The wounds of Europe’s bloodiest postwar conflict were laid bare yesterday when the United Nations’ highest court rejected claims that Serbia was guilty of genocide in Bosnia.

However, Serbia, the first state to be tried for genocide, had violated its obligation to prevent the 1995 Srebrenica massacre and to punish those who had carried it out, the International Court of Justice (ICJ) ruled.

It had also flouted the genocide convention by failing to arrest Ratko Mladic, the Bosnian Serb military commander, even though he was hiding in the country, Judge Rosalyn Higgins, the court’s president, said. The court demanded immediate steps from Serbia to hand Mladic over to the UN War Crimes tribunal.

However, Bosnian Muslims campaigning outside the court in The Hague expressed their outrage at the ruling, which took more than two hours to read out. But the Serbian legal team hailed it as a possible step towards reconciliation in the Balkans.

In the first case of its kind, Bosnia had asked the ICJ, sometimes referred to as the World Court, to rule on whether the Serbian nation had committed genocide during the war of 1992-95, which left about 100,000 dead.

The binding ruling — by a majority of thirteen judges to two — that Serbia was not guilty of genocide, or of conspiracy to commit genocide, ended Bosnia’s hopes of financial redress from its neighbour. A guilty verdict for Serbia and subsequent demands for compensation could have further isolated the country and set back its fragile reform process.

Bosnia began its genocide claims against Belgrade in 1994 after breaking away from Yugoslavia during a bloody conflict and before about 8,000 Muslim men and boys were rounded up and massacred by the Bosnian Serb Army in Srebrenica.

Reading the landmark ruling, Judge Higgins said: “The acts committed at Srebrenica . . . were committed with the specific intent to destroy in part the group of the Muslims of Bosnia-Herzegovina as such, and accordingly. . . these were acts of genocide committed by Bosnian Serb forces. The court has found that [Serbia] could, and should, have acted to prevent the genocide, but did not.”

But these acts — already ruled as genocidal by the UN war crimes tribunal in The Hague in individual cases — and the failures of Belgrade to intervene did not prove that the Government had plotted genocide, the ruling concluded.

“It has not been established that these massacres were committed under the instructions or the direction of the organs of the respondent state [Serbia] nor that the respondent exercised effective control over the operations.” Rejecting Bosnia’s claim for monetary reparations, it added: “Financial compensation is not the appropriate form of reparation for the breach of the obligation to prevent genocide.”

The situation in Serbia is delicately poised while parties discuss forming a new coalition government after last month’s general election, and digest a UN demand for near-independence for the enclave of Kosovo.

Outside the Peace Palace, which houses the court, demonstrators chanted that it was corrupt. Hedija Krdzic, 34, who lost her husband, father and grandfather at Srebrenica, said: “I am stunned. This is terrible — I saw with my own eyes who started this war and who kept up the aggression. It was the Serbs.”

The Serb legal team said the court had absolved Serbia of “the most difficult accusation in its history”, but added: “We hope that this judgment will be an opportunity for the direct reconciliation of people in the former Yugoslavia.”

Boris Tadic, the Serbian President, said: “It is important that the Serbian Parliament, as soon as possible, passes a declaration condemning the crime in Srebrenica without any doubt.”

He added that Serbia must improve its cooperation with the International Criminal Tribunal for the Former Yugoslavia, which is still seeking six Serbs indicted for war crimes, including Mladic and Radovan Karadzic, the Bosnian Serb wartime leader.

“If Serbia fails to complete that cooperation . . . I believe we will face dramatic political and economic consequences,” he cautioned. Talks on Serbia joining the EU are suspended over the issue.

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