A Hong Kong court ruled in favour of mainland Chinese law operating in the city's new cross-border rail terminus Thursday, despite critics warning the move threatened the territory's judicial independence.

Under Hong Kong's mini-constitution -- the Basic Law -- China's national laws do not apply to the city apart from in limited areas such as defence.

But Judge Anderson Chow backed the controversial arrangement that came into force when the city's high-speed rail link to the mainland opened in September.

He said China's National People's Congress Standing Committee (NPCSC) had "the ultimate power of authoritative interpretation of the Basic Law".

Opponents of the new set-up who had filed the legal challenge vowed to fight on.

"We are not afraid of losing, we just want justice," former lawmaker Leung Kwok-hung said, adding he would appeal the decision.

Pro-democracy lawmaker Tanya Chan said this is an "extension" of the power of the NPCSC and would greatly affect Hong Kong's judiciary, legislature and administration.

Critics warned giving away control of land in the heart of Hong Kong is a dangerous precedent as Beijing seeks to tighten its grip on the city following mass pro-democracy protests in 2014 and the emergence of an independence movement.

Hong Kong also enjoys rights unseen on the mainland, including freedom of speech, protected by a deal made before the city was handed back to China by Britain in 1997. But there are growing fears those liberties are being eroded.

There have also been questions over how Hong Kong citizens will be required to behave in the zones subject to Chinese law, whether they will be punished for using Facebook and Twitter -- banned on the mainland -- or targeted for wearing clothing with political slogans.

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