Justice Haruna Tsammani, who delivered the judgment, said the sacked local government chairmen failed to show verifiable facts of the plan by the Oyo State governor to dissolve the councils.
Tsammani said the case initiated was based on mere speculations and conjectures.
Bashorun Bosun Ajuwon had instituted the case on behalf of the Oyo State chapter of the Association of Local Government of Nigeria (ALGON).
The Governor Seyi Makinde-led government and the embattled council bosses had been at loggerheads over the control of the local governments and local council development areas.
The judgment elicited jubilation, as the Court of Appeal premises, which was filled by supporters of the state chapter of the Peoples Democratic Party (PDP), erupted in songs of victory.
The court, after considering the evidence and submissions of both legal teams, upheld the validity of the decision of the Oyo State Government to dissolve the sacked ALGON.
But the sacked council bosses have rejected the Appeal Court judgment, vowing to take the matter to the Supreme Court.
The chairmen, under the aegis of ALGON, spoke through its Chairman, Prince Ayodeji Abass-Aleshinloye, in a statement.
He said the judgment had shown that the course of justice was not served, adding that the association would proceed to the Supreme Court for proper redress and judicial interpretation.
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