The Ontario Superior Court of Justice has ruled in favour of Canadian movie theatre operator Cineplex in its breach of contract lawsuit against Cineworld Group – one of the world’s largest theatre chains.

Canada’s largest film exhibitor issued a statement Tuesday (Dec. 14) saying the court awarded the company damages of $1.24 billion and denied a counterclaim by Cineworld.

“We are pleased that the court found Cineplex acted properly throughout this difficult period in our history,” said Ellis Jacob, president and CEO of Cineplex, in a statement. The company will have no further comment during the 30-day period during which either party can appeal the decision, it added.

Cineworld said it disagrees with the ruling and will appeal. “Cineworld does not expect damages to be payable whilst any appeal is ongoing,” the company added in a statement, which said the court awarded Cineplex damages of $1.23 billion for lost synergies to Cineplex and $5.5 million for lost transaction costs.

Cineplex sued Cineworld for $2.18 billion in damages in July 2020, after the U.K. cinema giant cancelled its $2.8 billion acquisition of the Toronto-based exhibitor, which operates over 170 movie theatres and location-based entertainment venues across Canada. The mega-deal collapsed on June 12, 2020, about half a year after it was announced in mid-December of 2019, with Cineworld agreeing to buy Cineplex at $34 per share.

Cineworld filed a counterclaim and said it had terminated the Arrangement Agreement, in part, because it had become aware of “certain breaches” by Cineplex in relation to the deal.

In a virtual trial that began this past September, Cineplex said Cineworld acted in bad faith by delaying the takeover, hoping it would default on a $725-million debt limit needed to secure the deal.

Cineworld, however, said it pulled the plug after Cineplex “decided to finance itself off of suppliers, film studios and, eventually, landlords” due to cash-flow problems. It argued it had every right to terminate the deal because Cineplex strayed from the “ordinary course” of business by delaying payments.

Cineplex denied Cineworld’s allegations, saying it had complied with the terms of the agreement. It also said the U.K. firm had “no legal basis” to terminate the deal and had “buyer’s remorse” as a result of the COVID-19 pandemic shutdowns that have crippled the theatre business.