Mr Justice Peter Kelly, the head of of the Commercial Division, ruled that ComReg, the Irish Communications Regulator was right to withdraw the 3G licence from Smart.

The company was awarded a third generation phone licence late last year but the regulator withdrew the offer of the licence in February because of problems regarding a €100m bond to be paid by Smart.  3G technology allows internet access over mobiles.

Also today, shareholders in Smart Telecom approved a takeover of the company by businessman Brendan Murtagh, who founded building materials group Kingspan. He bought the company for €1 and has assumed debts of €40m.

Acting chief executive at Smart Telecom, Ciaran Casey, apologised to shareholders at today's EGM for any loss of service that they have experienced in recent weeks.

Speaking at the EGM this afternoon, Casey said that the company's board and management take full responsibility for the company's current situation.

Casey said that with the benefit of hindsight, the company has realised that it tried to do much too quickly by seeking to gain footholds in all areas of the market rather than concentrating on one core area.

He said that the company's rapid growth came at a "heavy price" as it was "burning cash at an unsustainable rate."

Casey said that Smart has challenging times ahead and that it was too early to say what long term damage has been sustained to Smart's brand reputation.