PARIS (REUTERS, AFP) - French judges on Monday (Dec 19) found International Monetary Fund (IMF) chief Christine Lagarde guilty of negligence for failing to challenge a 400 million euro (S$604.4 million) state arbitration payout to a business tycoon in 2008 when she was French finance minister.

Despite the ruling, the judges did not hand down any sentence in the case on her decision to allow the rare out-of-court arbitration payment. She has denied the negligence charges.

Her lawyer said immediately after the ruling that his team would look into appealing the decision.

The ruling risks triggering a new leadership crisis at the International Monetary Fund after Lagarde's predecessor Dominique Strauss Khan resigned in 2011 over a sex assault scandal.

At the heart of the trial is Lagarde's decision to allow a dispute over flamboyant businessman Bernard Tapie's sale of the Adidas sports brand to Credit Lyonnais bank to be resolved by an unusual private arbitration panel, instead of through the courts.

Lagarde had argued in evidence on Friday she had acted in good faith in approving the payment to Tapie to settle the row. She said her sole aim had been "to defend the general interest".

But she has faced accusations in court that the arbitration process was a flawed way to deal with the dispute with Tapie.

An IMF spokesman said the board is expected to meet shortly to consider the results of the trial.