Paris' court of appeal has overturned a controversial 2008 decision to pay 403 million euros ($460 million) to French businessman Bernard Tapie in an arbitration ruling.

The court's move overturns the decision taken when conservative Nicolas Sarkozy was president — and when Christine Lagarde, the current International Monetary Fund chief, was his economics minister. The case will be retried in September, the court said.

Lagarde and Stephane Richard, her former chief of staff and head of telecoms giant Orange, are under investigation over their role in the decision to pay Tapie to settle a dispute with state-owned bank Credit Lyonnais over the botched sale of his stake in sportswear company Adidas. Critics have said the deal was too generous.

Richard and Lagarde deny wrongdoing.