An article published in Italian newspaper La Repubblica last May alleged Abramovich had suffered a heavy loss in a poker game and had been forced to hand over a luxury yacht worth half a million euros, his lawyer John Kelly told London's High Court.
Kelly said the untrue report, under the headline "A black year for Abramovich as he loses a yacht at poker", had caused distress and embarrassment to the Russian businessman, the Press Association reported.
He told the court the article implied that Abramovich's long-term partner Dasha Zhukova had been forced to issue an ultimatum that he either give up playing poker or she would end their relationship.
It also suggested Abramovich was seriously risking his financial stability and had already been forced to liquidate assets to cover heavy gambling debts, Kelly said.
"Regrettably, these allegations were not put to Mr Abramovich or his representatives before publication. If they had been, the defendant would have been advised of the utter falsity of the allegations," he told the High Court.
The court heard that the newspaper's publisher, Gruppo Editoriale L'Espresso, had agreed to pay Abramovich "substantial damages" which he intended to donate to charity.
Sarah Toolan, the publisher's lawyer, said it offered its sincere apologies.
"The defendant accepts that the allegations are untrue and ought never to have been published," she said.
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