The trust which runs Bath Recreation Ground has won an appeal allowing Bath Rugby Club to expand its stadium.
The club, which leases the ground from the Charity Commission, wanted to increase capacity and in 2012 secured permission for the expansion.
But in March 2014, the Charity Tribunal overturned the proposal and the case was heard at the Upper Tribunal.
Bath Rugby Club said the ruling was as "an incredibly positive step forward" for its redevelopment plans.
The Upper Tribunal has the equivalent status of the High Court and has the power to overturn decisions by lower tribunals such as the Charity Tribunal.
A spokesman for Bath Rugby Club said: "Bath Rugby is delighted by the outcome of the Recreation Ground Trust's appeal.
"Today's decision opens the door to progress in terms of redevelopment.
"While we recognise there is still a long way to go, today's decision is an incredibly positive step forward for both the Club and the City of Bath."
The Rec holds about 12,000 supporters at present but the club wants to increase capacity to take a further 4,000 people on match days.
The BBC has contacted the trust for a comment and is awaiting a response.
The Charity Tribunal told the BBC it does not comment on cases as the decision speaks for itself.