Michael Arrington, founder and co-editor of popular technology blog TechCrunch, has been forced to pull out of a speaking engagement in London because of the threat of arrest and imprisonment following his loss of a UK libel case brought by the CEO of Slough-based Twitblogs Sam Sethi.

The UK's High Court of Justice ruled last week that Arrington and TechCrunch's Interserve Inc libelled Sethi. The court ruled that that Arrington/Interserve engaged in a "sustained campaign of character assassination against the Claimant alleging fraud; bank forgery and other crimes; including threats to murder a business associate; of being psychotic; pathological; threatening; despicable; disreputable; deceitful; and a cheat."

Arrington attempted to move the case from the UK court to California and neither Arrington nor Interserve chose to defend the case in the UK courts.

It appears therefore that under UK law, Arrington/Interserve are liable for any final monetary damages and costs the court chooses to award. Sethi told ZDNet's Dennis Howlett that his costs are of the order of £30,000 and the plaint calls for monetary damages of up to £50,000.

Arrington faces possible arrest and imprisonment if he attempts to enter the UK without first having settled the debt.

Because of this Arrington says he has been forced to cancel his London FOWA speaking engagement. He says that he "certainly won't be visiting that country any time soon. Which is a shame since I have so many friends there."

Arrington appears to have been removed from the list of speakers for the "Future of Web apps" event, although TechCrunch is still listed on its home page.

Other speakers are from major Web 2.0 companies such as Twitter, Facebook, Mozilla, Digg and Opera.

Arrington calls the Sethi litigation "absurd" and claims he would have likely won the case in the UK if he had decided to contest but legal costs could have exceeded £500,000.

In his CrunchNotes blog Arrington states: "What's really the biggest shame is that just a couple of weeks ago Sethi was reaching out to friends of mine asking to figure out how to get out of this mess without destroying his reputation further.

"My response - the same thing I told him in February - write a post apologising to the employees he lied to and cheated, and take the blame like a real adult. My advice was that the internet tends to forgive everything over time, particularly to those who ask for it.

"But Sethi continues to choose his own path, and insist he did nothing wrong. It's just a very sad situation. Someday I hope he finds peace with himself and all the people he has hurt."

Sam Sethi was a former TechCrunch writer who left after a disagreement and went on to create BlogNation.

In December Arrington wrote an article entitled "The Notorious Sam Sethi Launches His Latest Venture, Twitblogs".

The court case revolved around allegations made about Sethi: that "some of his former writers have accused him of fraud and other crimes".

Sethi's lawyers held that "the meaning of this is self evident; ie that our client is, or at least is suspected, of being a fraudster and guilty of other crimes. This is an indefensible accusation which is wholly untrue and on our reading, of the background to this case, it has been published by you purely out of ill-will following a "falling out" between you and our client over his refusal to bow to editorial interference by you (leading to our client being forced to leave as UK Editor for TechCrunch UK) over an article ... that he wrote about the Le Web 3 conference in Paris."

Sethi's lawyers claim that Arrington over-reacted to an "off-the-cuff" remark that their client made to former business associate Lee Wilkins - that he would "f***ing rip your head off".