The Federal Court has struck down the NSW Fractured Rock Water Resource Plan, part of the Murray–Darling Basin system, after a First Nations challenge.

Justice Angus Stewart delivered the ruling in Sydney on Friday, declaring the 2022 accreditation invalid and ordering it be reconsidered after the Murray Lower Darling Rivers Indigenous Nations (MLDRIN) argued consultation requirements under the Water Act were not met.

MLDRIN, a confederation of more than 20 Nations, launched the case in October 2023, claiming the plan was accredited without proper consultation with Traditional Owners.

The plan, signed off in November 2022 by then environment and water minister Tanya Plibersek, was the first from NSW to be approved under the Murray–Darling Basin Plan.

It sets the rules for how groundwater in fractured rock aquifers is managed, water stored in cracks and fissures of rock formations that is vital for communities, ecosystems, and cultural practice.

At the time, MLDRIN said some nations, including the Tati Tati, were excluded from consultation, while others were given little say.

The group argued this sidelined First Nations' water management objectives and described the process as a "tick-and-flick" exercise which disregarded First Nations' responsibilities for caring for water Country.

During the trial, the court heard the federal Department of Climate Change, Energy, the Environment and Water could not confirm the minister had read the plan before approving it.

The judgment establishes a precedent on the level of consultation required with First Nations in Murray–Darling Basin water planning.

The outcome could influence future plans in NSW and beyond, as well as the upcoming 2026 review of the Basin Plan and 2027 review of the Water Act.

The ruling also comes a day after the Senate voted down the reinstatement of a dedicated estimates hearing on Indigenous affairs, which included cross-portfolio scrutiny of Murray–Darling Basin matters.

The move was criticised by the opposition as limiting accountability on issues such as water management.