French Court Rules IMF’s Lagarde Must Stand Trial in Tapie Case

France’s highest appeals court has ruled that Christine Lagarde, the head of the International Monetary Fund, must face trial regarding her involvement in a 400 million euros (approximately $440 million) payout made in 2008 to businessman Bernard Tapie. At the time of the incident, Lagarde was serving as the French finance minister.

The court dismissed her appeal against a December ruling that required her to stand trial at the Cour de Justice de la Republique, a specialized court that addresses crimes committed by ministers in office. Her attorney, Patrick Maisonneuve, expressed disappointment over the decision but maintained confidence that the trial would ultimately prove her innocence.

Lagarde faces charges of negligence for allegedly approving an exceptionally rare out-of-court arbitration resolution in a dispute involving Tapie, a backer of former President Nicolas Sarkozy, and the French state. The arbitration led to a ruling in Tapie’s favor, resulting in the significant payout, but subsequent appeals courts have since annulled that settlement.

A Paris appeals court has demanded that Tapie repay the state, though he has appealed that decision, which is still under consideration. The case traces back to when Tapie sued the state for damages after selling his shares in the sports company Adidas to Credit Lyonnais in 1993. He accused the bank of fraudulently undervaluing his stake, which it later sold for a substantially higher price.

Despite the ongoing legal issues, Lagarde was reappointed in January for a second five-year term as managing director of the International Monetary Fund.