(Adds detail, quotes and background)
MILAN, Jan 8 (Reuters) - An Italian appeals court on Monday acquitted two former Leonardo executives in a bribery case related to a large 2010 helicopter contract with the Indian government.
Giuseppe Orsi, former chief executive of the Italian state-controlled defence group previously known as Finmeccanica, and Bruno Spagnolini, former head of its helicopter unit AgustaWestland, were both cleared of corruption charges, with the court citing a lack of sufficient proof.
In December 2016 Italy's highest court had ordered a retrial of the case after the former executives of the Rome-based group had been found guilty on corruption charges related to a 560 million euro ($672 million) contract to supply a dozen helicopters to New Delhi.
After Monday's acquittal Orsi's lawyer, Ennio Amodio, said the decision closed a case "which should have been clear to investigators (from the start)", adding that the judge found no evidence of corruption, of the passage of money or that Indian officials interfered with the tender.
Orsi had received a four-and-a-half-year jail sentence after the previous trial had overturned the verdict of a lower court, with Spagnolini sentenced to a four-year jail term.
"With all the damage that was caused to the company, the damage caused to me is minor," Spagnolini told reporters after Monday's decision.
The case was a big political issue in Italy and India when it opened in 2012 and severely tarnished the company's reputation at a time when India had established itself as one the world's biggest arms buyers.
The Italian group has always said the case was against the individuals rather than the company and the case against Leonardo was dropped by prosecutors in July 2014.
AgustaWestland, which was treated separately, agreed on a 7.5 million euro settlement with the court a month later.
Mauro Moretti, Leonardo's CEO from March 2014 to May last year, worked to improve the company's reputation during his time at the helm and streamlined the organisation to increase transparency.
A separate investigation into suspected corruption and money laundering is still open in India and involves individuals alleged to have worked as intermediaries in the deal.
India cancelled the helicopter contract in 2013 after Orsi was arrested, but AgustaWestland opposed India's decision and the contract remains suspended and the subject of international arbitration in Paris.
Shares in Leonardo were up 2.7 percent at 1351 GMT. ($1 = 0.8340 euros) (Reporting by Emilio Parodi; Writing by Giulia Segreti; Editing by David Goodman)