auDA alleged a "serious" breach of its domain registrar agreement with Bottle, referring to security breaches in April 2007 and February 2009.
Bottle took the matter to court, and on Thursday gained an injunction requiring its reinstatement until the case could be heard in detail.
auDA appealed that ruling, but on Friday the Supreme Court granted an interim order for Bottle's reinstatement.
In separate statements, auDA said it "intends to vigorously defend its decision to terminate Bottle Domains' accreditation", while Bottle said "Bottle Domains strongly appose auDA's action and will continue to defend their claims against us through the Supreme Court."
The parties will return to court on Wednesday April 22.
Other industry players are weighing into the dispute - see page 2.
Larry Bloch, CEO of domain registrar Netregistry (who served as an auDA director in 1999 and from 2003 to 2005) warned of "instability and chaos" as a result of the actions.
"This was always going to end up in the courts and Disspain was naÃ¯ve to think Bottle Domains would allow its accreditation to be taken away without a fight. auDA should have ensured that its actions were proportionate and minimised negative impacts to domain name holders," Bloch added.
"auDA should have maintained Bottle Domains' accreditation whilst the matter was resolved between them."
At this stage, the dispute between auDA and Bottle is at the 'he said, she said' stage, and until the parties' positions are tested in court we are in no position to say which of the claims are accurate.
There is some history between Bloch and auDA.
For example, Bloch accused auDA of being "arbitrary" when it cancelled two domains registered by a Netregistry customer in 2006. Disspain said it had asked Netregistry to show how the customer was entitled to those names, and Bloch admitted that Netregistry chose not to respond as a protest.
And there's more - please read on.
The same year, Bloch and Disspain disagreed also over who should be consulted on the 'domain monetisation' issue. Bloch apparently felt that only domain registrants should have a say, while auDA and Disspain took the view that ordinary users were also entitled to contribute to the policy.
These disagreements seem rooted in the two opposing views of the domain name space. One side sees it as a resource to be mined, the other (which includes the original .au administrator) sees it as a public resource that should be conserved.
Successive policy changes have generally favoured the former group - which apparently (and understandably) includes most registrars. For example, .com.au names originally were required to be closely derived from the name of the businesses registering them.
The extension to trademarks and names that are "closely and substantially connected to the registrant" comes close to open slather.
For example, "Raise a Glass" is related to a charitable appeal by the RSL and Legacy. But the phrase has been trademarked by Foster's (a participant in the appeal), and the company has also registered the raiseaglass.com.au domain name.
What would have been wrong with raiseaglass.fosters.com.au, raiseaglass.rsl.org.au or raiseaglass.legacy.com.au as permitted by the old arrangements - apart from the fact that the domain registrars wouldn't have got any additional business?
But back to Bloch's comments on the Bottle Domains case - see page 4.
"The turmoil in domains has caused confusion among domain holders - mostly businesses - as well as those companies reselling Bottle's services," Bloch said.
Bottle Domains is one of the most expensive registrars in Australia ($A99 for a .com.au name), according to whatsinaname.com.au, whereas Netregistry is the sixth cheapest ($44.95).
"We have already received many calls from confused customers asking for help and clarification, and many resellers have already transferred their business to us, unable to wait for the outcome of the court proceedings.
"This leaves auDA exposed to pay significant damages should the de-accreditation be permanently overturned by the courts, as much of the damage to Bottle is irreversible, regardless of the legal outcome.
"What that means for auDA financially - which runs a tightly balanced budget - and how a bankrupt administrator would impact the entire Australian domain industry, is anyone's guess," Bloch said.
One possibility is that the Federal Government would provide auDA with a financial bail out; another is that the industry body would quickly form a new policy and self-regulation body. Assuming that new body gained the Government's endorsement, ICANN would presumably follow suit.