The Dutch state is liable for the deaths of three Bosnian Muslims who were expelled from a UN compound at Srebrenica in 1995, the supreme court ruled Friday.
"The (appeals) court decision is upheld," Judge Floris Bakels said as relatives of the victims broke down in tears and hugged each other and their lawyers.
The final ruling in the long-running case means that former UN interpreter Hasan Nuhanovic, whose father, mother and brother were killed by Bosnian Serb forces after Dutch peacekeepers expelled them from the UN base, can seek compensation from the Dutch state.
The ruling also applies to relatives of another worker on the base, electrician Rizo Mustafic, who was also killed after being sent to certain death at the hands of Bosnian Serb forces.
Nuhanovic's mother, Nasiha, was killed although her death was not part of the current case, in which the Dutch state argued that the peacekeeping troops were under UN responsibility.
But, said Judge Bakels, clearing the Dutch state of responsibility would mean that "justice would have almost no way to judge armed interventions."
"That would be unacceptable," he said.
The three men at the centre of the case were among almost 8,000 Muslim men and boys slaughtered by troops commanded by Bosnian Serb general Ratko Mladic, who brushed aside lightly armed Dutch peacekeepers and overran the supposedly safe enclave in July 1995, during Bosnia's brutal three-year civil war.
Friday's hearing was the culmination of a case spanning a decade, lodged in 2003 by Nuhanovic and Mustafic's relatives, who claim the three men -- who all worked on the Dutch battalion (Dutchbat) base -- could have been saved in what became Europe's worst massacre since World War II.
Rizo Mustafic's daughter, Alma, who lived through Srebrenica as a 14-year-old, told the court in January about the close relationship her father had with the Dutchbat soldiers stationed at Potocari.
"They regularly visited us at home. They even once celebrated Christmas at our house, despite the fact that we had almost nothing to eat and that we don't celebrate Christmas," she said.
But their short-lived relief turned into terror as they realised they were being escorted out of the base by armed Dutchbat soldiers, she added.
"I cannot describe the fear I felt as we walked out," she said.
A Dutch appeals court in 2011 found the Dutch state responsible for the trio's deaths, the first time it was held accountable for the Dutch UN battalion's actions.
But the Dutch state then appealed, saying it believed the UN controlled Dutchbat soldiers in Bosnia.
Mladic, dubbed the "Butcher of Bosnia", and former Bosnian Serb political chief Radovan Karadzic are currently facing charges of genocide, war crimes and crimes against humanity before the Yugoslav war crimes court in The Hague.
Widows of victims at Srebrenica filed a lawsuit in October last year against the UN and the Dutch state before the European Court of Human Rights (ECHR), accusing them of negligence by failing to protect victims.
The Mothers of Srebrenica took their case to the ECHR after attempts in the Netherlands failed.