The case was brought by Campaign Against Arms Trade (CAAT), which says UK fighter jets and bombs sent to the Gulf state have been used in the conflict in Yemen.
The group attacked the refusal of the Secretary of State for International Trade to suspend export licences for the sale or transfer of arms and military equipment and its decision to continue granting new licences.
CAAT says more than 10,000 people have been killed since 2015 as a Saudi Arabia-led coalition intervenes in the Yemeni civil war and the Government is guilty of “repeated and serious breaches” of international humanitarian law.
But Lord Justice Burnett and Mr Justice Haddon-Cave, sitting in London, dismissed the campaigners’ application for judicial review, saying the decision to carry on the arms trade was not irrational or unlawful.
The judges agreed that secret evidence, referred to as “closed material”, seen by them but not made public for national security reasons, “provides valuable additional support for the conclusion that the decisions taken by the Secretary of State not to suspend or cancel arms sales to Saudi Arabia were rational”.