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The ruling for Cleveland Bridge UK to pay Brookfield Construction £4.2m over a dispute on the Wembley stadium project has been partly over-turned.

The Court of Appeal reduced the judgement to £1.8m, meaning that with interest taken into account, Brookfield (formerly Multiplex Construction UK) would be forced to return some £3m - 49% - of the original award.

In 2008, Multiplex, the main contractor for the new Wembley stadium, launched litigation against CBUK - which had agreed a £60m subcontract for steelwork, including the stadium arch - claiming there were errors in the design and fabrication of steelwork for the project.

CBUK was found to be in breach of contract for walking off the project in 2004 following a dispute over payment.

In a September hearing during 2008, which had been expected to conclude the epic legal battle, Judge Jackson ruled that CBUK owed Multiplex for damages for breach of contract, overpayments and interest. It had been seeking up to £25m, although damages were capped at £6m.

Last week, however, the Court of Appeal ruled that the calculation for the initial judgment had been incorrectly made on the basis of work actually completed.

The parties will present agreed figures on the impact of the Court of Appeal's judgment on 5 March 2009 and the costs implications of the Court of Appeal's judgment will be put forward by the parties by 19 March 2010.

The dispute is one of a series of actions over the Wembley project. The stadium was completed a year late in 2007 at a cost of £757m, compared with an original guaranteed maximum of £458m.

Multiplex and CBUK have spent about £22m so far over the legal wrangling, with the bill for photocopying alone adding up to £1m.