The suspects -- seven Portuguese businessmen and three Germans, including two former managers of German industrial group MAN Ferrostaal -- denied forging invoices linked to the submarines deal.
Judges at the court in Lisbon said in a ruling today that prosecutors did not provide enough evidence to show that the invoices were false.
The state prosecution service said it would appeal the verdict.
Ferrostaal was sentenced in 2011 in Germany to pay a USD 190 million fine for links to corruption cases related to sales of submarines in Portugal and Greece.
The submarine deal with Portugal was overseen by the country's current Deputy Prime Minister Paulo Portas.
At the time of the deal he was defence minister in the government of Jose Manuel Barroso, who is now president of the European Commission.