SBS stopped encoding its broadcasts earlier this year in dispute over the accuracy of ratings produced by the electronic audience measurement system.

Originally, the court ordered SBS to resume encoding, citing concerns that other dissatisfied minority broadcasters might follow suit. But SBS appealed and this week the court decided that Arbitron had failed to demonstrate in its request for a restraining order that its ratings business would suffer “permanent and irreparable harm” if SBS pulled out.

Judge Shirley Kornreich said that as Arbitron has numerous contracts with clients that expire at different times the loss of SBS would not have a material impact.

“Arbitron’s characterisation of its business as one in which the loss of any one client will cause irreparable harm has not been established and is not plausible,” she said.

Relations between Arbitron and SBS soured in late 2009 when the broadcaster reportedly stopped paying its license fee to Arbitron, citing dissatisfaction with the PPM service. In return, Arbitron stopped providing ratings – which then led SBS to cease encoding its broadcasts.

SBS chief revenue officer Frank Flores (pictured) said: “I am glad that Justice Kornreich considered our argument and ruled in our favour.” He said SBS wanted to reach an “amicable resolution” with Arbitron and has agreed to mediate the dispute before John Feerick, the former dean of Fordham Law School.

Arbitron said: “We respect the court’s decision but are disappointed and believe that the radio industry is best served when all broadcasters in a market are encoding their signal. SBS remains a valued client and we intend to continue to engage with them in an ongoing dialogue in order to achieve resolution.”