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I had this issue under CygWin in Windows. I have read elsewhere that Java does not understand the CygWin paths (/cygdrive/c/some/dir instead of C:\some\dir) - so I used a relative path instead: ../../some/dir/sbt-launch.jar.
/cygdrive/c/some/dir
C:\some\dir
../../some/dir/sbt-launch.jar