Francis McFarlane, 44, from Alloa, near Stirling, has not worked since the North Sea tragedy which claimed 164 lives in July 1988.
Mrs Justice Smith ruled that Mr McFarlane, who broke down in the witness box, was a 'primary victim' of the 'horrifying calamity' due to his closeness to it.
She held that Occidental Petroleum (Caledonia) - now EE Caledonia, the operator and owner of Piper Alpha, had owed Mr McFarlane, who worked as a painter on the platform, a 'duty of care' and he could therefore bring a claim for damages.
Despite reservations about part of his evidence, she was satisfied that he had told what he believed to be the truth about his fear for his own safety and that he had been 'shocked and horrified' to see the suffering and death of many men, some of whom were his friends or colleagues.
The judge said videos of the tragedy were 'a profoundly disturbing spectacle'.
Mr McFarlane's ordeal, which left him depressed and unable to return to his old work, occurred because he had been berthed on the multi-purpose support vessel Tharos.
The Tharos, also a fire-fighting and rescue craft, went to the aid of Piper Alpha as massive explosions and fireballs erupted over the sea 120 miles north-east of Aberdeen. There was no time for non-essential personnel, including Mr McFarlane, to be evacuated to a safer place.
The vessel approached to within 50 metres (55 yards) of the platform, whose main function was to pump oil and gas ashore from the surrounding underwater fields.
Mr McFarlane wept in court as he described the scene as 'like an atom bomb going off'.
He said: 'I can remember shaking, wanting to be sick, trying to retch. I had no control. My whole body was shaking, wanting to be sick.'
He described seeing men falling and jumping into the sea to escape the fire and a rescue boat being engulfed in flames, killing many of the occupants.
Mrs Justice Smith said the videos showed the 'colossal size and awesome power and intensity' of the conflagration. Smoke was billowing - mercifully away from the Tharos, which could have been engulfed in smoke and flame if the wind had changed.
Later, Alan Levinson, solicitor for Mr McFarlane, said the amount of damages he should receive would now be assessed.
He said: 'The question of liability has been established. Hopefully it is just a mathematical exercise. But if the two sides cannot agree we can ask the judge to assess what he should receive.'
The ruling paves the way for at least 10 similar claims to be brought against EE Caledonia, four of them in English courts and six in Scotland.
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