ROME—A Milan appeals court on Saturday ordered Italian Prime Minister Silvio Berlusconi's holding company Fininvest SpA to pay €560 million ($804.4 million) in damages to rival Compagnie Industriali Riunite SpA in a long-running legal dispute.

The damages amount is about €200 million less than the judge in the original trial had ordered Fininvest to pay. Still, the new ruling deals a blow to the Italian prime minister, who is already suffering on the political front over growing tensions inside his ruling center-right coalition.

...