Nauru's government has won a court case against a US-based funds management company, clearing the way for a freeze on the nation's bank accounts to be lifted.
In 2012, a court ruled that Nauru owed 14 million US dollars to the fund manager, Firebird, which ballooned to 26 million dollars when none of the money was repaid.
This week, the government's Westpac bank accounts were frozen as Firebird tried to recover the debts.
However, Nauru challenged the freeze at the Supreme Court in New South Wales, saying that as a sovereign nation it was immune from the orders to freeze the accounts.
Acting Justice Young agreed, lifting the freeze and giving Firebird a week to appeal against the decision, after which the Nauru government can access its bank accounts.
Nauru will still have to repay its debt to Firebird.