A Libyan military court on Wednesday declared itself incompetent in the first trial of alleged loyalists of the toppled regime of Moamer Kadhafi.
"We decided the court is incompetent in this matter," said Ali Hamdi, a judge in the court in the eastern city of Benghazi.
A defence lawyer welcomed the decision.
"This proves that justice is doing well and on the right track," the lawyer, Hussein Gheniwa, told AFP.
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From the start of the trial on February 5, the defence team had argued against holding a military trial when the majority of those accused were civilians.
There were 43 accused present at the hearing, an AFP reporter said.
Most faced charges of "supporting the former regime against the Libyan revolution" in attempts to crush the revolt, "intending to commit criminal acts" and "aiding prisoners to escape."
The accused were rounded up in July last year in Benghazi, cradle of the popular uprising, during a raid by former rebels against a cell of Kadhafi backers.
The ruling National Transitional Council said at the time that several escaped prisoners of war were hiding within the armed group in a Benghazi licence-plate factory.
Rebels had seized TNT explosives and several pickup trucks equipped with machineguns, according to the same sources. The cell was blamed for a prison break and accused of planning to plant car bombs in Benghazi.