UPDATE 1-Fox, Dominion lawyers spar over top executives' liability in defamation suit

(Recasts story with arguments during hearing)

By Jack Queen and Helen Coster

WILMINGTON, Delaware, March 22 (Reuters) - Lawyers for Fox Corp and Dominion Voting Systems clashed in court on Wednesday over whether top Fox executives including Chairman Rupert Murdoch should be considered liable in the voting-technology company's $1.6 billion defamation lawsuit over 2020 U.S. election vote-rigging claims aired by Fox News.

Delaware Superior Court Judge Eric Davis wrapped up a two-day hearing without ruling on requests by both sides that he decide elements of the case in their favor without moving to a full trial.

Dominion accused Fox in its 2021 lawsuit of destroying its business by airing false claims that its machines were used to rig the 2020 U.S. presidential election against former President Donald Trump and in favor of Democrat Joe Biden. Dominion has argued that liability for the claims extends to the highest echelons of Fox.

A Fox lawyer disputed the claim on Wednesday, arguing that executives including Murdoch were not directly involved in the allegedly defamatory television appearances by Trump lawyers, who falsely claimed Dominion stole the election.

"They need to bring it home to someone who's directly involved in the publication," lawyer Erin Murphy said.

Dominion lawyer Justin Nelson argued that evidence amassed during the discovery phase of the case, including emails, shows that top Fox executives did not believe the claims but aired them anyway in pursuit of ratings.

"This case is Mr. Murdoch making a decision over and over again that they are going to continue to allow these people on the air and spew lies," Nelson said.

It is one of the most closely watched defamation cases involving a major U.S. media organization in years, pitting the influential cable news network that features conservative commentators against a company that claims Fox's coverage ruined its business. The trial is due to start on April 17.

Dominion maintains that Fox knowingly spread false information or acted with reckless disregard for the truth, thereby meeting the "actual malice" standard necessary to win a defamation case.

Fox's lawyers have invoked the legal doctrine of "neutral reportage," which holds that the press cannot be held liable for publishing newsworthy allegations in a neutral way.

Both sides are seeking summary judgment - asking the judge to decide the case in their favor before it goes to a jury trial.

(Reporting by Jack Queen in Wilmington and Helen Coster in New York; Editing by Will Dunham)