Uppsala District Court, just north of Stockholm, ruled that it had been established that the incident by and large took place as told by the young girl, but freed the man despite a dissenting vote by the chair judge.
According to the girl, she was made to touch the man's genitals when she was lying in bed next to the man – who legal news site Dagens Juridik reported was 35 years old and her mother's boyfriend at the time.
She described, wrote the site, how the man took her hand and put it on his genitals. She said she could see the whites of his eyes, which she said were open.
However, the man told the court that he was asleep at the time and did not remember the incident.
And in a ruling issued last week, which continued to be debated in Sweden on Monday, the court stated it had not been established beyond doubt that the man had not been asleep.
"The prosecutor has therefore not succeeded in proving that [the man] has committed the act with intent," it wrote, reported Dagens Juridik.
The girl's legal representatives criticized the verdict and told Swedish tabloid Aftonbladet's online TV crime channel Brottscentralen on Monday that they were mulling whether or not to appeal the controversial verdict.
In Sweden, which does not have juries, district court rulings are made by a chairman, who is a trained judge, and three lay judges, who are politically appointed and usually have no legal training.
Major disagreements are unusual, however in this case, the chairman of the court advocated a guilty verdict, but was overruled by all three lay judges.
"It is regrettable. The ruling is evidently incorrect, and I agree with the chairman who dissented, and note that it is a lay-judge verdict," Silvia Ingolfsdottir Åkermark, the girl's legal counsel, told Brottscentralen.
The dissenting judge took the view that the man had acted consciously, noting that according to the girl's statement he had taken her hand again after she attempted to pull it back.