The United States and Britain argue that the suspects should be tried in a Scottish or US court, but Libya insists they would not receive a fair trial in either country.
Libya asked the court, formally known as the International Court of Justice, to lift UN Security Council sanctions aimed at forcing the suspects' extradition.
The ruling is likely to increase pressure on Britain and the US to agree to stage the trial in a neutral country, a compromise which Libya says it will accept.
![[ image: width=150]](/olmedia/60000/images/_60615_court.jpg)
The US Government had argued that the World Court has no power to overturn a Security Council decision and should pull out of the case.
The United States and Britain are still fighting for a trial nine years after a suitcase bomb killed 270 people in the air and on the ground in Lockerbie.
The ruling was a boost for some relatives of the victims of Flight 103. But the decision did not settle the judicial deadlock and a trial could still be years away.
The 15 justices announced their authority to wade into the affair in a ruling on Britain's case before the court. They were still ruling on Friday on a separate but similar case brought by the United States.
The United States and Britain both want to try the men on their soil. Libya claims a 1971 civil aviation convention gives it the right to carry out any trial.
Authorities in Tripoli insist the men, Abdel Baset Ali Mohammed el-Megrahi and Al Amine Khalifa Fhimah, are innocent.
The Libyan ambassador to the Netherlands called the ruling a victory for small countries.
Lockerbie trial 'fair in Scotland' - UN
(22 Dec 97 | World)
Lockerbie relatives demand trial
(22 Dec 97 | UK)
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(04 Dec 97 | World)
Lockerbie father "optimistic" about trial
(04 Nov 97 | World)
International Court of Justice
Lockerbie Accident Report from the Air Accidents Investigation Branch
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