Members of the Orange Order have been banned from marching down the Garvaghy Road in Portadown after a High Court judge granted a temporary injunction.
Residents of the largely nationalist area launched an appeal against the Parades Commission ruling permitting the Orange Order to walk down the street on Sunday for the first time in 30 years.
On Saturday Justice Patricia Smyth blocked the commission decision, saying the “long-running dispute has the potential to escalate” across Northern Ireland.
The stand-off at Drumcree made headlines in the 1990s, with nationalist residents of the Garvaghy Road opposed to the parade passing through the area, leading to violent clashes for several summers and political tension necessitating a major security operation.
The Orange Order has unsuccessfully applied for more than a quarter of a century to complete its 1998 walk along its traditional route.
On Friday the commission reversed its long-running determination, to the welcome of unionist parties and outrage of nationalist and republican parties.
Delivering her ruling on Saturday Ms Smyth said: “The level of mistrust between the residents and the Portadown Orange lodge cannot be overstated.
“Neither side accepts any reassurance provided by the other or that there’s any genuine reason for the stance adopted by the other.”
She added: “It’s also clear to me that this particular long-running dispute has the potential to escalate within Northern Ireland.
“Against that background I am thoroughly of the view that the issues of all three parties must be properly ventilated so that whenever a ultimate decision is made by this court the parties know they were heard.”