Pakistan’s Election Commission rejected an application by Hafiz Saeed’s political outfit to contest elections next month, in what will be seen as a test of the nation’s will to curb domestic militant groups operating in its borders.

The Mili Muslim League had its bid to become a legitimate political party quashed on Wednesday despite a high court ruling in March ordering the election agency to register the group, Tabish Qayum, a spokesman for the MML, said.

With relations between Islamabad and Washington at a nadir, the U.S. designated the MML as a terror group and placed sanctions on seven of its leaders in April. Washington said the organization is attempting to undermine Pakistan’s political process and is a front for militant outfit Lashkar-e-Taiba. The MML has repeatedly denied the allegations and said the group is “purely” peaceful.

The MML’s creation, aided by Saeed who inaugurated its offices in Lahore in December, has led to fears Pakistan’s powerful military is renewing its push to lend terror groups political legitimacy. The U.S. says Saeed’s charities and organizations raise money and support for Lashkar-e-Taiba, which he denies. In sermons in Lahore this year, Saeed has denounced Islamabad’s moves to seize his organizations’ assets as an American-led persecution.