Image caption New York-based luxury jewellery chain Tiffany & Co first struck a joint venture deal with Swatch six years ago

The Tiffany & Co jewellery chain has been ordered to pay Swatch Group $448m (£274m) over a failed joint venture.

The chain said it was "shocked and extremely disappointed" with the decision and cut its full year earnings on the news.

Swatch, which is the world's biggest watchmaker, struck a deal in 2007 with Tiffany to make watches together under the Tiffany brand.

But a dispute started in 2011 when Swatch cancelled the cooperation.

The Swiss watchmaker said at the time that Tiffany had been trying to block and delay the venture, which was called Tiffany Watch Co.

'Own watches'

"We were shocked and extremely disappointed with the decision of the majority of the arbitral panel," said Tiffany chief executive Michael Kowalski, in a statement.

The joint venture would have been a 20-year agreement for Swatch to sell watches under the new brand in Tiffany's own shops as well as other high-end outlets.

The two companies would have shared profits.

Tiffany, which has its headquarters in New York, faced Swatch in an arbitration court in the Netherlands, where the joint venture was based.

The court has also required that Tiffany pay about $9m to cover Swatch's legal fees.

Tiffany said the decision would not impact its ability to realise its existing business plans in the short or long term and that it would review its legal options.

Shares in Swatch closed up 1.1% on Friday worth 581.50 Swiss francs. Its shares are up about 26% this year.