A US appeals court has ruled against an attempt by Kuwaiti logistics firm Agility to avert prosecution over charges it defrauded the US Army in multibillion-dollar contracts.

Agility was the largest supplier to the US Army in the Middle East during the war in Iraq. It is accused of overcharging the Army over 41 months on supply contracts the government says totaled $9.8 billion, and the case that has been politically sensitive in Kuwait and Washington.

US Assistant Attorney General Tony West told a US Senate committee earlier this year Agility was accused of war profiteering.

The ruling signed on July 12 by the US Court of Appeals for the 11th Circuit in Atlanta should allow the fraud case to proceed after more than a year of legal argument over whether the company was correctly served with an indictment by U.S. prosecutors in 2009.

There was no immediate comment from Agility.

The company had asked the Atlanta appeals court to review a district court's decision in March to deny its motion to quash 'service of process' of the indictment.

Agility had argued the lawsuit was invalid because prosecutors served the indictment only on the company's US subsidiary and not on the Kuwait-based parent company, Public Warehousing Company a.k.a. Agility.

The appeals court dismissed this on procedural grounds.

'We lack jurisdiction over this appeal and appellee's (government's) motion to dismiss the appeal is granted,' said the court order signed July 12.

In the past, Agility has argued that the case involves a civil contract dispute rather than a criminal matter. The government filed a civil suit in January.  -Reuters