A small South Korean bar has been ordered to pay damages to Chanel for infringing upon the value held by the French luxury house, court records showed Tuesday.

The Seoul Central District Court ordered the local bar, known as the Chanel Business Club, to pay 10 million won (US$8,800) in compensation to Chanel, saying that the bar inflicted damage to the distinctiveness and reputation attached to Chanel's marks.

In the lawsuit, Chanel claimed that the bar's use of "Chanel" in signs and leaflets for its business for years has damaged the distinctiveness of the registered trademarks owned by Chanel.

The French brand also said that the bar's offering of services viewed as negative caused harm on the well known high-fashion image associated with Chanel.

In a similar case, the Daejeon High Court in 2010 ruled that a local Karaoke bar's use of Burberry in the bar's name violated the rights of the British luxury brand. (Yonhap News)