The Tokyo High Court on Wednesday rejected an appeal by Tokyo's Suginami Ward of a lower court ruling ordering the ward to compensate three members of Aum Shinrikyo for rejecting their applications for residency registration.
In handing down the ruling, presiding Judge Nobuo Akatsuka said, "It is a violation for the ward not to accept application for residency registration without a legal basis."
An earlier ruling by the Tokyo District Court ordered the ward to pay the three members 300,000 yen each in damages.
Some local administrations have refused to allow members of the cult, blamed for the 1995 sarin gas attack on the Tokyo subway system and other crimes, to register as residents.
In a similar move, the Nagoya District Court recently ordered that city's government to pay seven Aum members 30,000 yen each to compensate them for a Ward office's rejection of their applications for residential status.
Many senior members of the cult have been found guilty of planning and executing the sarin attack, which killed 12 people and made thousands of others ill.
Group founder Shoko Asahara is standing trial for his role in the attack and other crimes.
The cult now calls itself Aleph.