The High Court has thrown out Ipswich Borough Council's request to extend its injunction against Novotel.
The council had challenged the Home Office for the takeover of Novotel in Grey Friars Road around two weeks ago, to house asylum seekers.
An emergency injunction was granted by the High Court until November 7 against Fairview Hotels (Ipswich) Limited and Serco Limited.
As part of that ruling, Novotel or any other hotel in the borough was prevented from taking in any additional refugees.
Today's announcement is being considered a landmark judgment with the High Court's Mr Justice Holgate refusing injunction bids from Ipswich Borough Council and East Riding of Yorkshire Council.
The judge said: “It is said that the Novotel is the largest hotel in the centre of Ipswich and that the loss of the accommodation would be damaging to the hospitality and leisure economy of the town, given its close proximity to restaurants and bars.
“It is arguable that this alleged harm is a planning consideration.”
However, he added: “The continuation of the injunction would also cause other important harm in each case.
“The asylum seekers who would be accommodated at these two hotels are entitled to have their claims for asylum dealt with.
“Some will be successful. Some will not. It is not disputed that the merits of those claims are of no relevance in these proceedings.
“What is relevant, however, is the statutory duty of the [Home Office] to provide accommodation for destitute asylum seekers who would otherwise be homeless.”
The council had asked for extension of an interim injunction to stop further asylum seekers being placed at the four-star Novotel hotel in Ipswich city centre, where 72 people were already being housed.
Lawyers has previously argued there had been an “unauthorised material change of use” under planning rules through the Home Office’s attempts to book accommodation in Hull and Ipswich.
They argued the interim court orders could be extended by four to six weeks ahead of a final hearing on the issues in the cases.
The judge said: “In reality, if either or both of the injunctions were to be continued, the Home Office would have to look for accommodation elsewhere.
“It is clear from the evidence that it is difficult to secure hotels suitable for single-use contracts. The supply is limited.”
“I consider that the factors in favour of discharging the injunction clearly outweigh those in favour of continuing it,” Mr Justice Holgate said about both applications.
Speaking after the decision, Jade Chalmers, partner at Howard Kennedy LLP, representing Fairview Hotels said: Mr Justice Holgate has refused Ipswich Borough Council's ("IBC") application to extend the temporary injunction against Fairview Hotels.
"Mr Justice Holgate did not believe that it would be commensurate with the evidence on alleged planning harm and urgency for the injunction to be continued until trial.
"Mr Justice Holgate held that IBC made no real attempt to investigate how the Novotel would be used and that the evidence on the planning consequences of any change of use was limited.
"Mr Justice Holgate also reminded parties of key legal principles of necessity and expediency when considering issuing enforcement proceedings.
"The ongoing challenge of accommodating asylum seekers has no easy solution, yet the UK Government has a statutory duty to find one. Mr Justice Holgate noted that the Home Office is facing an unprecedented number of asylum seekers who have to be accommodated as a matter of law and there is no alternative accommodation readily available. This continues to be a matter between central and local government.
"Our client is grateful to the court for its very prompt resolution of the issue, and for ensuring that those who are merely responding to this extraordinary national challenge are not stopped by the use of draconian measures such as without notice injunctions."
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