A New Zealand refugee accused of helping hundreds of asylum seekers board a boat that later sank, killing 353 people, has lost an extradition appeal.

Australia is one step closer to extraditing a New Zealand-based refugee to face people-smuggling charges over the deaths of 353 asylum seekers, who drowned at sea.

The New Zealand Court of Appeal on Thursday issued a warrant for the arrest of Iraqi-born Maythem Kamil Radhi and referred his extradition case to the District Court to decide his fate.

Radhi was one of three alleged organisers behind Siev X, a small and overcrowded boat that sank off the coast of Indonesia while bound for Australia in October 2001.

Radhi, who was granted UN refugee status before the sinking, has lived in New Zealand since 2009.

In 2011, the Brisbane Magistrates Court issued an arrest warrant for him over his alleged involvement in people-smuggling.

Radhi is accused of being in charge of passenger fares for those on board Siev X and helping them board the doomed vessel.

In March 2012, a District Court judge in New Zealand ruled he could be arrested by police to face charges in Australia.

But that decision was overturned by Justice Edwin Wylie in the High Court in February last year following an appeal by Radhi.

This led to an appeal by police, which the Court of Appeal has granted.

Justices Ellen France, John Wild and Douglas White disagreed with the High Court’s interpretation of the relevant legislation.

Justice Wylie had ruled Radhi could not be extradited because if his alleged offence had occurred within New Zealand jurisdiction, it would not have been punishable by more than a year’s imprisonment.

Under the provision of the Extradition Act, an offence must carry a maximum penalty of at least 12 months’ jail for the person to be eligible for extradition.

The Court of Appeal has handed the matter back to the District Court so it can determine if Radhi is eligible for surrender or refer the matter to Justice Minister Judith Collins.