Principal propagation with certificate authentication

Hi,

I'm doing a Mobile Apps(JBOSS) -> PI -> GRC(SAP) system scenario.
So basically its a synchronous SOAP -> RFC scenario.

To maintain the user context principal propagation was enabled between PI system and SAP GRC system.
I tested this from SOAP UI everything worked fine.

I use basic authentication uid/pwd to connect from SOAP UI and call the Webservice.
This works fine and im able to see the user being propagated.

Now im trying to use certificate authentication from SOAP UI instead of basic authentication.
To do this I changed the authentication method in the SOAP adapter as HTTPs with client authentication.

My requirement is that , I have to use certificate authentication but not necessarily encrypt the data

(no harm in doing it but not mandatory).I'm testing currently from SOAP UI.
My Basis team has configured a Https port and given a Java certificate (.cert file).
I have a few questions are this point.

1.Does using this HTTPs port essentially mean that encryption will be done?

2.what should I do with the certificate ? Do I import that into SSL settings in SOAP UI?

3. Should I enable the security profile in my SOAP adapter as well? If I do that the sender agreement asks

for the certificate for decryption. What should I choose here?

Kindly give me a clear step by step procedure to do this.

Thanks a lot
Shakthi