German safety standards body TUV had "fulfilled its obligations" in certifying breast implants that were found to be faulty.
The ruling overturns a decision by a lower French court in 2013 which had found TUV liable and ordered it to pay millions of euros in compensation to distributors and victims.
TUV certified that implants made by French firm Poly Implant Prothese (PIP) conformed to safety rules -- even though they were subsequently found to contain substandard, industrial-grade silicone gel.
The agency has maintained it was never its job to check the actual implants, and their task was only to inspect the manufacturing process.
The appeals court in the southern city of Toulon found that TUV and its French subsidiary had "fulfilled the obligations incumbent upon them as a certifying body (and) committed no error engaging their criminal responsibility."
"This decision absolves TUV of any responsibility and confirms that the decision of the Toulon commercial court in 2013 was unfounded," said Cecile Derycke, a lawyer for the body.
The scandal first emerged in 2010 after doctors noticed abnormally high rupture rates in PIP implants and gathered steam worldwide in 2011, with some 300,000 women in 65 countries believed to have received the faulty implants.
Six distributors of the implants from Bulgaria, Brazil, Italy, Syria, Mexico and Romania sued TUV for a total of 28 million euros ($38 million).
Nearly 1,700 women who were fitted with the implants -- most of them from South America but also from France and Britain -- also asked the German firm for 16,000 euros each, taking the total claims against TUV to 53 million euros.
The lower French court ordered the German body to compensate the women 3,000 euros ($3,300) each while waiting for individual medical or financial assessments to be conducted on each plaintiff and TUV paid out a total of 5.8 million euros.
The women "will technically have to pay back this money but no decision has been taken on a request for reimbursement," said a source close to the safety body.
The founder of PIP Jean-Claude Mas was convicted of fraud and sentenced to four years in jail in 2013 over the scandal in which his company used industrial-grade rather than medically approved silicone in its breast implants in order to cut costs and boost profits.
More than 16,000 women have had the implants removed since the scandal came to light, but health officials in various countries estimate they are not toxic and are not thought to increase the risk of breast cancer.