The United States is not a safe country for refugees, the Federal Court said Thursday as it ruled that Canada will no longer have the right to turn back asylum seekers at the border.

In the surprise judgment, the court found that Safe Third Country Agreement breaches the rights of asylum seekers under the United Nation Refugee Convention or the Convention Against Torture.

The three-year-old agreement denies refugees who have landed first in the U.S. the right to later seek protection in Canada, and vice versa. It has allowed Canada to automatically send refugee claimants at the border back to the United States. There, they are usually either detained or deported.

Activists have long complained that the agreement is unfair and unconstitutional because it requires refugee claims in Canada and the U.S. to be processed in the country where asylum seekers first land.

The court agreed that the agreement discriminates against refugees based on their method of arrival in Canada.

Citing the example of Maher Arar, Justice Michael Phelan also noted that the U.S. has not been compliant with the Refugee Convention or CAT (Convention Against Torture).

"... The United States' policies and practices do not meet the conditions set down for authorizing Canada to enter into a STCA," Phelan wrote in his 126-page decision.

"The U.S. does not meet the Refugee Convention requirements nor the [UN] Convention Against Torture prohibition (the Maher Arar case being one example). Further, the STCA does not comply with the relevant provisions of the Charter."

Arar was the Canadian who was stopped by U.S. officials in 2002 at a New York airport and sent to the Middle East to be interrogated as an alleged al Qaeda suspect.

Thursday's Federal Court ruling will essentially nullify the Safe Third Country Agreement, with a final court order expected early next year.

It is also likely to result in Canada having to process thousands more refugee claimants each year.

But for now, the STCA remains in effect, says a spokesperson with Citizenship and Immigration Canada.

The court has given both parties until Jan. 14 to make and respond to submissions for an appeal.