The case involved a reluctant witness at the Air India bombing trial in Vancouver.
Two Canadian men are accused of planting a bomb on an Air India jet in 1985, killing 329.
Prosecutors in the case are using the new terror laws to force a witness to give evidence.
'Unconstitutional' law
A High Court ruling comes as the defence for one of the accused begins at the bombing trial in Vancouver.
The trial of two men accused in the Air India bombing is now into its second year in the Vancouver courtroom and the defence case for one of the accused began on Wednesday.
At the same time in the national capital, Canada's Supreme Court was handing a victory to the prosecution.
Using recently revised anti-terror laws, investigators have been trying to force a reluctant witness to give evidence in the Air India case.
The witness has so far refused, arguing the new laws violate Canada's Charter of Rights.
But in a six to three decision, the Supreme Court has now ruled the law is fair and that witnesses can be forced to help police investigations.
However, they also said this witness should testify in open court.
Prosecutors had wanted the whole process kept secret and went to some lengths last year to bar journalists from the proceedings.
By coincidence, Wednesday's ruling came on the 19th anniversary of the crash of Air India flight 182.
Testimony in the bombing trial is expected to last for another two months at least.