MILAN, April 19 (Reuters) - A Milan court on Monday rejected a multibillion-euro damage request by Mediaset (MS.MI) in a case stemming from the failed sale of the Italian broadcaster's pay-TV arm to French media giant Vivendi (VIV.PA), a court document showed.
The decision represents the first verdict in the long-running dispute pitting former Italian Prime Minister Silvio Berlusconi, whose family controls Mediaset, against French billionaire Vincent Bollore, a leading investor in Vivendi.
Mediaset and Vivendi have been at loggerheads since 2016, when the French group ditched an accord to buy Mediaset's loss- making pay-TV unit and then built a 29% stake in the company, which the Italian group considers hostile and illegitimate.
The court ruled that the stakebuilding was not illegitimate and did not constitute unfair competition, the document showed.
Sources had said Mediaset had sought around 3 billion euros ($3.6 billion) in damages following the failed sale and subsequent stakebuilding.
But the court ordered Vivendi to pay only around 1.7 million euros in compensation for failing to meet some preliminary obligations when it decided to ditch the contract, which the court confirmed had been validly resolved.
Mediaset's insistence on compensation for the breach of contract had been one of the main hurdles preventing an out-of-court settlement between the two groups despite repeated attempts over the years.
The dispute with its second-largest shareholder has put Mediaset in a deadlock, complicating the broadcaster's plans to develop a European growth strategy that it sees as crucial to tackle competition in the industry from streaming services like Netflix (NFLX.O) and Amazon Prime (AMZN.O).
Mediaset said it would appeal the ruling to increase the size of damages.
A spokesman for Vivendi said the company was "satisfied" with the court's decision.
($1 = 0.8310 euros)
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