The UK government's arms sales to Saudi Arabia are lawful, the High Court ruled on Monday after seeing secret evidence.
The court rejected claims that the government was acting illegally by not suspending weapon sales to the Saudi kingdom, which is fighting a war in Yemen, BBC reported.
The UN claims that Saudi airstrikes against Houthi rebels in Yemen caused thousands of civilian deaths.
The government said defence exports would continue to be reviewed but the Campaign Against the Arms Trade said an appeal against the ruling was planned.
The group had claimed that the UK has contravened humanitarian law and attacked the refusal of the Secretary of State for International Trade to suspend export licences for the sale or transfer of arms and military equipment.
Lord Justice Burnett and Justice Haddon-Cave, sitting in London, said the decision to carry on the arms trade was not unlawful.
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The judges said "closed material", which had not been made public for national security reasons, "provides valuable additional support for the conclusion that the decisions taken by the Secretary of State not to suspend or cancel arms sales to Saudi Arabia were rational".
Equipment sold to Saudi Arabia includes Typhoon and Tornado fighter jets, as well as precision-guided bombs.
The sales contribute to thousands of engineering jobs in the UK and have provided billions of pounds of revenue for the British arms trade.
Saudi Arabia had been supporting Yemen's internationally-recognised government after a civil war broke out in 2015.
Andrew Smith, of Campaign Against Arms Trade, said: "This is a very disappointing verdict, and we are pursuing an appeal."
Rosa Curling, of law firm Leigh Day, which represented the campaign group, said: "Nothing in the open evidence, presented by the UK government to the court, suggests this risk does not exist in relation to arms to Saudi Arabia."
James Lynch, Amnesty International's head of arms control and human rights, said the ruling was "deeply disappointing".
The government said Britain's defence exports would continue to be "under careful review" to ensure they meet the standards of the Consolidated EU and National Arms Export Licensing Criteria.
"We welcome this judgement, which underscores the fact that the UK operates one of the most robust export control regimes in the world," a spokesperson said.
--IANS
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