International Monetary Fund (IMF) chief Christine Lagarde has been convicted of negligence on Monday by a French Court, but no jail punishment was handed down.

The verdict came after negligence charges were filed against Lagarde over the approval of a €404 million ($429m; £340m) state payout she awared as French finance minister in 2008 to business tycoon Bernard Tapie for the disputed sale of a firm.

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Although she has avoided a sentence, the IMF chief denied the negligence charges. Lagarde was not present in court as she left France for Washington.

The French government, on the other hand, said it still has confidence in the leadership abilities of the IMF chief.

Meanwhile, the decision rested on a legal article (in French) that allows courts to deliver a guilty verdict but withhold actual punishment, BBC reported.

Reuters quoted Judge Martine Ract Madoux saying, "The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account." Madoux also takes into consideration the IMF chief's  good reputation and international standing as reasons.

The Court of Justice of the Republic (CJR) trials are rare, but Lagarde's case decision is similar to the judgement given to Edmond Herve, a French politician who is guilty of negligence over a contaminated blood case, in 1999.

Patrick Maisonneuve, Lagarde's lawyer, is considering of appealing the case to clear Lagarde's name; however, it could also turn out worse for Lagarde since she was not given a sentence.

The trial threatened to upset the stellar career of Lagarde as being the first woman ever to become IMF chief of a Group of Eight country.

Lagarde has won respect from global finance leaders for pushing governments in  boosting economic growth and helping to include China's yuan in the fund's currency basket.

The ruling could cause a new leadership crisis at the IMF. 

TagsChristine Lagarde, payout, Jail Punishment, International Monetary Fund (IMF), criminal negligence