Campaign group, Keep Abergavenny Livestock Market (KALM), had a series of complaints about Monmouthshire County Council's decision to grant planning permission in June last year to developer Optimisation Developments.
But today judge Mrs Justice Nicola Davies said the council had taken all conservation, environmental and socio-economic issues properly into account when reaching its decision.
The market covers a 1.9-hectare site, bounded on three sides by the Abergavenny Conservation Area, and KALM argued, among other things, that its demolition would have a serious impact on the local economy and threaten contamination of the River Usk.
However, the judge rejected arguments that the council had been obliged to carry out a full environment assessment before granting consent.
Rejecting KALM's case, the judge said: "It is difficult to avoid the conclusion that this challenge is in reality an attack upon the planning merits of the decision of the council in granting planning permission ... misplaced forensic criticism has been levelled at decisions made when no issue was taken at the time objections were made."
Concluding that there were "no grounds" on which the planning consent could be challenged, she added: "No evidence has been adduced to identify any real risk to the River Usk as a result of the proposed remedial measures."
The council is planning to replace the market with a new facility near Raglan and the court heard it has committed itself to maintaining a livestock market within the county boundaries for at least 50 years.