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Fulham lost their bitter legal battle with ex-manager Jean Tigana at London’s Court of Appeal on Tuesday.

The court dismissed the Premier League club’s appeal against a landmark High Court ruling that left them facing a damages payout of at least two million pounds ($3.48 million) to Frenchman Tigana.

Last November Fulham, whose chairman is Mohamed Al Fayed, lost its High Court claim for damages against Tigana, whom it had accused of overpaying millions of pounds for two signings.

Tigana won a counter-claim that he was contractually entitled to payments and share options worth over 2.1 million pounds.

In a case watched closely by other clubs and their managers, Fulham had claimed that the Frenchman paid too much for Dutch goalkeeper Edwin van der Sar and French striker Steve Marlet, as well as working secretly on transfer deals in breach of his duty to the club.

However, dismissing the claim and backing Tigana, who was Fulham manager from July 2000 to April 2003, Mr Justice Elias said: “I consider that the defendant has behaved properly and conscientiously in his dealings with Fulham and did not act dishonourably towards the club.”

Challenging that decision at the Court of Appeal, Fulham claimed that the judge’s rulings in relation to the law were wrong and said that he had come to findings which were “inconsistent” with the facts of the case.

However, backing the High Court ruling on Tuesday, the Lord Chief Justice, Lord Woolf, said: “Mr Tigana was acting in what he perceived to be the best interests of Fulham, no harm was in fact caused, he did not conceal his actions, and Mr Al Fayed did not consider this to be an act of misconduct at the time.

“Further, even if Mr Tigana’s actions could somehow have constituted a repudiatory breach, Mr Al Fayed subsequently acquired full knowledge of events and allowed Mr Tigana to continue in employment for a further 18 months, clear evidence of affirmation of the contract.

“This allegation therefore provides no support of Fulham’s case.”

The Appeal Court added to Fulham’s overall bill by ordering them to pay the legal costs of the appeal, to be assessed. The judges ordered Fulham to pay 50,000 pounds up front within seven days.