The UK Court of Appeal has ruled that Etihad Airways and Aldar don't have to pay damages to the Force India team for the early termination of a sponsorship agreement.

It was announced last year by the High Court that the two Abu Dhabi companies had to pay Force India a sum of nearly $5 million for terminating a three-year deal that had been signed while the team was still known as Spyker.

However, the Court of Appeal has ruled that the change of ownership and subsequent rebranding of the team had occurred without the consent of the two sponsors and ruled that no financial penalty should be paid to the team.

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"Etihad and Aldar had entered into a three-year sponsorship agreement with the Spyker Formula 1 Team in 2007," an Etihad statement read. "Following a change in ownership, the name of the team was changed to Force India Formula 1 Team and the car was completely rebranded, without the approval of the main sponsors, Etihad and Aldar.

"The Court of Appeal confirmed that as a result of this, and other material breaches by Force India of the contract, Etihad and Aldar were within their contractual rights to terminate the sponsorship agreement.

"As a result, the Court of Appeal reversed the earlier decision of the High Court, and found that Etihad and Aldar were not only entitled to terminate the contract but that Force India was in breach of their contractual obligations.

"The Appeal Court has therefore ordered the case to be referred back to the Queen's Bench Division for an assessment of Etihad 's and Aldar's damages, and ordered Force India to pay Etihad's and Aldar's costs of the proceedings."