A higher court in South Korea has ruled that a stolen ancient Buddhist statue belongs to a Japanese temple that had publicly displayed it for more than 20 years.

The higher court's ruling on Wednesday overturned a lower court ruling that ordered the statue to be handed to a temple in South Korea.

The figure of a bodhisattva in the lotus position was stolen from the Kannonji Temple on Tsushima Island in Nagasaki Prefecture, southwestern Japan in 2012. It was later found in South Korea, and the statue is now held by the country's government.

The Busuksa Temple in central South Korea, which claims ownership of the statue, filed a lawsuit demanding that the government hand it over. It argued that the figure was previously stolen from the Korean Peninsula by Japanese pirates in medieval times.

A district court ruled in favor of the Busuksa Temple in 2017. The government appealed the ruling to the higher court.

In Wednesday's ruling, the court denied the Busuksa Temple's ownership of the statue. It said the statue belongs to Kannonji Temple, as the temple had possessed the statue publicly for more than 20 years.

The Busuksa Temple rejected the latest court ruling and indicated that it would appeal.

Tokyo has been demanding that the South Korean government return the statue to Japan.

Tanaka Sekko, a former chief priest of the Kannonji Temple, said he is glad that a South Korean court has for the first time acknowledged the legitimacy of his temple's claim and described the decision a long-awaited step forward.