"The world is experiencing a disregard for international laws, and many countries are affected because the big powers take the law into their own hands and they do things which are contrary to their stand on international, management of international relations," PM Mahathir Mohamad said at a joint press briefing with his Vietnamese counterpart Nguyen Xuan Phuc.
Mahathir is on a three-day official visit to Vietnam between Monday and Wednesday.
The Malaysian PM said he and PM Phuc had talked and exchanged on overlapping claims over countries' continental shelves.
"We believe that such a dispute should be settled in a peaceful manner, through negotiation, through arbitration and possibly through a court of law," Mahathir said.
His statement came in the context of Chinese oil survey vessel Haiyang Dizhi 8 and escort vessels illegally reentering Vietnamese waters near the Vanguard Bank in the southern part of the South China Sea, known in Vietnam as the East Sea, on August 13.
The vessels had left Vietnam’s exclusive economic zone (EEZ) and continental shelf on August 7 after trespassing for a month.
For his part, Phuc said he and Mahathir agreed to cooperate closely with other ASEAN members to ensure peace, stability, security, safety, freedom of navigation and aviation in the East Sea and resolve all disputes by peaceful means, in compliance with international laws, the United Nations Convention for the Law of the Sea (UNCLOS), and the Declaration in the South China Sea (DOC).
The countries pledged to respect for diplomatic and legal processes, restrain from using or threatening to use force or militarize, and make efforts to reach an effective and legally binding Code of Conduct (COC) between China and the ASEAN in the East Sea soon, he said.
Vietnam and Malaysia have long been embroiled in maritime disputes with China in the South China Sea. The Philippines, Brunei and Taiwan also have claims to parts of the potentially energy-rich maritime territory, also a busy shipping lane.
The meeting between Malaysia and Vietnam took place amid China's increasing aggression in the South China Sea and the Indian Ocean, which has drawn criticism from leaders around the world.
At a news briefing in Tokyo on Tuesday, Japanese Foreign Minister Taro Kono said the international community, including Japan, is deeply concerned about the situation in the South China Sea, and that Japan opposes any actions taken by any country to increase tensions in the sea, Vietnam News Agency reported.
He called for related parties in the sea to demilitarize the facilities or entities there and resolve all disputes in accordance with international laws.
Taro Kono also suggested that the international community oppose any coercive actions aimed at changing the status quo in the waters.
The Pentagon expressed concerns over China's "bullying tactics" on Monday, days after similar comments were made by the U.S.'s State Department and National Security Advisor John Bolton.
Australian PM Scott Morrison also shared concerns over complicated developments in the South China Sea as he visited Hanoi last week.
Addressing a joint press conference, Morrison called for principles of international law to be upheld in the region, to ensure nations can pursue the development opportunities which exist within their EEZ and sea boundaries.
The issue of Chinese vessels intruding into Vietnamese waters also cast a shadow over the 52nd ASEAN Foreign Ministers' Meeting held in Bangkok, Thailand, between July 29 and August 3.
Vietnam’s Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh had denounced China's activities at the meeting, calling them "illegal" and "serious violations of Vietnam's sovereignty and jurisdiction rights."