Aleh and Powrie were able to get the hearing re-opened today after new video evidence came to light, which suggested a "significant error" may have been made in the original ruling. The footage came from a rival coach's boat.
Team Jolly argued the video showed they had not infringed and there was room to cross the Austrian boat without impeding them.
But the jury ruled Aleh and Powrie were still required to keep clear of the Austrians under the principles of rule 10.
Rule 10 is the most basic rule in sailing, and states the boat on port tack must keep clear of the boat on starboard tack.
The disqualification has proved costly for Aleh and Powrie. While the crews are able to discard their worst result, it put them under huge pressure not to have any further slip-ups.
They bounced back with an impressive showing on day two to take the overall lead, but a 12th place finish in Saturday's only race saw Team Jolly drop back down to sixth overall.
Had their original sixth place finish in race one stood, Aleh and Powrie would be joint leaders with the Great British team and Saskia Clark and Hannah Mills at the half-way point in the regatta.
The Kiwi and British crews have a long rivalry, with Aleh and Powrie pipping the Brits for gold at the London Olympic four years ago.
But with just six points separating the top six crews, Team Jolly are still well in medal contention as they seek to become the first New Zealand sailors to win back-to-back Olympic gold.