They ruled that Momcilo Perisic, chief of the general staff of the Yugoslav army, had provided military support to the ethnic Serb Army of Republika Srpska (VRS) forces in Bosnia, but that he had not ordered them to commit war crimes.
"The VRS undertook, inter alia, lawful combat activities and was not a purely criminal organisation," said Theodor Meron, president of the appeals chamber at the tribunal in The Hague.
"While Mr Perisic may have known of VRS crimes, the Yugoslav Army aid he facilitated was directed towards the VRS's general war effort rather than VRS crimes."
Rebel Serbs fought to carve out an ethnically Serb state in Bosnia between 1992 and 1995 after its Muslims and Croats voted for independence from Serbian-led federal Yugoslavia.
Serb forces committed some of the gravest crimes in post-war European history during Yugoslavia's break-up, including the massacre of 8,000 Muslim men and boys in Srebrenica, and the siege of Sarajevo in which more than 10,000 civilians died.
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