The three appeal court judges announced their ruling in a written document published eight days after a hearing at Argentina’s National Criminal and Correctional Court in Buenos Aires.
Roger Nores and two staff members at the hotel in Buenos Aires when the One Direction star fell to his death in October had been charged with manslaughter.
The pair accused of selling Liam cocaine before his fall from the CasaSur Palermo Hotel will remain in prison after being told they still face prosecution and probable trial.
Nores' lawyer Rafael Cuneo Libarona, the brother of Argentina’s Justice Minister, had fought to get the US businessman off his manslaughter rap.
Mr Cuneo Libarona said after news of the appeal ruling emerged: “We are happy to have reversed the decision by 360 degrees.
