International legal disputes over the Diaoyutai Islands are mainly over claims of sovereignty by virtue of occupation and prescription. The islands were part of Qing territory before 1895 and were not terra nullius (ownerless land). As the Japanese cabinet did not make public the resolution it passed regarding the islands, the decision was never legally binding on the Qing dynasty and later the Republic of China (Taiwan).
The Diaoyutai Islands appertain to Taiwan. When Taiwan was ceded to Japan, so were the islands, based on the logical interpretation of Article 2 of the Treaty of Shimonoseki on the cession to Japan of “the island of Formosa [Taiwan], together with all the islands appertaining or belonging to the said island of Formosa.” Since the Diaoyutai Islands were part of Japanese territory during the Japanese occupation of Taiwan, there was no outside objection to Japanese people using the islands, and prescription was not an issue. When the United States transferred the administrative rights over the Diaoyutai Islands and the Ryukyu Islands to Japan in 1972, it explicitly stated that this would not have a bearing on territorial claims by disputing parties.