruled.
The court rejected Costa Rica's claim for costs against Nicaragua.
Additional reporting by Ivan Castro in Nicaragua and George Rodriguez in San Jose; Editing by Alan Crosby