Australia's High Court has stopped the authorities from deporting a boat-load of asylum seekers to Malaysia.
Lawyers for the group of refugees argued that their transfer to Malaysia would be illegal.
Judges ruled there was a "sufficiently serious question", and ordered a halt to such transfers until a full hearing can be held later this month.
The ruling could jeopardise Australia's deal to send 800 asylum seekers to Malaysia over the next four years.
Under the deal, Australia would take 4,000 refugees who have already been processed in Malaysia.
But critics say refugees are often mistreated in Malaysia, which has not signed several human rights treaties.
The group of asylum seekers was the first to be targeted under the deal.
They were picked up in Australian waters and taken to Christmas Island, which hosts a controversial facility where hundreds of asylum seekers are kept in detention while their claims are processed.
A human rights lawyer representing the 42 asylum seekers argued that sending the group to Malaysia would be illegal.
The lawyer, David Manne, told Australian radio ahead of the hearing that Malaysia had a "troubling record when it comes to treatment of refugees".
High Court Justice Kenneth Hayne ruled there was a "sufficiently serious question" for the case to have a full hearing, ordering a temporary injunction on the transfers.
Both Canberra and Kuala Lumpur have insisted their agreement provided the necessary safeguards.
Australian Prime Minister Julia Gillard has said the agreement will "smash the business model of people smugglers".
But the Australian Human Rights Commission, a watchdog body, has expressed concern - particularly over the welfare of young asylum seekers.
"It is very difficult to see how he [Immigration Minister Chris Bowen] can be satisfied that it is in the best interest of an unaccompanied child to send that child to Malaysia, a country that is not a signatory to the refugees convention," its head, Catherine Branson, said last month.
Australia currently has more than 6,000 asylum seekers in detention originating from countries including Iran, Iraq, Vietnam, Sri Lanka and Afghanistan.
The UN has previously criticised Australia for holding all asylum seekers in detention centres while their applications are assessed.
The migrants are held for months at the Christmas Island centre, about 1,500 miles (2,400km) from the Australian mainland, and in other facilities.