Manchester City won an Appeal Court ruling on Tuesday that their former manager Joe Royle must hand back damages worth more than 400,000 pounds ($768,800) which he received after being sacked in 2001.

The Appeal Court overturned a high court decision that Royle was entitled to 750,000 pounds compensation under his contract, even though the club were relegated from the Premier League at the end of his spell in charge.

The judges ruled that Royle was entitled to 150,000 pounds based on what he would have earned the next season with the club in the second division.

Royle is now seeking promotion to the Premier League as manager of Ipswich Town.

The 55-year-old, who was not present at the ruling, was refused permission to appeal to the House of Lords and must now ask the Law Lords directly for the go-ahead to take his case further.