(Bloomberg) ? Pentair Inc., maker of Everpure water filters, won't have to pay 95 percent of a $193 million verdict won by Celebrity Cruise Lines Inc. following the 1994 outbreak of Legionnaires' disease on a cruise ship, a US judge ruled yesterday.

The decision in Manhattan federal court overturned $183 million of the award, the seventh largest in the US last year according to data complied by Bloomberg, because of insufficient evidence linking the outbreak to Celebrity losses. In June, the jury found Pentair unit Essef Corp. responsible for the outbreak and ordered the company pay $193 million to Celebrity, a unit of Miami-based Royal Caribbean Cruises Ltd.

"We won," said John Martin, Pentair's lawyer. "It's really up to the plaintiffs at this time as to whether they want to appeal the ruling or proceed to a new trial." Celebrity's lawyer, Gregory O'Neill, declined to comment.

The ruling may save Golden Valley, Minnesota-based Pentair an additional $175 million. In a November filing with the US Securities and Exchange Commission, the company said interest on the judgment through September 2006 would range from $78 million to $175 million, depending upon factors including interest rates

The jury's $193 million verdict had three parts ? $10.4 million for Celebrity's out-of-pocket expenses, $47.6 million for Celebrity's lost profits, and $135 million for Celebrity's lost enterprise, or takeover, value.

In setting aside most of the award, US Magistrate Judge James Francis said part of the verdict was "manifestly erroneous."

"Not only did Celebrity fail to produce any direct proof of lost bookings after 1994, but Essef proffered evidence that, in fact, Celebrity had fully recovered by that time," Francis wrote in today's 32-page opinion.

Francis ordered a new trial on lost profits and awarded a judgment to Pentair on lost enterprise value. Pentair didn't challenge the $10.4 million in out-of-pocket expenses.

Celebrity sued Essef in 1996, three years before Pentair acquired Essef. In the suit, Celebrity said Essef provided a defective filter in the ship's hot-tub system, leading to the growth of the bacteria that causes Legionnaires' disease.

The illness is an acute, sometimes fatal respiratory disease caused by a bacterium of the genus Legionella. It's characterised by severe pneumonia, headache and a dry cough.

The Centers for Disease Control linked the outbreak on the cruise ship to a whirlpool bath on a trip between New York and Bermuda. The outbreak also triggered personal injury suits and class action litigation by tourists because a subsequent cruise was halted.

The judge said yesterday that the case was delayed because files for some of the parties were lost in the September 11, 2001, terrorist attacks on the World Trade Center.

Pentair said after the verdict there was insufficient evidence for a jury to find that most of the losses claimed by Celebrity were traceable to the outbreak.

"We are gratified that our concerns about the jury verdict have been addressed by the court," said Randall Hogan, Pentair chairman and chief executive officer, in a statement.

Celebrity spokesman Michael Sheehan didn't return a call seeking comment.

Pentair shares fell 5 cents to $29.91 and shares of Royal Caribbean, the world's second-biggest cruise operator, fell 18 cents to $44.30 in New York Stock Exchange composite trading.