The case in the B.C. Court of Appeal pitted the provincial government, Moulton Contracting Ltd., and several members of the Fort Nelson First Nation against each other.
It followed a lower-court ruling in December 2013, ordering the province to pay the company $1.75 million for failing to issue a warning about an imminent blockade to timber-harvest areas in B.C.'s northeast in 2006.
The government appealed, and Justice Risa Levine says the main issue focused on the timber licence and who is liable for third-party interference.
Levine says the lower-court judge erred in his ruling, noting a clause in the timber licence means the province can't be held liable for the company's losses because of the actions of a third party.
She set aside the order requiring the province to pay the $1.75 million in damages and told the company to pick up various court costs incurred by the province and the First Nation.