Campaigners have won a landmark legal challenge at the Court of Appeal over the Government’s decision to continue to allow arms sales to Saudi Arabia.

Campaign Against Arms Trade (Caat) took its legal fight over a decision to continue selling military equipment to the Gulf state, which is leading a coalition of forces in the Yemeni conflict, to the Court of Appeal.

Announcing the court’s decision, Master of the Rolls Sir Terence Etherton, said: “The decision of the court today does not mean that licences to export arms to Saudi Arabia must immediately be suspended.”

He said the government “must reconsider the matter” and estimate any future risks in light of their conclusions about the past, adding that “the process of decision-making by the government was wrong in law in one significant respect”.

He added that the government “made no concluded assessments of whether the Saudi-led coalition had committed violations of international humanitarian law in the past, during the Yemen conflict, and made no attempt to do so”.

The government is seeking permission to appeal the judgement. 

A spokesperson said: “This judgement is not about whether the decisions themselves were right or wrong, but whether the process in reaching those decisions was correct.”

Caat, which says UK fighter jets and bombs sent to the Gulf state are being used in the conflict in violation of international humanitarian law, challenged a High Court ruling given in July 2017.

Two judges found that the Secretary of State for International Trade had not acted unlawfully or irrationally in refusing to block export licences for the multibillion-pound sale and transfer of arms and military equipment.

Secret evidence played a significant part in the case, and the court delivered a closed judgment as well as a public ruling.

At a hearing in April, Caat’s lawyers argued the Government should be forced to reconsider its decision in light of evidence from a number of bodies – including the United Nations and the European Parliament.

Martin Chamberlain QC said one report described the war, which has been ongoing since 2015, as the “world’s worst humanitarian crisis”, with an estimated 24 million people in need of aid.

He told the court a number of investigations have concluded Saudi Arabia has committed “repeated violations of international humanitarian law, some of them serious”, and that air strikes have resulted in “mass civilian” casualties.

Chamberlain argued that the Government’s decision to continue arms sales in the face of such evidence contravened its own policies.

Government lawyers argued that the secretary of state and his advisers took into account every allegation which came to their attention, and said the High Court’s decision should be upheld.

Andrew Smith of Campaign Against Arms Trade said: “We welcome this verdict but it should never have taken a court case brought by campaigners to force the Government to follow its own rules.

“The Saudi Arabian regime is one of the most brutal and repressive in the world, yet, for decades, it has been the largest buyer of UK-made arms.

“No matter what atrocities it has inflicted, the Saudi regime has been able to count on the uncritical political and military support of the UK.

“The bombing has created the worst humanitarian crisis in the world. UK arms companies have profited every step of the way. The arms sales must stop immediately.”

A number of human rights campaign groups intervened in the appeal, which was heard over three days and part-closed to the public.

Since early 2015, Saudi Arabia has led a coalition providing military assistance in Yemen to President Abdrabbuh Mansur Hadi, who is facing mainly Houthi forces loyal to the former president in a country in which terrorist organisations are also operating.

Caat says more than 10,000 people have been killed in Yemen and there is overwhelming evidence that UK arms sent to the Saudis have helped create a humanitarian catastrophe, leaving 80% of the population in need of aid.

The UK has continued to allow sales and Caat says it has licensed more than £4.7 billion of arms – including aircraft, drones and missiles – to Saudi Arabia since the bombing began in March 2015.