Planning permission for a five-hectare site in the centre of Skelmersdale was granted by West Lancashire Borough Council in June last year.
The consent, granted to St Modwen Developments (Skelmersdale) Limited, was opposed by Skelmersdale Limited Partnership (SLP), which owns the Concourse Centre, also in the town centre.
The consent contained an unusual condition which required that space in the new shopping centre should not be let to retailers that already rent premises measuring more than 250 square metres in the Concourse Centre, or had done so in the 12 months prior to the St Modwen project's completion.
The condition, which is designed to protect the viability and vitality of the Concourse Centre, is to last five years. But it would no longer be applied to a retailer if it "commits" to retaining its presence in the Concourse Centre during that period.
In challenging the permission, SLP argued that the condition was so vague as to be unlawful and ineffective to achieve its intended objective.
Advice relating to the condition given to councillors by a planning officer was said to be neither accurate, nor adequate, SLP argued.
SLP's complaints were, however, rejected by the High Court and now the company has lost again in the Court of Appeal.
Lord Justice Sales said the condition had a definite meaning, and provided effective protection for the Concourse Centre.
The judge ruled that relevant retailers would be required to give legally binding commitments to the council that they would not abandon the Concourse Centre whilst the condition remained in force.
Councillors had also not been materially misled by the officer's advice, ruled the judge, who was sitting with Lord Justice Briggs.