The U.S. Court of Appeals for the Third Circuit ruled Tuesday that Wilmington Trust Co. was under no contractual obligation to prevent abuses that led a European commercial bank to lose a $168 million investment in 15 residential mortgage-backed securities trusts.

The ruling, from a three-judge panel of the Philadelphia-based appeals court, rejected IKB International S.A.’s bid to revive the breach-of-contract suit, which accused Wilmington Trust of standing “idly by” while other participants in the trusts drained them of their value.