The Supreme Court has upheld an earlier ruling that found a Sri Lankan citizen who arrived in New Zealand in 2001 was eligible to claim refugee status.
The Attorney-General had appealed against the earlier Court of Appeal decision.
The man had been chief engineer on a cargo vessel owned by the Tamil Tigers, during a voyage in which weapons and munitions were taken to Sri Lanka for the group's use.
The Refugee Status Appeals Authority found that before the ship embarked the man had known the nature of its cargo and the atrocities committed by the Tamil Tigers.
The Crown said that made him complicit in the Tamil Tigers' atrocities and disqualified him from refugee status.
However the Supreme Court has ruled it was not shown that the man's activities were actually linked to any atrocities.
It has referred the matter back to the Refugee Status Appeals Authority for further consideration.