A Madrid court has ordered Santander to pay Italian banker Andrea Orcel €67.8m over an offer to make him CEO which the Spanish bank withdrew, a pricey twist in an employment dispute that has captivated the world of high finance.

The row between Orcel and Santander chairman Ana Botin ruptured a close professional bond.

Orcel had previously been Botin's investment bank advisor and the dispute put Europe's star dealmaker abruptly out of a job.

Orcel and Botin ended up in court after Spain's largest bank dropped its plans to make the former UBS investment banker its CEO as a result of a disagreement over his pay.

Orcel had already left UBS to prepare for the new role.

The court said Santander's job offer letter to Orcel was a binding contract and Santander will have to compensate him.

"The contract was unilaterally and arbitrarily rescinded by Banco Santander," the court said in its ruling, which can be appealed in 20 days before a Madrid regional court.

"The situation created by Banco Santander caused Mr Orcel clear moral damage," the ruling, dated December 9 but released today, said.

A spokesperson for Santander that the bank would appeal the ruling.

The court ruling caps a successful week for Orcel, who is now CEO of UniCredit.

He won plaudits this week when he unveiled a new strategy for the Italian bank, pledging to return €16 billion to investors, which sent its shares to their highest since February 2020.

The court said Santander has to pay Orcel €17m for a sign-in bonus, €35m for a buyout clause, €5.8m for two years' salary and €10m for moral and reputational damage.

Santander is also requested to pay legal interest since the date of filing.

The case revolved around whether a four-page offer letter to Orcel in September 2018 was a binding contract or a non-binding initial offer, as Botin asserted in the first session of the Madrid court hearing in May.

In January 2019, Santander said the bank could not meet Orcel's pay demands, which included covering up to €35m of a €55m compensation package he was due to receive in future years from UBS.

Orcel originally sought as much as €112m from Santander for breach of contract and damage to his career for the bank's sudden U-turn.

But in May he dropped the part of his legal claim that would require the Spanish bank to hire him. This was after he was appointed UniCredit CEO.

He also reduced his demand to between €66-76m, according to sources close to the matter, a court document and Santander's lawyer.

At the hearing in May, Botin and Orcel, who himself had not been called to testify, sat just a few seats apart.

During the hearing Botin testified that Orcel had also breached the terms of the offer letter, which stated he would make his best efforts to reduce the amount of deferred compensation Santander owed him.

She said he had refused to deduct €13.7m he was to receive as a bonus from UBS for work done in 2018 from the sum owed him.

But today, the court said that it could not be considered as proven that Orcel did not make his best efforts to try to reduce the buyout.

In October, the court had referred to the testimony of Axel Weber, the chairman of UBS, who said Orcel contacted him repeatedly because he was not happy with UBS' decision not to stump up his deferred pay if he quit to join the Spanish rival in late 2018.

"Mr Orcel's best efforts are considered beyond doubt," the court said in its 24 page ruling.