A jury has ordered an $85m (£53m) compensation payout by the American military contractor Kellogg Brown and Root – which helped build Guantánamo Bay and has tendered to run key police services in Britain – after finding it guilty of negligence for illnesses suffered by a dozen soldiers who guarded an oilfield water plant during the Iraq war.

After a three-week trial the jury deliberated for two days before reaching a decision against KBR, which used to be part of Halliburton corporation. KBR was ordered to pay $6.2m to each of the soldiers in punitive damages and $850,000 in non-economic damages.

During the Iraq war KBR was the engineering and construction arm of Halliburton, the biggest US contractor during the conflict. KBR split from Halliburton in April 2007 and has since tendered in Britain to run key police services in Surrey and the West Midlands.

The US lawsuit was the first concerning American soldiers' exposure to a toxin at a water plant in southern Iraq. The soldiers have said they suffer from respiratory ailments after their exposure to sodium dichromate and fear that a carcinogen it contains – hexavalent chromium – could cause cancer later in life.

Another suit from Oregon national guardsmen is on hold while the Portland trial continues. There are further suits pending in Indiana and West Virginia.

KBR witnesses testified that the soldiers' ailments were a result of the desert air and pre-existing conditions. Even if they were exposed to sodium dichromate, KBR witnesses argued, the soldiers were not around enough of it, for long enough, to cause serious health problems.

The contractor's defence ultimately rested on the fact that it informed the US army of the risks of exposure to sodium dichromate.

KBR was tasked with reconstructing the decrepit, scavenged plant just after the March 2003 invasion while troops from the US national guard defended the area. Bags of unguarded sodium dichromate – a corrosive substance used to keep pipes at the water plant free of rust – were ripped open, allowing the substance to spread across the plant and into the air.

When KBR was still part of Halliburton it won a large share of Pentagon contracts to build and manage US military bases in Iraq after the 2003 invasion. Its former chief executive, Dick Cheney, was US vice-president.