The court also backed the panel’s decision that the stake should be sold.

Alinta acquired the 10.25% interest in APT during a transfer of ownership of a 30% holding – later reduced to 26% – from Australian Gas Light in an asset swap with the company.

The court, however, ruled Alinta did not contravene the Corporations Act, as previously declared by the Takeovers Panel.

Alinta said it would consider its legal options on whether to appeal the ruling, but it must make a decision by midnight tomorrow. Otherwise, it will have to divest the stake through the Australian Competition and Consumer Commission.

“As Alinta did not breach the law, the decision to uphold the Takeovers Panel finding of unacceptable circumstances is of course disappointing,” Alinta chief executive Bob Browning said.

APT managing director Mick McCormack welcomed the Federal Court’s decision, declaring it a win for the company's shareholders.

“I would hope that this concludes these matters, which have been a distraction,” the Australian newspaper quoted McCormack as saying.

“APT will continue building value for our unitholders through bringing together a truly national energy transmission business that will continue to grow a competitive energy market in Australia.”

Earlier this month, the ACCC ruled Alinta should sell its stake in APT amid concerns of reduced competition in the pipeline industry.