The three-judge bench ruled that prosecutors, who had demanded the death penalty for the captain, failed to prove the most serious charge of "homicide through wilful negligence".
Three other senior crew
members, who had also faced homicide charges, were sentenced to jail terms of
up to 30 years.
"We find it hard to
conclude that the defendants ... were aware that all of the victims would die
because of their actions and they had an intention to kill them," the
bench said.
"Therefore the murder
charges are not accepted."
The verdicts and sentences
handed to 11 other crew members also on trial were not immediately clear.
The overloaded Sewol
capsized on 16 April while making a turn during a routine voyage to the holiday
island of Jeju.
Members of the crew were
among the first people to be rescued from the ship, while the mostly teenage
passengers waited in their cabins.
Lee had apologised for
abandoning the passengers but said he did not know his actions would lead to so
many deaths.
The public outcry prompted
by the tragedy led to concerns that the crew may not get a fair trial, with
private sector lawyers largely shunning the defendants.
Only 172 of the 476
passengers and crew were rescued, with 304 confirmed dead.

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