The Court of Arbitration for Sport (CAS) upheld the decision taken by European soccer body UEFA last December to prohibit Spanish Primera Liga side Malaga from playing in next season's Europa League.
The CAS ruling Tuesday backs UEFA' s decision to exclude the Spanish club from playing in Europe for a season as a result of their financial fair play rules, reports Xinhua.
The original decision was taken on December 21 as Malaga still owed money to players and also to clubs from which they had purchased players who in the previous season had taken the club to a historic fourth place finish and a place in this season's Champions League.
Malaga produced a magnificent first Champions League campaign and were moments away from securing a place in the semi-finals of the tournament before being knocked out by two late goals from Borussia Dortmund, who ended up as beaten finalists.
The club coached by Manuel Pellegrini also performed well in the Primera Liga to finish in sixth place and thus earn a ticket for the Europa League, although CAS' decision means Malaga will now not be able to compete.
On hearing the news, the club issued a communique saying the decision was "unprecedented in judicial-sporting circles in the world of football", and one with which Malaga expressed its "total disagreement," given that Malaga had "fulfilled all of the financial parameters necessary to compete in Europe in the 2013-2014 season."
Malaga are not the first Spanish side to be excluded from playing in Europe for financial reasons as UEFA banned Mallorca from competing in the 2010-2011 season and Mallorca were replaced by Villarreal.
Meanwhile, Tuesday's ruling opens the door for either Rayo Vallecano or Sevilla to play in Europe next season: Rayo finished eighth in the league table, but financial issues mean that the Madrid based club has for the moment been refused a UEFA license for next season.
Rayo have said they will appeal, but if that appeal is turned down, as appears likely, ninth placed Sevilla will take up the final Europa League spot despite having finished in ninth place with just 50 points from 38 matches.