Australia can reclaim a proposed Russian embassy site but will need to compensate the authoritarian state for cancelling its lease on the land.
In 2023, Australia quickly passed laws to cancel Russia's lease on a plot of land where it planned to build an embassy a few hundred metres from Parliament House in Canberra.
The government claimed the site could pose a threat to national security.
Russia described the cancellation of the 99-year lease, which was granted by the Australian government in 2008, as a hostile action amounting to "Russophobic hysteria".
It took the fight to the High Court, arguing the laws were unconstitutional and there was no evidence the embassy posed a national security threat.
The High Court on Wednesday ruled in the federal government's favour, finding the laws were valid.
However, it found Russia was entitled to compensation, with the government also required to pay half of Russia's legal costs.
Construction at the site stalled, but a Russian official squatted on the site to frustrate any Australian effort to reclaim it. Source: AAP / Mick Tsikas
ASIO provided 'specific advice' about site
Top lawyer Bret Walker SC, representing Russia, previously argued it was offensive to assume people would willingly give up their property without compensation because national security grounds were invoked.
He cited an army barracks as an example, saying the Commonwealth would be within its rights to acquire land around the structure to protect security, but would still be expected to pay the owners.
Solicitor-General Stephen Donaghue argued the government had the power and authority to make laws stripping the Russians of their lease.
The Commonwealth also relied on "specific advice" about the nature of the construction that was planned and the capacity the site's location would provide the Russian mission.
The advice from ASIO was not detailed in court due to public interest immunity protections.
Compensation should not be paid to a nation "for problems they cause themselves", Donaghue told the High Court previously.
Walker said it was "really disturbing" to propose the taking of land without compensation on preemptive national security grounds where no explicit threat had been proven.
He said such a precedent was absurd and would mean "everyone is to be regarded, until proven otherwise, a terrorist threat".
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