East Timor says it won't be deterred from challenging a multi-billion dollar oil and gas treaty with Australia in The Hague despite raids on a lawyer's office and the home of a key witness.
"Unfortunately we have to do this against the backdrop of the past 48 hours in Australia", East Timor's ambassador to the UK, Joaquim da Fonseca, said after the meeting.
Officials from both countries met in the Netherlands for seven hours on Thursday with a full hearing at the Permanent Court of Arbitration now likely in late 2014.
"(But) despite the events in the past 48 hours we are not deterred to proceed with the case," he told reporters outside the Peace Palace, in reference to the raids and seizure of documents that could impact on Timor's case.
"We are not going to be deterred."
Mr da Fonseca said the talks aimed to establish the rules for the full arbitration hearings next year. They were co-operative and amicable, he said.
There will now be written pleadings, before full oral hearings at the tribunal likely in September or October.
East Timor has accused Australia of bugging its cabinet office during 2004 negotiations regarding the Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).
This week the domestic spy organisation ASIO raided the Canberra office of a lawyer acting for East Timor, Bernard Collaery, and detained a former spy who has given evidence of the Dili espionage operation.
Passports belonging to the former ASIS officer and his wife were cancelled.
Asked whether the arbitral tribunal would be able to hear from the key witness in 2014, Mr da Fonseca said: "I cannot comment."
Attorney-General George Brandis on Thursday told the Senate the treaty East Timor wants set aside required "prior consultation" before arbitration could be invoked.
"One of the grounds on which Australia disputes the jurisdiction of the arbitral tribunal in The Hague is that we contend that the government of Timor-Leste has not sufficiently engaged in or exhausted the prior consultation machinery before referring the matter to arbitration," he said, adding the Australian government stood by the CMATS treaty.
But East Timor's ambassador insists his government is "very, very confident" of its case.
"Timor-Leste is aware of that (prior consultation) position and has also made it very clear that we have come to The Hague because we have done enough and have not been satisfied with the result."
Mr da Fonseca concluded: "Australia is a very good friend of Timor-Leste and we would not want to frustrate our relationship - let alone to do that with something that we are not very sure about."
Australia was represented at The Hague by Solicitor-General Justin Gleeson and Cambridge University law professor James Crawford. They declined to comment.