The business sector is worried the legal controversy surrounding the Crafar farms sale will put off foreign investors.
BusinessNZ chief executive Phil O'Reilly says New Zealand needs all the investment it can get, and the court ruling that set aside the government's decision to sell the 16 farms to China-based Shanghai Pengxin will create great uncertainty.
Justice Forrest Miller on Wednesday ruled the Overseas Investment Office (OIO), which made a recommendation accepted by ministers, had wrongly interpreted parts of the criteria for land sales to foreigners.
The sale to Shanghai Pengxin had been challenged by a New Zealand consortium which was offering $170 million against the Chinese company's reported bid of $210m.
Mr O'Reilly says the ruling "seems to imply that future overseas investors would find it harder to succeed against a local bidder, even if the overseas investor was prepared to offer substantially more".
He says the government might have to consider changing the Overseas Investment Act to ensure there's a commercially neutral set of criteria.
Opposition parties continued on Thursday to blame the ministers who accepted the OIO's recommendation, saying they should have done more than just rubber stamp it.
The government says the OIO has been using the same legal interpretations since 2005 and ministers had no way of knowing a court would have a different opinion.
The OIO now has to reconsider the Shanghai Pengxin bid using the court's interpretation, and says it will have a new recommendation ready within days.
Prime Minister John Key said on Wednesday previous land sales to foreigners could be affected by the court ruling and he was seeking advice on whether a retrospective law change would be needed to protect them.
The OIO said on Thursday previous land purchases wouldn't be affected.
NZN