A woman who conceived a baby with a stranger's sperm in a fertility treatment mix-up was found to have suffered a loss of "genetic affinity" and is entitled to compensation worth nearly a third of the cost for bringing up the child.

But the Court of Appeal, in its ground-breaking judgment yesterday, made it clear that this in no way means that the child should be seen as a "continuing source of loss" to the parents, who have accepted her as their own.

Instead, the damages are awarded because the woman could not fulfil her basic human desire to have a child of her own with her husband.

The court's ruling in what it described as "possibly one of the most difficult" it had to deal with caps a long-running battle between the couple and Thomson Fertility Centre's parent company Thomson Medical, and two embryologists.

In 2010, the couple went to the centre for in-vitro fertilisation (IVF) treatment. A stranger's sperm - instead of her husband's - was used to fertilise her extracted eggs.

The mistake resulted in her giving birth to a baby girl with her genetic make-up but not her husband's.

In 2012, the woman sued for damages, including for the upkeep of the child, known as Baby P in court proceedings.

The High Court disallowed the claim for upkeep in 2015, citing policy considerations which view the birth of a healthy child as a blessing. The woman appealed.

The Court of Appeal, comprising Chief Justice Sundaresh Menon, Judges of Appeal Chao Hick Tin, Andrew Phang, Tay Yong Kwang and Justice Steven Chong, admitted it was faced with a conundrum.

If it refuses to grant upkeep costs, the woman "would receive a comparatively modest award for pain and suffering".

This, wrote Judge of Appeal Andrew Phang on the court's behalf, "would appear to undercompensate" the woman.

"After all, the only reason why she elected to conceive via IVF was because she desired a child with her husband but, because of the... mistake, she finds herself the mother of a child fathered by a complete stranger."

It was argued that the award of upkeep costs denigrates the worth of Baby P, he pointed out.

On this point, the Court of Appeal upheld the decision of the High Court, explaining that "the obligation to maintain one's child is an obligation at the heart of parenthood".

But the court also recognised that the woman has lost something of profound significance.

"The ordinary human experience is that parents and children are bound by ties of blood and share physical traits. This fact of biological experience - heredity - carries deep socio-cultural significance," the judgment read, highlighting some of the woman's depositions.

She had told the court how Baby P's different skin tone "never fails to draw curious looks from the public... turning joyous family time into depressing moments".

"Further, it is very disheartening to both my husband and me when my eldest son queries us on the difference in the way his sister looks."

While the court made a "categorical and unequivocal objection to any suggestion that racism has any place in our society", the issue of race was a real one, it said.

The court even highlighted a point made by the Constitutional Commission's report into the Elected Presidency in respect of race, which said that "Singapore cannot yet be considered a post-racial society: This is a reality that must be faced, even if it is one that is not to be endorsed".

The court said it recognised the complex role that physical resemblance, race and cultural and ethnic identity "have had and continue to have on our individual well-being, as they so evidently have had on the appellant's".

The court decided that the loss of genetic affinity has resulted in social stigma and embarrassment for the family. It ruled that the actual sum the woman can claim should be set at 30 per cent of the financial costs of raising Baby P, with the precise quantum to be determined by the High Court.

Lawyers whom The Straits Times spoke to said this should apply to when Baby P reaches the age of 21.

The Court of Appeal added that it would be preferable for the parties to arrive at an amicable settlement in order that closure might be achieved.

The clinic was defended by a team of lawyers led by Senior Counsel Lok Vi Ming and Audrey Chiang while the woman was represented by Senior Counsel N. Sreenivasan, S. Palaniappan and Derek Ow.