Presidential candidate Khaled Ali, a prominent Egyptian democracy activist, was among those who challenged the 100-member constitutional panel. The challenge claims that it was illegal for members of Parliament to appoint themselves to the panel tasked with drafting a new constitution.
The panel consists of 50 MPs and 50 others chosen from outside the Islamist-dominated legislative assembly.
The High Administrative Court in Cairo announced it ruled in their favor and the case could land before the country's constitutional court, Egyptian news service al-Ahram reports.
The member list for the constitutional assembly includes 50 members from the Muslim Brotherhood's Freedom and Justice Party and Islamist party al-Nour.
The court decision comes as Egypt gets ready for its first presidential elections since an uprising last year forced long-time President Hosni Mubarak from power.
Presidential candidates include former and current Muslim Brotherhood members, democratic activist Ali and former Arab League Secretary-General Amr Moussa, among others.