Malaysia Airlines (MAS) said Monday a European arbitration tribunal had ordered it to pay Advanced Cargo Logistic (ACL) EUR6.9 million euros (USD$9.8 million) for breach of a cargo handling contract.

In 2004, ACL had sought to claim EUR62.7 million from MAS after the Malaysian firm breached an agreement to maintain its European cargo hub at Germany's Frankfurt-Hahn airport for 10 years from 1999.

"Due to prudent provisioning in previous years, and given that the award orders MAS to pay only about 10 percent of the sum originally claimed by ACL in 2004, the award is not expected to have a material adverse impact on the financial position of MAS," it said in a statement.

The airline said it is seeking advice to challenge the ruling.