(Updates with FEER comment)
SINGAPORE, Sept 24 (Reuters) - Singapore's High Court has ruled that the Far Eastern Economic Review (FEER) has defamed the city-state's two most powerful leaders, a court document showed on Wednesday.
The publisher and editor of the magazine, owned by Dow Jones & Co, are to pay damages to Prime Minister Lee Hsien Loong and his father and former prime minister Lee Kuan Yew, after defaming them in an article published in 2006.
Dow Jones & Co is owned by Rupert Murdoch's News Corp NWSa.N.
The damages for the lawsuit, the latest in a string of legal action Singapore's political leaders have taken against foreign media, will be decided at a later date, the court judgment said.
The Lees sued the magazine and its editor Hugo Restall last year over an article on Chee Soon Juan, a prominent Singapore opposition politician.
The August 2006 story, entitled "Singapore's Martyr: Chee Soon Juan", criticised the government's handling of a pay-and-perks scandal at the country's largest charity, the National Kidney Foundation (NKF). The charity's former head T.T. Durai has since been jailed.
"We are disappointed with the decision," Restall told Reuters, adding the magazine is considering an appeal.
"It is notable that the court has determined that the public interest privilege that is available in the United Kingdom and other Commonwealth countries, is not applicable in Singapore," he said.
The magazine had cited fair comment in its defence, saying the article was of public interest, and that the media had a duty to publish it because the public had a right to know.
But the judge said in the judgment that if such a defence holds, "a person could continue to make defamatory remarks about a person who enjoys the highest of reputations without being liable" in Singapore.
Dow Jones is also facing contempt proceedings brought against it by Singapore's attorney general for printing editorials that "impugn the impartiality, integrity and independence of the Singapore judiciary" in the Asian edition of its Wall Street Journal.
Singapore leaders have sued and won damages in the past from foreign media groups including the Economist, International Herald Tribune and Bloomberg. They say the lawsuits are necessary to protect their reputations, but critics say they are used to crush opposition. (Reporting by Koh Gui Qing and Neil Chatterjee; Editing by Louise Heavens)