(Reuters) – Shares of Cineworld Group fell almost 40% after a Canadian court demanded that the British cinema operator pay C$1.23billion (957 million dollars) in damages to Cineplex, a rival.

Cineworld London, second-largest cinema operator in the world, listed on the London Stock Exchange, stated it will appeal the decision, which denies its counter-claim. It also includes C$5.5million for transaction losses.

According to British companies, they disagree with the Ontario Superior Court judgment and do not expect to pay damages while an appeal is pending.

Cineplex stated Tuesday that it was satisfied with the judgment and will not comment on the matter during the 30 day period in which each party may appeal.

Originally announced December 2019, the takeover would have made Cineworld North America’s largest cinema operator. However, the deal was canceled by Cineplex in mid 2020 due to breaches of the merger agreement.

Cineplex denied these claims, accusing the British company in its dispute with Cineplex of not fulfilling the terms of the agreement due to the impact of the pandemic on the sector.

This litigation is coming as the cinema industry has struggled with the pandemic. Lockdowns have shut down theatres throughout the year, preventing movie release and putting at risk the growing competition from streaming.

Cineworld shares, which derive the majority of their revenue from Regal cinemas in America, dropped as high as 40% to hit a one-year low on London’s stock exchange.

($1 = 1.2857 Canadian dollars)