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Australia’s highest court on Wednesday rejected Russia’s challenge to a law that evicted the state on security grounds from a site where Moscow wanted to build its new embassy.

Seven High Court judges unanimously ruled that while the Australian government was entitled to cancel the lease in the national capital Canberra, it also owed Russia compensation.

A Russian diplomat seen squatting on the site of Russia’s proposed embassy in Canberra in 2023, despite the lease being cancelled.Credit: Bloomberg

Australia must pay half Russia’s legal costs for bringing the case to court.

Attorney-General Michelle Rowland said she welcomed the court’s finding that the government had acted lawfully in terminating the lease.

“Australia will always stand up for our values, and we will stand up for our national security,” Rowland said in a statement.

“The government will closely consider the next steps in light of the court’s decision,” she added, referring to paying compensation.

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The Russian Embassy did not immediately respond to requests for comment.

The Australian government in 2008 granted Russia a lease over the land 300 metres from Parliament House to build a second embassy. Russia continues to occupy a Soviet-era embassy in the suburb of Griffith further from the parliament.

In 2023, Prime Minister Anthony Albanese said at a press conference his government “received very clear security advice as to the risk presented by a new Russian presence so close to Parliament House.”

The Parliament passed emergency legislation cancelling the lease on the same day.

The law came after Russia won a Federal Court appeal against local Canberra authorities’ decision to evict.

AP