A panel of the UN-backed International Civil Aviation Organisation erred in not considering the failure of Qatar to tackle terrorism and extremism under the 2013-14 Riyadh Agreements, the UN's highest court has heard.
The UAE, Saudi Arabia, Bahrain and Egypt set out their arguments in an aviation dispute with Qatar on Monday.
Speaking at the start of proceedings, the UAE's representative told the International Court of Justice that the issue was Qatar had faced legitimate counter-measures.
"Qatar's support for terrorist groups is well known and widely reported," said Hissa Al Otaiba, the UAE ambassador to the Netherlands.
"Since 2010, the scourge of terrorism has claimed countless victims in our region. It has turned countries upside-down at great cost to their people."
The member countries of the Arab Quartet maintain that airspace restrictions on aircraft to and from Qatar are an intrinsic part of the boycott of the country introduced by its neighbours in 2017.
The argument before the court on Monday was that the aviation body's council had overreached its jurisdiction by finding against these regulations when a broader dispute was unresolved over Qatar's breaches of its undertakings in the Riyadh Agreement.
"Let us start at the beginning: is there a dispute between the parties? Yes," said Malcolm Shaw, QC, appearing for the UAE. "Can the core elements of a dispute be conveniently sliced up?"
Mr Shaw said the court must find that the panel had gone beyond its remit.
"Is the jurisdiction of the ICAO council sufficiently expansive to encompass these issues? That really is the issue," he said.
Doha's leaders funded militant groups, hosted their chiefs and used the region's airspace unlawfully in the process, it was claimed.
The case at the Peace Palace in The Hague relates to restrictions on Qatari planes using the airspace of the surrounding countries since June 2017.
"This small country has used its tremendous wealth to spread chaos", said Amgad Ghaffar, Egypt's ambassador to The Netherlands.
Ambassadors and lawyers told the court the aviation row was a distraction from the four nations' broader dispute with Qatar.
"Qatar has openly admitted that their airspace restrictions are incidental to a longstanding dispute that is wholly unrelated to civil aviation," Mr Ghaffar said.
Ms Al Otaiba said the Arab allies had "unsuccessfully sought for years to persuade Qatar to change course".
"It is difficult to overstate the painstaking dialogue, consultation and negotiation that take place and the encouragement provided to Qatar" to comply to the Riyadh agreement signed in 2013.
Ms Al Otaiba said the decision to restrict Qatari aircrafts' use of the airspace over surrounding countries was justified.
She referred to the kidnapping and ransom of two dozen Qataris, including members of the royal family, in December 2015.
They were seized during a hunting trip to southern Iraq and only freed when hundreds of millions of dollars, thought to be among the largest ever ransom payment, was made to their captors.
"In April 2017, Qatar attempted to pay hundreds of millions of dollars to terrorist groups, including groups affiliated with Al Qaeda, with a ransom," Ms Al Otaiba said.
"Qatar used a Qatar Airways airline to fly the cash into Iraq. Qatari officials were on board.
"This serious episode occurred a little over a month before the appellants announced the termination of relations in June 2017.
"It demonstrates all too well the security and stability concerns raised by raised Qatar's unlawful use of airspace of other countries."
The ICJ also heard that the UN Security Council-designated funder of terrorism, Khalifa Al Subaiy, was operating freely in Qatar without restrictions.