Fulham have failed in their attempt to win damages from former manager Jean Tigana.
The Premier League club claimed that Tigana had overpaid more than £7m for new players and had negotiated transfers in secret, in breach of his contract with the club.
Tigana said he had always acted honestly when he was manager from June 2000 until his dismissal in June 2003.
In court Al Fayed said he suspected Tigana of taking kickbacks on the deals. Tigana’s lawyer said that the club chairman had lied in his testimony.
Tigana won £455,000 for unfair dismissal at an employment tribunal in September 2003.