The ruling could pave the way to a turnaround

Approval of the package would speed up attempts by ABB to sell off assets, reduce its debt load and pave the way to recovery.

The ruling by the Delaware bankruptcy court on the asbestos agreement capped potentially ruinous claims at $1.3bn, although a court request for more information caused some uncertainty.

"The court has issued a strong and detailed opinion in favour," said Thomas Schmidt, ABB spokesman.

"We... look forward to a final order from the district judge in the very near future."

Asbestos woes

ABB, once one of the best-regarded industrial companies in the world, fell into difficulties last year.

It missing a series of performance targets, and admitted liabilities from asbestos-related litigation in the US.

ABB still has to submit more information about its package and wait for more than a month during an appeal period.

"This decision represents yet another delay for ABB but could be viewed positively, given that all objections relating to the bulk of the lawsuits have been overruled," said Pictet analyst Alex Migliorini.

Disposals

Once the asbestos problem has been resolved, the company will be able to accelerate its divestment of its Oil, Gas & Petrochemicals division.

Interested buyers had been reluctant to take on the division while risks associated with asbestos litigation remained.

ABB hopes a sale will help it reduce its debt to $6.5bn before the year-end.