The Central Bureau of Investigation was dealt another blow today when Judge Harichi Doi of the First Court of Eldorado ordered the prosecution to pay Ottavio Quattrocchi's legal fees.

The ruling is significant as under Argentine law, a judge issues such an order only if he believes that the defendant did not have a case to answer, which suggests that Judge Doi was not convinced that the CBI had grounds to file for Quattrocchi's extradition.

It now appears that the prosecution will have their work cut out if they go ahead with their appeal to the Argentine Supreme Court.

Reacting to the decision, Quattrocchi said he was 'satisfied that justice had been done.'

"Indian case was incomplete and Quattrocchi's detention in Argentina was illegal from the outset," the Italian businessman's lawyer Alejandro Freeland said.

"The CBI only brought half the papers relating to the case and neglected to bring the judgments from the New Delhi High Court, which effectively overruled the Interpol notice for arrest issued in 1997," he said.

These arguments and the previous rulings from the CBI's failed extradition attempt in Malaysia were the grounds for Quattrocchi's successful defence, he said.

A written explanation of Judge Doi's verdict will be issued on Wednesday in Eldorado after which the CBI has five days to appeal the decision to the Supreme Court in Buenos Aires.

Miguel Almeyra, the lawyer acting on behalf of the CBI, had indicated that they will be lodging an appeal although no such action has been taken as yet.

Quattrocchi was arrested on the border of Argentina and Brazil [Images] on February 6 on an Interpol Red Corner Alert while on holiday with his wife.