Wharf Holdings is likely to launch a fresh appeal against a United States court decision to award US$185.9 million in damages to cable-television company UnitedGlobalCom (UGC). 'We will appeal vigorously,' Wharf executives told analysts yesterday. In an announcement to the stock exchange, Wharf said it was consulting with lawyers about how to proceed after a court of appeal in Denver upheld a 1997 judgment by a district court in the city. Wharf said it might take its next appeal to the US Supreme Court. The district court ordered Wharf to pay US$67 million in compensation and US$58.5 million in punitive damages after legal action was taken by Denver-based United International Holdings, which has since changed its name to UGC. The court also ordered Wharf to pay US$28.2 million in accrued interest. This figure was adjusted up to US$60.4 million by the Court of Appeal. UGC alleged Wharf managing director Stephen Ng Tin-hoi had reneged on a 1993 verbal agreement to sell a 10 per cent stake in Wharf's cable television unit, now called i-Cable Communications. UGC launched legal action against Mr Ng, Wharf and the company's wholly owned subsidiary, Wharf Communications Investments. Wharf challenged the awards in the Court of Appeal, saying they were contrary to Colorado and federal laws and not supported by evidence. 'We agree that the punitive damages award here is large,' wrote Judge Mary Beck Briscoe in the ruling made by the appeal court. But 'coupled with the reprehensible nature of Wharf's conduct', the award was not 'grossly excessive', Ms Briscoe said. Wharf made a HK$500 million provision in 1997 for litigation costs in the case with UGC and another with Danish trading company ADS. Wharf won the ADS case. The company was undecided about whether another provision needs to be made this year, analysts said. Any decision on another provision 'will depend on what the auditors think about the case', analysts quoted Wharf officials as saying. 'Wharf this year may need to charge up to HK$950 million as an exceptional loss, or about 32 per cent of its expected earnings,' predicted Anton Kwang, an ABN Amro analyst. Mr Kwang said a correction in Wharf's share price on Tuesday resulted from the judgment against the company. 'Wharf lost HK$2.9 billion in market capitalisation on Tuesday trading versus HK$1.4 billion in a possible legal loss,' another analyst said. 'It is clear market over-reaction.' Wharf's share price rebounded 0.33 per cent yesterday to close at HK$15.05 after falling 7.12 per cent on Tuesday. If Wharf loses its next appeal in the marathon legal battle, the company's cash-flow could be hard hit, analysts said. The company would lose US$153 million in pledged bonds, plus accrued interest, they pointed out. 'The longer the lawsuit drags on, the more liabilities the company is going to incur,' an analyst said. He said the value of a 10 per cent stake in i-Cable Communications at yesterday's closing price of HK$3.525 would amount to half of the damages Wharf had been ordered to pay. I-Cable, whose market capitalisation stands at HK$7.1 billion, is not directly involved in the lawsuit.