In a six to one judgment (Justice Heydon dissenting), Chief Justice Robert French ordered that Immigration Minister Chris Bowen be restrained from sending asylum seekers to Malaysia due to the fact that the deal was made "without power and is invalid".

The Court found that under s198A of the Migration Act 1958 (Cth), the Minister could not validly declare Malaysia as a country to which asylum seekers could be sent for processing unless it was legally bound by international or domestic law to provide procedures for assessing asylum seekers' need for protection; provide protection for asylum seekers while awaiting determination of their refugee status; and provide protection for those given refugee status until their voluntary return to their country of origin or resettlement in another country.

The Court held that the general powers of removal of "unlawful non-citizens" cannot be invoked if the country does not meet these requirements. It was thus held that because Malaysia is not legally bound to provide the access or protections the Migration Act requires, the deal is unlawful.

The Court emphasised that in making judgment, it expressed no view about whether Malaysia meets relevant human rights standards or whether asylum seekers are treated fairly or appropriately.

The Government had intended to send 800 asylum seekers arriving in Australia by boat to Malaysia in return for 4,000 refugees from Malaysia over four years.