LVMH wins Morgan Stanley damages

Louis Vuitton is among LVMH's best known brands

Morgan Stanley has been ordered to pay 30 million euros($38.5m; £20.8m) in damages to luxury goods group LVMH.

A Paris court ruled the bank had damaged LVMH's reputation by issuing biased research on the firm.

The court said the bank had committed "a serious fault", and appointed an expert to assess whether extra damages should be paid.

Morgan Stanley said it would lodge an appeal, warning that the ruling could hinder the work of equity analysts.

Acrimony

LVMH said it could prove that Morgan Stanley's research had cost it over 70 million euros, on top of the harm to its reputation.

The court's verdict does not set a legal precedent in the United States or Europe.

But if it stands, the ruling could pave the way for similar action against other banks which issue analysis on listed French companies.

The dispute began in October 2002, when LVMH - maker of Moet & Chandon champagne and Louis Vuitton leather goods - alleged that Morgan Stanley had published inaccurate information about the firm's debts.

It also accused Morgan Stanley of concealing its relationship with rival luxury goods group Gucci.

In a court hearing in November 2003, LVMH lawyer Georges Perrier said the bank had for three years issued false advice about the luxury house's financial situation when it was engaged in a long-running bid to take control of Gucci.

The ensuing legal battle was acrimonious, with sources close to the case saying that neither side had made any attempt to settle out of court.

'Science fiction'

Morgan Stanley's lawyer Bruno Quentin described the decision as "science fiction," and said the firm would appeal.

The US bank has always vehemently denied the charges.

Patrick Ponsolle, the head of Morgan Stanley's French operation, said on Monday that the court's decision was "without any real substance, without any real teeth" and "totally unjustified."