The high court in India's north-eastern state of Assam has held both the United Nations children's organisation and the state government responsible for the death of more than 30 children.
The children died after they were administered vitamin A supplements in November 2001.
The court has asked the state government to pay compensation to the families of the children who died.
Many children became ill after receiving the vitamin A doses
Unicef maintains that there was nothing wrong with the Vitamin A it supplied to the Assam government.
A two-judge bench of the Guwahati High Court in Assam pronounced its verdict on a public interest case that two Assam residents filed against the state government and Unicef.
The chief justice of the High Court, PP Navlekar, and Justice AH Saikia said in their judgement that Unicef had introduced stronger doses of Vitamin A by replacing the traditional two-millilitre spoon with the five-millilitre cups.
But health workers were not properly trained and briefed, leading to overdoses that many of the sick children could not stand.
The verdict said that there was an element of negligence in the way the Assam health department had administered the supplements, leading to the death of so many children.
The High Court ordered that families of the children should be paid compensation at the rate of 20,000 rupees over and above the 5,000 rupees that each family has been already paid.
Unicef says there was nothing wrong with the Vitamin A supplements it supplied to the Assam government and the state health department was properly briefed about the change of dose.
Assam government officials are refusing to comment about the High Court verdict, but say they will abide by the ruling.