Dismissing the petition, Justice P S Gopinathan said Kerala Police has the jurisdiction to register the case since the incident occurred in the territorial waters falling within India's Exclusive Economic Zone making the Indian penal laws applicable.
The Judge said the marines cannot claim sovereignty and also pointed out that 'Enrica Lexie' was not an Italian government owned vessel, but a private ship.
He directed the Italian embassy to deposit the cost in two weeks.
The two marines -- Latore Massimilliano and Salvatore Girone, arrested on Feb 19 are in judicial custody and lodged at the Borstal school here which houses juvenile delinquents.
They have been charged with murder of fishermen Valentine alias Jalestine and Ajesh Binki, who had put out to sea from the Needakara coast in Kollam, by firing at them from onboard the merchant ship whose authorities have maintained that the marines mistook the fishermen for pirates.
The petition filed by Italian Consul General in Mumbai Gian Paolo Cutillo, and the two accused had also sought a stay on all further proceedings in the case pending before a Kollam court.
They had contended that Kerala Police had no authority to conduct investigation and courts in India have no jurisdiction as the incident occurred beyond the Indian territorial waters.