"We believe he [the judge] committed a grave abuse of discretion when he denied our motion because he applied the wrong provision."
Justiniano said Smith's conviction appeal was normal court procedure and that "he should remain with the US government pending completion of all judicial proceedings".
The Philippine government had agreed with the US embassy that under a pact between the two countries, Smith should remain in US custody while he appeals against last week's guilty verdict.
The US embassy said Pozon’s decision "reflects a misunderstanding of the nature of Philippine obligations" under the Visiting Forces Agreement (VFA).
It said Smith is not a private citizen but a member of the US military on an official mission in the Philippines, "and therefore the handling of his case is subject to the terms of the VFA'.
But Pozon said the provision of the bilateral military pact no longer applied to Smith and ordered Smith to remain in Philippine custody.
The judge said it was Raul Gonzales, the Philippine justice secretary, and Jovencito Zuno, the chief state prosecutor, who violated the treaty when they made an agreement with the US ambassador to return Smith to her custody.
"Neither Gonzalez nor Zuno is the appropriate Philippine authority who can legally enter into such an agreement," Pozon said.
He added that the treaty also stated any US soldier convicted of a crime within the country should be confined to a Philippine-run facility.