The Russian government on Wednesday lost a legal bid at Australia's High Court to construct a new embassy near the country's parliament building.
Moscow was granted a 99-year lease in 2008 after paying nearly 3 million Australian dollars ($2 million) for the site, which lies around 400 meters (1,312 feet) away from the parliamentary precinct.
However, the lease was revoked in 2023 after Australia's parliament passed a law that prevented the project from going ahead.
Australian Prime Minister Anthony Albanese at the time said the government had received "very clear security advice" from the country's intelligence agency about "the risk presented by a new Russian presence so close to Parliament House."
That move sparked a years-long legal battle between the two countries, with lawyers representing Moscow arguing that the law was unconstitutional.
On Wednesday, the High Court upheld the law as valid.
However, the court also ruled that the Australian government must pay compensation to Russia.
Following the 2023 law change, Australia's attempts to seize the land quickly were thwarted by a middle-aged Russian diplomat who squatted inside a small security shed on the site.
He faced frigid temperatures during his brief occupation, entertaining himself with television, snacking on chips and sporadically stepping out into the cold to smoke cigarettes.
The squatter was forced out just days later, after a preliminary High Court decision backed the government's attempts to evict Russia from the site.
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