The Federal Court has confirmed that the health authorities were right to ban 400 Asian exhibitors from the Baselworld watch fair during the 2003 Sars crisis.
The tribunal rejected claims from the event's organisers that they had lost millions of francs in business.
The Federal Health Office imposed a ban on staff and visitors from Hong Kong, China, Singapore and Vietnam just two days before the fair opened in Basel and Zurich in April 2003.
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 the watch and jewellery fair's organisers, Swiss Exhibition, said such measures were unjustified and would not stop a Sars breakout, 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.
Baselworld's organisers, who filed a claim for SFr50 million ($39 million) in damages, say they now know what to expect in the future.
"If there is a similar case, we know what the legal situation is now," said fair spokesman Christian Jecker. "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. And to attract them back to the fair, the organisers had to build a special exhibition hall at a cost of more than SFr40 million.
The organisers' own claim was frozen in 2004. "We will see if we reactivate it when we find out how the court justified its decision," said Jecker.
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
The 34th edition of Baselworld will be held from March 30 to April 6 next year.
This year, there were 2,197 exhibitors from 45 countries for this year's edition.
27.1% of exhibitors came from Asia, compared with 18.8% from Switzerland.
The fair attracted 89,700 visitors who spent the equivalent of 800,000 nights in hotels in and around Basel.