The district court ruled that the U.N. war crimes tribunal, established by a U.N. Security Council resolution in May 1993, had the authority under Dutch and international law to detain and try the former Yugoslav leader for crimes against humanity.
On the other hand, "the Dutch court is incompetent to rule" on Milosevic's demand for release, the judge said. It was up to the tribunal to decide whether the former president's arguments were justified.
"The tribunal can be considered to be an independent and impartial court," said the ruling, issued after a week of deliberation over arguments presented in his courtroom by Milosevic's legal team and lawyers for the Dutch state.
The decision by district court judge Roel Paris cited earlier rulings on the tribunal's legitimacy by the European Court of Human Rights last year and by the tribunal's own appellate court after one of its first convictions six years ago.
Milosevic's lawyers last week launched their challenge to the jurisdiction of the International Criminal Tribunal for former Yugoslavia in a district court in The Hague.
They said the 60-year-old former Serb leader had been "kidnapped" and should be set free at once. Counsel for the Dutch state had defended the legitimacy of the court and said the international court was both fair and neutral.
"National and international law recognizes that within Dutch law the tribunal has the exclusive authority to decide to detain suspects...and that this is not the Netherlands' affair," Judge Roel Paris said in his written judgment.
"The plaintiffs claimed that the tribunal was not independent and impartial...but the European Court of Human Rights already ruled that the court provides all protection of the rights of suspects, including impartiality and independence."
Milosevic's lawyers said they would appeal the ruling in a higher Dutch court and go to the European Court of Human Rights to try to secure his release if necessary.
"We are going to an appeals court. This challenge was the first step," said Milosevic's Dutch lawyer Erik Hummels.
Milosevic was not present at Friday's session, but remained in the U.N. detention unit in the nearby town of Scheveningen, and was represented by international lawyers volunteering their services.
The decision came one day after Milosevic's latest confrontation at the war crimes tribunal, his second face-off with the tough presiding judge, Richard May of Britain, since he was transferred to The Hague on June 28.
Milosevic complained about his detention conditions and denounced the tribunal as a "political tool." May ordered him not to make speeches and finally silenced him by switching off his microphone and adjourning the hearing.
The ousted Yugoslav leader said he faced discrimination because he was kept "isolated" and wanot permitted to have unmonitored meetings with his family or legal advisers. May said the court would consider his complaints, but that Milosevic had to follow prison rules like everyone else.
"I am discriminated against all the time, from the first day I got in," Milosevic said in English. "Why you need monitoring of my talks with my grandson, who is 2½ years old?"
Milosevic faces four counts of war crimes for the murder and persecution of ethnic Albanians in Kosovo in 1999. Chief Prosecutor Carla Del Ponte said Thursday that she is preparing two more indictments against Milosevic for crimes in Bosnia and Croatia.
Among the charges will be genocide, the most serious crime in the statute of the tribunal.
The tribunal broke new ground this month with its first conviction for genocide, jailing former Bosnian Serb General Radislav Krstic for 46 years for the 1995 Srebrenica massacre.
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