Granting the appeals of both the prosecution and the defence, the court quashed the ruling under which 14 suspects were found guilty of war crimes committed against prisoners at the Ovcara farm near the eastern Croatian town of Vukovar, in November 1991.
The Supreme Court said in a statement that the trial verdict contained significant violations of regulations of the criminal procedure.
The trial verdict was passed on 12 December 2005. Fourteen people were found guilty of the murder of 200 prisoners at the farm, while two were acquitted.
The commander of the Vukovar Territorial Defence, Miroljub Vujovic, his deputy Stanko Vujanovic, the commander of the "Leva Supoderica" volunteer unit, Milan Lancuzanin, and members of the Territorial Defence Predrag Milojevic, Predrag Dragovic, Djordje Sosic, Miroslav Djankovic and Ivan Atanasijevic were sentenced to 20 years in prison, the maximum sentence under the Serbian law.
Vujo Zlatar, Milan Vojinovic and Jovica Peric were sentenced to 15 years, Predrag Madzarac to 12, Nada Kalaba to nine and Goran Mugosa to five years in jail.
Marko Ljuboja and Slobodan Katic were acquitted.
The convicts will remain in custody until a new ruling is delivered, the Supreme Court said in the statement.