The company behind Whyte & Mackay whisky yesterday suffered a setback over its sale to Diageo after the proposed deal was annulled by an Indian court.

United Spirits had been due to be sold to the manufacturers of Johnnie Walker whisky.

But the decision by Karnataka High Court in southern India is a blow to a deal beset by complications. Diageo said it would appeal.

The court is thought to have ordered the cancellation of the sale in response to a petition by creditors of United Breweries Holdings Ltd, which sold its stake in United Spirits.

They pursued a legal case seeking to force the sale of United Breweries Holdings, expecting the proceeds could be used to settle their claims.

Diageo has been attempting to increase its foothold in India's growing spirits market, but analysts doubted whether it would end the deal given the ­prospect of appeals, ­including to the country's Supreme Court, and previous approvals by regulatory authorities.

Diageo completed its ­takeover of United Spirits in July, almost eight months after the companies announced the deal, because of legal and regulatory difficulties.

At the heart of these is bankrupt Kingfisher Airlines, part of the wider UB Group controlled by the Indian businessman Vijay Mallya. UB Group is the owner of United Brewery Holdings and previously owned United Spirits.

Glasgow-based Whyte & Mackay also owns the Jura and Dalmore single malt brands and has four distilleries. Diageo owns 29 distilleries.