ALBANY – The state’s highest court, dealing a victory to Mayor Bloomberg, yesterday ruled an anti-discrimination law passed by the City Council over the mayor’s objections was invalid.

The Equal Benefits Law, enacted by the council over the mayor’s veto in June 2004, had required the city to do business only with contractors and property owners that agree to provide the same benefits for the domestic partners of employees as they do for the spouses of employees.

Mr. Bloomberg had initially refused to enforce the law but was ordered to do so after the council sued in Supreme Court. The council argued that the mayor’s refusal to carry out the law had upset the separation of powers.

An appeals court overturned that ruling, saying the city statute conflicted with competitive bidding requirements in state law and was invalid.

In a 4-3 decision, the Court of Appeals upheld the mid-level appeals court, saying state and federal laws took precedence over the city law. Writing for the majority, Judge Robert Smith dismissed the City Council’s arguments over the separation of powers. While noting Mr. Bloomberg’s duty to carry out enacted city laws, Judge Smith noted the mayor also had the duty to follow existing state and federal statutes.

“Today’s decision is significant because it affirms that local laws, however desirable their aim, must comply with state and federal law,” the First Assistant Corporation Counsel of the city’s Law Department, Jeffrey Friedlander, said.

In his dissent, Judge Albert Rosenblatt said that an official who believes that a law is unconstitutional has to let the courts decide and must follow the law while the issue is being argued. Judge Rosenblatt said Mr. Bloomberg had acted with an authority he doesn’t have.

“Our system requires that the judiciary preserve its duty as arbiter of a law’s constitutionality … What happened here upended the process,” Judge Rosenblatt said.

The attorney who represented the council, Steven Holley, said that it wasn’t clear if there were any remaining avenues to appeal the case but that the council was reviewing its options.

“I find it remarkable that the mayor can ignore a law passed over his veto,” Mr. Holley said. “It’s a close call we lost. It’s unfortunate.”

The City Council speaker, Christine Quinn, the first openly gay person elected as speaker of the City Council, vowed to continue pushing for benefits for domestic partners.

“Although we are disappointed with the court’s ruling, we are here today most importantly to make it clear that our efforts to make sure that the equal benefits bill becomes the equal benefits law of the city of New York – those efforts are not over,” she said.

The City of New York currently provides the same benefits to the domestic partners of its employees as it does to employees’ spouses. The mayor’s office said Mr. Bloomberg “has also taken significant steps to provide equal access to benefits for same and opposite-sex domestic partners and spouses of private sector employees.”