Burness Paull intends to continue fighting the action brought by its client Robert Kidd, the founder of Aberdeen oil services company International Tubular Services (ITS).
The ruling by Judge Tyre in the court of session is the latest development in a long-running dispute over the sale and subsequent failure of ITS which collapsed into administration almost four years ago before being sold to a rival.
Mr Kidd claims that law firm Paull and Williamson – which merged with Burness in 2012 – caused him to lose control of the company, leading to him suffer the losses claimed.
Mr Kidd claimed that partners at Paull and Williamsons had been working for, or colluding with US venture capital firm Lime Rock Partners, which bought a stake in ITS from Mr Kidd in 2009.
In a summary decree, judge Lord Tyre agreed that the law firm had breached its fiduciary duty to its client Mr Kidd as a result of its former partner, Ken Gordon, having acted for Lime Rock, a claim which Burness Paull has admitted.
Burness Paull confirmed that Mr Gordon left his position as partner with the firm in October last year.
Mr Kidd is expected to press ahead with the next stage of his claim, seeking £168 million “plus interest” in an action that has been in court for the last 18 months.
A spokeswoman for Burness Paull said: “We note Lord Tyre’s decision and will continue to defend the action, which relates to a historical case involving Paull and Williamsons, prior to the merger with Burness.
“It would be inappropriate to comment further on the matter at this stage.”
Mr Kidd is now resident in Cyprus.