The decision relates to Inveresk's sale of its Gemini brand to Tullis Russell - the company said it has been awarded the sum in respect of the damage to the brand caused by Inveresk's actions.
Lord Drummond Young issued his judgement on 10 November and found "resoundingly in Tullis Russell's favour", with the company's claims for reimbursement of compensation paid to Tullis Russell customers (£500,000) and costs incurred in handling customer complaints (£55,000) upheld in full.
The judge went on to award a further £4.25m in compensation in respect of the damage to the Gemini brand caused by Inveresk's actions. Tullis Russell said that there will also be interest due to be paid as well as expenses.
Chris Parr, Tullis Russell group chief executive, said: "We are delighted for ourselves, and just as importantly our customers who suffered as a result of Inveresk's behaviour, that the court has determined such a substantial award in our favour.
"No-one should be able to act as they did over the Gemini acquisition without being held to account."
The judgment follows a successful appeal earlier this year to the Supreme Court against Inveresk's claim for payment of approximately £1m.
Tullis Russell Papermakers first took legal action against Inveresk over the purchase by Tullis Russell of the Gemini paper brand from Inveresk in July 2007.
Inveresk went into receivership on 8 October with joint receivers Andrew Davison, Colin Dempster and Chris Marsden from Ernst & Young. Ernst & Young declined to comment on the outcome of the case.Earlier this month, Inveresk's St Cuthberts Paper Mill was bought by the existing general manager securing all 41 jobs.
The business and assets of the site in Wells, Somerset, have been sold as a going concern to a newly formed company, St Cuthberts Mill, in a move that was led by Henrik Bernander.
