The 20-inch gilt bronze statue of a Buddhist Bodhisattva was stolen from a Japanese temple in 2012 by South Korean thieves, who were caught trying to sell it after returning home.

The Buseoksa Temple in South Korea filed a legal case in 2016 claiming ownership of the statue, which has been in the custody of the government, saying Japanese pirates had plundered it centuries ago.

South Korea's Supreme Court, however, upheld a lower court's decision in February rejecting the temple's claim, and said the Seoul government, the defendant in this case, had to return it to Japan, acknowledging its ownership.

South Korea's foreign ministry said it respects the top court's decision.

"The return procedures will be decided by our relevant agency in accordance with related laws and regulations," a ministry spokesperson told a briefing.

The case has been closely watched in both countries, traditional rivals whose relations have for decades been frayed by historic feuds.

The Japanese temple, Kannonji, was not a direct party to the suit but had argued that the artefact was not acquired illegally through pirates but through legitimate trade.

(Reporting by Soo-hyang Choi and Jack Kim; Editing by Raju Gopalakrishnan)