The Baselworld fair organisers have withdrawn a claim for damages following a Federal Health Office ban on Asian exhibitors during the 2003 Sars crisis.
Swiss Exhibition, which had originally sought SFr50 million ($39 million) from the health authorities, decided to give up after a Federal Court decision.
In April 2003 the Federal Health Office imposed a ban on staff and visitors from Hong Kong, China, Singapore and Vietnam just two days before the watch and jewellery fair opened in Basel and Zurich.
On October 21 this year the Federal Court confirmed that the health authorities' decision to ban 400 Asian exhibitors was justified.
The tribunal rejected claims from Swiss Exhibition that they had lost millions of francs in business.
Thomas Zeltner, the health office director, said at the time that the restrictions were designed to prevent the spread of Severe Acute Respiratory Syndrome (Sars).
The health authorities also stated that underestimating the potential impact of an epidemic in Switzerland could have been disastrous.
But Swiss Exhibition felt such measures were unjustified and would not stop a Sars outbreak, adding that the decision threatened its livelihood.
The interior ministry confirmed the health office decision last December, prompting the appeal to the country's highest court.
"If there is a similar case, we know what the legal situation is now," said fair spokesman Christian Jecker last month. "We could face the same kind of problem with bird flu."
Baselworld itself faced claims worth millions of francs from irate Asian exhibitors after the ban. What's more, to attract them back to the fair, the organisers had to build a special exhibition hall costing more than SFr40 million.
The annual fair, which is not open to the public, is the biggest of its kind in the world. It is estimated that up to half of global watch and jewellery turnover at the wholesale level comes from business conducted during the eight days of the exhibition.
swissinfo with agencies
Baselworld is the world's largest watch and jewellery fair, attracting around 2,200 exhibitors from 47 countries.
In 2003 the outbreak of Sars led Switzerland's Federal Health Office to ban companies from affected nations.
The 2003 event was the first to be co-hosted by Zurich, but Baselworld organisers have decided to stage future editions solely in Basel.
In 2006 the 34th edition of Baselworld will be held from March 30 to April 6.
The 2005 fair attracted 89,700 visitors who spent the equivalent of 800,000 nights in hotels in and around Basel.