The Kiribati Government has suspended three senior judges after they stopped the deportation of High Court justice and Australian citizen David Lambourne.
The ABC reports this effectively leaves Kiribati without any functioning high-level courts.
The Kiribati Court of Appeal quashed the deportation order for Judge Lambourne and ordered the government to reinstate him. They said the Government's actions were unconstitutional.
The judges - Paul Heath, Peter Blanchard and Rodney Hansen - are all retired senior New Zealand judges.
It also dismissed Kiribati's argument that Lambourne was a security risk, calling it "far-fetched", and directed that he be issued a new visa to allow him to stay in the country.
The ABC said the office of Kiribati President Taneti Maamau responded furiously, saying it was "gravely concerned by the continuing attack on the rule of law by a few judges, who refuse to honour the constitution, laws and customs by issuing autocratic mandates".
"The government of Kiribati will continue to stress that it is vital that judicial integrity underpin judicial independence, so the rule of law does not become a vehicle for autocratic judicial tyranny that robs our good and honest people of their sovereignty," it said.
The Government had previously tried to force Lambourne onto a plane and out of the country.
The dispute has its roots in a longstanding disagreement over tenure, but has stoked broader concerns about the rule of law and independence of the judiciary in Kiribati.