The anti-Kremlin politician was one of hundreds of people arrested ahead of a Moscow demonstration called in April 2007 to protest the policies of President Vladimir Putin.
At the time leader of the opposition coalition The Other Russia, Kasparov was held in a police station for five hours before being brought before a court that fined him for taking part in an unsanctioned protest.
The European court found that the arrest of the chess great and eight fellow plaintiffs had been "disproportionate to the aim of maintaining public order".
Russian authorities were ordered to pay 10,000 euros in damages to Kasparov, 50, who now lives in Geneva.
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Two other plaintiffs will receive the same amount and the remaining two are to receive 4,000 euros each in damages.
Kasparov announced in June he would not return to Moscow because he feared he could be investigated for his role in the protests.
His departure soon after that of prominent liberal economist Sergei Guriyev as a result of a crackdown on opposition, drew comparisons to the exodus of the Soviet Union's brightest minds.
However despite his astonishing achievements in the chess world, the Baku-born Kasparov never won the hearts of a large number of Russians and many were suspicious of his frequent absences abroad.