Activists have vowed to continue with protests against the Standard Gauge Railway being built inside the Nairobi National Park.
The group, after their case seeking to stop the project was dismissed on Tuesday, say the development threatens wildlife and Kenyans.
A court said that it cannot stop construction of a 6-km railway bridge, which the China Road and Bridge Corporation started building last month.
It is planned to pass through the capital's sprawling sanctuary for lions, giraffes and zebras.
"We have found that we have no jurisdiction on the matter," Mohammed Balala the National Environment Tribunal (NET), ruled on Tuesday.
"A similar case is pending in the High Court."
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Kenya's game parks draw tourists from across the globe but its wildlife are facing increased pressure to share their space with infrastructure projects and people seeking more land to farm and live on.
Campaigners said that the Chinese company was defying a June order by NET to halt construction in Kenya's oldest park.
This is the second phase of a $13.8 billion (Sh1.3 trillion) project linking the Indian Ocean port of Mombasa to Nairobi and Uganda.
But NET said on Tuesday that the order was no longer valid as the Chinese company had since lodged a case in the High Court, which is a superior court.
Human settlements and activity have long encroached on the park, which was established in 1946 on the city limits.
Activists who demonstrated in Nairobi last week said they will return to the streets and may appeal to the High Court.
"We intend to do another demo next week when the Chinese Premier will be visiting," said Reinhard Bonke, a spokesman for Friends of Nairobi National Park, a conservation group which was party to the petition.
The railway has divided opinion.
The government has said that it is better to route the line through park rather than build in populated areas, which would require land seizures.
Activists said the raised railway through the park will affect animals' routes and breeding grounds.
But Paul Gathitu, a spokesman for the government's Kenya Wildlife Service, said human encroachment was more of a concern to animals than the railway line, which will be at least eight meters off the ground and painted to blend with nature.
"There's a lot of land use changes with people encroaching on their routes," he said.
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