Swatch's $449.5 million arbitration victory over Tiffany & Co

Swiss family-controlled watch business Swatch has come out on top after a bitter legal dispute with luxury jewellery company Tiffany & Co, winning $449.5 million (€328.6 million) in damages.

Swatch, controlled by the Hayek family, filed a claim with the Netherlands Arbitration Institute in 2011 over the termination of a contract between the two companies.

The following year Tiffany, a publicly traded company, filed a counter claim.

The pair had signed a 20-year contract in 2007 to create Tiffany Watch Co Ltd, which was a joint venture to produce and distribute Tiffany brand watches.

Swatch – the world's largest watchmaker – oversaw the manufacture of the products in Switzerland, and the products were due to be distributed via Tiffany, Swatch and independent retailers.

In a statement released in 2011, Swatch said arbitration was "necessary following Tiffany & Co's systematic efforts to block and delay development of the business".

Tiffany hit back, saying: "Despite assurances to the contrary made in 2007, Swatch has failed to provide appropriate distribution for Tiffany & Co brand watches, with the result that our current business forecasts do not include any meaningful increase in watch sales or royalty income."

Following the recent decision, Tiffany said in a statement it would review its legal options but had sufficient resources to pay Swatch the full sum – even though it is greater than its net profit for 2012.

Tiffany's counterclaim was dismissed and it was also ordered to pay two-thirds of the costs of the case – about €0.6 million – and two-thirds of Swatch's legal fees, which stand at about $8.8 million.