A protracted row ensued, with Shingler unable to represent Andy Robinson's men while the issue was being dealt with by the IRB.
The initial verdict ruled in Wales' favour but Scotland appealed leading to a conclusive verdict being returned today.
Wales argued that London Irish fly-half cum centre Shingler's appearance against France in an U20 6 Nations fixture in 2011 meant he was tied to them due to the fact that their U20 side had been designated as the next senior representative team under IRB Regulation 8.
Neither Wales nor France currently have an A side and therefore the two countries nominated their U20 squads as their second senior representative team for that match, something the IRB viewed as crucial in reaching their decision.
"Under the regulations committee decision Shingler was deemed to have been captured by Wales, having represented the Wales U-20 team against the France Under-20 team in a 2011 Six Nations fixture," read an IRB statement.
"Following the Scottish Rugby Union's appeal of the Shingler decision, the IRB council considered and determined the matter during its annual meeting in Dublin.
"Council, having considered all the facts and having heard submissions from the SRU and WRU legal representatives, dismissed the appeal and upheld the decision of the IRB regulations committee.
"The council therefore determined that Steven Shingler is tied to Wales in accordance with IRB regulation 8 and therefore is ineligible to represent another union."
The move is a blow to Shingler's hopes of senior international recognition despite his brother, Scarlets flanker Aaron, having been included in the Welsh squad for the June Test with the Barbarians and the tour of Australia.
Whereas the 20-year-old appeared to stand a good chance of forcing his way into Scotland's midfield options sooner rather than later, a whole host of other contenders stand in his way of a spot in the Wales squad.
Rhys Priestland, Dan Biggar and James Hook are all vying for the Welsh fly-half spot, while Hook and fellow Lion Jamie Roberts, Jonathan Davies, Scott Williams, Ashley Beck and Andrew Bishop are all ahead of him in the running for the 12 and 13 shirts.