Western Force have lost an appeal to remain in the Super Rugby competition.
Rugby Western Australia had challenged an arbitrator's decision to back the Australian Rugby Union's move to drop the Force for the 2018 season.
In the New South Wales Supreme today, Justice David Hammerschlag dismissed the appeal.
Rugby WA argued the ARU had broken a commercial contract giving the Force a place in Super Rugby until the end of the 2020 broadcast deal.
The Supreme Court challenge had the financial backing of mining magnate Andrew Forrest, who had offered the ARU $50 million to keep the Western Force afloat.
"We are disappointed to announce that RugbyWA has been unsuccessful in appealing the arbitration decision in the Supreme Court of New South Wales allowing the Australian Rugby Union (ARU) to terminate the Alliance Agreement," Rugby WA said in a statement on Tuesday.
"This now means the ARU have the ability to remove the Western Force from the Super Rugby competition.
"Based on previous correspondence we are expecting the ARU to confirm the termination of the Western Force's participation in the Super Rugby competition."
The ARU announced they would axe the Force last month as part of a commitment to joint venture partners in SANZAAR, the governing body of Super Rugby, which decided to cut three teams from the struggling competition due to complaints from broadcasters and fans with the 18-team format.
South Africa already agreed to cut two teams, which are now playing for the Pro14 league in Europe.
Force have no such recourse to play in a different competition and backed by billionaire mining tycoon Andrew Forrest, vowed to fight for their survival.
"It is to be remembered that ARU owns the Force," Justice David Hammerschlag said in his case notes.
"If the alliance comes to an end, it owns the Force unconditionally without any potential obligation to sell it back in the future, and can do with it what it likes, even destroy it."
The decision follows the ARU's decision to turn down an "extremely generous" offer of financial support from Forrest to keep the team alive.
The ARU said it had already committed to SANZAAR's decision and said it was too late in the process to accept the billionaire's support.