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Justice M Nagaprasanna gave the direction on Wednesday following an appeal filed by Sail and several other co-accused, who had challenged the verdict of a special court for public representatives.
The special court had previously found Sail and others guilty in multiple cases related to the illegal export of iron ore from the Belekeri port.
The court had handed prison sentences and imposed fines on the accused for their involvement.
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The sentence will remain suspended provided this condition is fulfilled.
The original conviction, delivered on October 25, implicated Sail and Mallikarjun Shipping Company, which he owns.
The case is part of a broader investigation into illegal iron ore exports from Karnataka’s Belekeri port between 2008 and 2013.
Sail, who represents the Karwar constituency, was charged due to his company’s role in facilitating these shipments.
The case originated from a 2010 probe by the Karnataka Lokayukta, which discovered about eight lakh tons of illegally transported iron ore from Bellary to Belekeri port.
The shipments were found to be lacking essential permits, prompting further investigation by the Central Bureau of Investigation (CBI).
In 2012, the Supreme Court directed the CBI to examine the illicit extraction of iron ore from Karnataka’s forest areas, focusing on activities between January 2009 and May 2010.