Ecuador's high court on Thursday ruled against the El Universo newspaper in a libel suit filed by President Rafael Correa that was seen as a crucial test of press freedoms in the South American country.
The National Court of Justice (CNJ) sentenced the three top executives of the media company to three years in prison and fined them $40 million, denying a lower court appeal filed by El Universo, which it called "out of order."
Correa sued the El Universo daily in March 2011 alleging "defamatory libel" over a column by former opinion page editor Emilio Palacio that accused the president of crimes against humanity.
Palacio suggested that a future president could take Correa before a criminal court for ordering the military to fire at its discretion on a hospital on September 30, 2010, during a police uprising.
A lower court judge ruled against the newspaper in July, handing down the $40 million judgment and prison sentences against the newspaper's publisher, Carlos Perez, deputy directors Cesar Perez and Nicolas Perez, and Palacio, who fled to Miami. An appeals court upheld the sentence in September.
The case has been widely criticized by rights groups as a blow to freedom of speech in Ecuador, and also calls into question the independence of the Ecuadoran courts.
Xavier Zavala, a lawyer for El Universo, on Wednesday said the case had turned Ecuador into an object of "ridicule."
But Correa, speaking at an evening press conference, said that a ruling in his favor would be "a great step for the liberation of our America from one of the most powerful unpunished institutions -- the corrupt press."
Correa said there was keen interest in the case because "all across Latin America they are suffering the same abuse and corruption" from a "certain type" of news media.
The defense has vowed to take the case to the Interamerican Human Rights Commission and then to the Interamerican Human Rights Court.
Speaking in Miami on Wednesday, Cesar and Nicolas Perez said they feared for their safety in Ecuador.
"Of course we're afraid ... it's been five years of violent statements from the president against the media in general, with a special fixation against El Universo," Cesar Perez said at a press conference.
Palacio has sought political asylum in Miami and is considered a fugitive from Ecuador.