Developer Paddy McKillen has won part of his challenge to the National Asset Management Agency.
The Supreme Court ruled that the decision made to acquire Mr McKillen's €2.1 billion portfolio of loans had no legal effect.
It ruled that the decision was taken by an interim team on December 11 and 14 2009 before the establishment of NAMA on December 21. The court found that NAMA could have made a valid decision after it had been established.
But the consistent assumption by NAMA was that the decision had been made by the interim team and they did not see any necessity for a further decision.
The court found that, contrary to the High Court's judgment, the interim team's decision was not given legal effect by any subsequent act or series of acts by NAMA. It said the question of whether NAMA had made a decision to acquire Mr McKillen's assets was not a purely technical and formal one. It said such a decision was an essential step in the statutory process.
The court found that it was of critical importance in this case that NAMA had never reached the stage of serving the financial institutions involved with an acquisition schedule for Mr McKillen's loans.
The court found against Mr McKillen on the issue of the European Commission's approval of NAMA. It found NAMA had not breached the Commission's decision to approve NAMA.
The court will sit next Wednesday to hear submissions on what will happen to the other issues in Mr McKillen's appeal - the right to fair procedures, the failure of NAMA to take into account relevant factors and the constitutionality of the legislation - in the light of the fact that the Court has ruled there is no decision by NAMA.
The Supreme Court's ruling today could simply mean that the NAMA board can now make an official, valid decision to acquire Mr McKillen's loans and start again with the process of acquiring them.
'No implications' for other NAMA acquisitions
In a statement, NAMA said the outcome was 'obviously a disappointment'. But the agency said the decision related specifically to the particular case as presented by Mr McKillen and did not have implications for other acquisitions now completed by NAMA.
NAMA also said the Supreme Court had ruled that NAMA did not breach State Aid rules. The agency said it would study the ruling carefully over the coming days and reflect on the options ahead.
Asked about the ruling, Finance Minister Brian Lenihan said he would have to study the judgment and discuss it with the Attorney General before making any comment.
