The NSW Supreme Court has dismissed an appeal by RugbyWA to keep the Western Force in Super Rugby.
Justice David Hammerschlag dismissed the appeal against an arbitration ruling in favour of the Australian Rugby Union that allowed the governing body to cut the Force from the Super Rugby competition.
Despite the ruling, RugbyWA are likely to continue their fight for the Force to survive with billionaire back Andrew "Twiggy" Forrest prepared to take the matter as far as the High Court.
The ARU had agreed to cut a team in March in a meeting with Sanzaar officials in London where the broader decision was made to reduce the Super Rugby competition from 18 teams to 15.
In July, the South African Rugby Union excluded the Kings from Port Elizabeth and the Cheetahs from Bloemfontein from Super Rugby with both teams joining an expanded Pro 14 competition in Europe alongside teams from Scotland, Ireland, Wales and Italy.
RugbyWA believed the ARU couldn't axe the Force because the national body signed an "alliance" deal guaranteeing the franchise's future until the end of the tournament's current broadcast deal in 2020.
The ARU successfully argued in arbitration that deal no longer stood because the TV rights had been renegotiated to reflect the 15-team competition.
But the bitter wrangle took another twist when RugbyWA, backed by billionaire Andrew Forrest, took the issue to the NSW Supreme Court which took 12 days to hand down its ruling on Tuesday.
The latest development comes as the Wallabies get set to play the Springboks in Perth this weekend in a Rugby Championship test.
RugbyWA released a statement saying the decision would cause "irreparable damage" and that the ARU were guilty of "prioritising the preferences of the Sanzaar's partners rather than a respect for the domestic game".
"RugbyWA will evaluate its legal options and consider grounds to seek leave to appeal to the NSW Court of Appeal in the coming days," the statement read. "RugbyWA also welcomes the proposed Senate inquiry proposed by Senator Linda Reynolds into the conduct of the ARU.
"RugbyWA hope that under new leadership, the ARU starts to openly and honestly address the real issues affecting the performance of Australia's professional teams.
"As a proud and passionate rugby state, rugby union will continue in Western Australia but the decision to remove the state's professional franchise and aspirational pathway will do irreparable damage to the code in the west.
"The RugbyWA Board and management and Western Force staff and players are very grateful for the assistance and support of Mr Andrew Forrest AO and look forward to exploring other playing options for the Western Force and rugby union players in Western Australia."
The judgment reads: "The parties do not have identical interests in the longevity of the Alliance Agreement, although hopefully they both had the interests of furthering the game of rugby union in mind. It is to be remembered that ARU owns the Force. If the alliance comes to an end, it owns the Force unconditionally without any potential obligation to sell it back in the future, and can do with it what it likes, even destroy it.
"As the facts of this case demonstrate, they were supposed to be allies, but they were not friends."
Photo by: GETTY IMAGES Caption: The Western Force have been fighting for their Super Rugby future on and off the field this year