The British High Court has rejected claims that the UK government is acting unlawfully by failing to suspend the sale of UK arms to Saudi Arabia.
The case was brought by Campaign Against Arms Trade (CAAT), which says UK fighter jets and bombs sent to the Gulf state have been used in the conflict in Yemen.
The group 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 and its decision to continue granting new licences.
CAAT says more than 10,000 people have been killed since 2015 as a Saudi Arabia-led coalition intervenes in the Yemeni civil war and the Government is guilty of "repeated and serious breaches" of international humanitarian law.
But Lord Justice Burnett and Mr Justice Haddon-Cave, sitting in London, dismissed the campaigners' application for judicial review, saying the decision to carry on the arms trade was not irrational or unlawful.
The judges agreed that secret evidence, referred to as "closed material", seen by them but not 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".
The judges stressed the court's function was not to make a primary decision but to review the lawfulness of the decision made by the Secretary of State and his ministerial advisers.
They said: "In an area where the court is not possessed of the international expertise to make the judgments in question, it should be especially cautious before interfering with a finely balanced decision reached after careful and anxious consideration by those who do have the relevant expertise to make the necessary judgments."
Their ruling is of importance on several fronts, including its potential impact on the multibillion-pound arms trade generally, which could become even more important to the economy in post-Brexit Britain.
It is also one of the most high-profile cases to date where judges have sat in "closed" private sessions to hear secret evidence.
Special adjudicators allowed to see the closed material are tasked to ensure justice is done and to protect the interests of the applicants who are banned from seeing it for national security reasons.
CAAT lawyers said in a three-day hearing in February the fighting in Yemen had created a humanitarian catastrophe, destroying vital infrastructure and leaving 80% of the population in need of aid.
But the UK had continued to allow sales, with over £3.3bn worth of arms having been licensed since the bombing began in March 2015.
This was despite a substantial body of evidence from NGOs and international bodies suggesting of "a clear risk of a serious violation" of international humanitarian law.
The group's lawyers unsuccessfully argued that, in the face of that evidence, it was no longer lawful to license the sale of arms to Saudi Arabia.
They now say they will seek to appeal against the "very disappointing" verdict.