IMF chief to stand trial over 400-billion-euro arbitration ruling

International Monetary Fund chief Christine Lagarde has been ordered to stand trial in France over her role in a 2008 arbitration ruling that handed 400 million euros ($434 million) to French businessman Bernard Tapie.

The case will be heard by magistrates at the Cour de justice de la Republique — which judges ministers for crimes in office, France's prosecutor general confirmed.

The decision came despite the prosecutor's recommendation in September that investigations be dropped against Lagarde for alleged negligence in the affair while she was France's finance minister.

Lagarde's lawyer, Yves Repiquet, said he would be recommending that she appeal against the decision, which would bring her to court over an affair that dates back more than 20 years.

"It's incomprehensible," Repiquet said on French TV channel iTele. "I will recommend Lagarde appeal this decision."

While Lagarde was finance minister, Tapie won French government compensation after selling his stake in sports company Adidas to Credit Lyonnais in 1993. He claimed the now defunct bank had defrauded him after it later resold his stake for a much higher sum.

Earlier this month, a French court dismissed Tapie's demand for a further payout of over a billion euros, ordering him instead to pay back the original compensation.

Wire services