A local news agency quoted the appeals court as saying that the apprehension of the 50-year-old Brankovic was in violation of his human rights.
The court cited the international convention on diplomatic relations which guarantees immunity to all members of foreign delegations, regardless of their status.
A party that enjoys immunity cannot be either arrested or extradited, According to the convention he or she "shall enjoy immunity from the criminal jurisdiction of the receiving State. He shall also enjoy immunity from its civil and administrative jurisdiction", which means also that cooperation with another country in that sense is ruled out, the court said in its ruling.
Cedomir Brankovic, 50, was arrested on 25 April, the day when he arrived in Sofia, on an international warrant issued by Interpol's office in Zagreb at the request of the County Court in Sisak, which had investigated Brankovic and another 31 suspects. Given that all were at large, the investigation was called off and an international arrest warrant was issued in November 1999.
Bulgarian authorities notified the Croatian Interior Ministry on 26 April that Brankovic had been arrested and detained for 72 hours. The Interior Ministry notified the Justice Ministry, which said that Bulgaria would be asked to extradite Brankovic after his identity was confirmed.
Brankovic is suspected of attacking 21 villages in the Novska area on 17 August 1991 with his battalion and 31 other people. Thirteen people were killed in the attack. He is also suspected of pillaging and blowing up several Catholic churches in the area and destroying numerous houses and economic facilities.
The Sofia municipal court released Brankovic on 28 April, explaining that his diplomatic immunity was violated by his arrest. However, local prosecutors appealed the lower court's decision, and the Bulgarian Interior Ministry stated that he would be arrested unless Croatia withdrew the warrant for his arrest.
Since 6 February 2003, Brankovic has been on Interpol's red list of persons wanted for crimes against humanity.
Serbian President Boris Tadic sent a letter to his Bulgarian counterpart Georgi Parvanov on Sunday, asking him to use his authority in finding a just solution to the case of Colonel Cedomir Brankovic.
According to the Bulgarian press, Parvanov answered that the appeals court would adopt a ruling in accordance with principles of international law.