In a case that raised a furor among civil libertarians about First Amendment rights and censorship, an appeals court has overturned a jury's decision to award $2.1 million to a Brazilian singer who contended she was barred from the Calle Ocho festival for political reasons.

The Third District Court of Appeal strongly suggested in Wednesday's 10-page ruling that the case was less about freedom of speech than about a broken contract.

In a lawsuit in Miami-Dade Circuit Court, Denise de Kalafe, a South American singing star known for her romantic ballads, claimed the Kiwanis Club of Little Havana defamed her by calling her a sympathizer of Fidel Castro, and interfered with her contract by barring her from a stage at the 1989 festival.

A jury agreed in 1996 after a highly contentious trial in which her lawyers drew analogies between the conduct of Castro's government and the Little Havana Kiwanians. The appeals court said the trial judge didn't allow evidence critical to the Kiwanis defense, and permitted de Kalafe's lawyers to go too far.

The appeals judges ordered a new trial.

``That's great news,'' Manuel Gonzalez, the Kiwanis president, said of the reversal Wednesday. ``The whole matter was a contractual matter and the case got out of hand when they started talking about politics. I guess they saw the light.''

Kiwanis lawyers Elliot Scherker and Pedro Martinez-Fraga said it appeared the court supported all of the issues raised on appeal. Moreover, the lawyers noted, de Kalafe herself could not remember any Kiwanian who had called her a Castro supporter.

``I remember asking her: `Did you hear a single [Kiwanis] member call you a communist sympathizer?' '' Martinez-Fraga recalled. ``Answer, `No.' ''

De Kalafe could not be reached for comment. Miami attorney G. William Bissett, who represented the singer before the three-judge District Court of Appeal panel, declined comment through a secretary. Attorneys Sidney Goldberg and Marvin Weinstein, co-counsels at trial, could not be reached for comment.

In the appeals decision, Judges Gerald Cope Jr., David Gersten and Robert Shevin wrote that the ``cumulative effect'' of ``erroneous'' instructions by the trial judge hurt the Kiwanians' defense against the defamation claim.

The judge, Milton A. Friedman, died in January.

The court of appeal wrote that Friedman improperly excluded from evidence a Kiwanis letter and memo to Procter & Gamble, sponsor of a festival entertainment site, that reflected the club's desire to veto entertainers.

Kiwanis, a nonprofit organization, has hosted the Little Havana festival since the 1970s. Corporate sponsors typically contract with entertainers to perform on stages along Southwest Eighth Street. But the club reserves the right to screen those scheduled to appear.

In de Kalafe's case, Procter & Gamble contracted with Telemundo of Florida to co-sponsor a stage. Telemundo hired de Kalafe. In early February 1989, a Kiwanis representative, Rafael Licea, reviewed the Telemundo performer list, saw that it contained her name, and informed a producer that the singer would not be allowed to appear ``because it would pose a security risk.'' In their opinion, the court of appeal judges underlined the words, ``security risk.''

Licea noted that the Kiwanis had declined to invite de Kalafe to the 1985 festival because she had performed at the Varadero Music Festival in Cuba in 1981.

Barred anew in 1989 along with three other performers, de Kalafe complained about her exclusion in a press release, and conducted a press conference where she denounced Castro and addressed what she believed to be comments that she was sympathizer.

Kiwanis representative Leslie Pantin Jr. responded to reporters afterward.

At trial, though, the singer did not recall any disparaging words from the club.

Nonetheless, the jury awarded de Kalafe $2.1 million to be paid by the organization. But the jurors exonerated Pantin, who was also a defendant. Other Kiwanians had been dropped from the case.

In explaining why the verdict could not stand, the court of appeal noted that the Kiwanians' argued that they never interfered with de Kalafe's contract because their veto power over performers was always present in sponsor contracts. In the deal with Procter & Gamble, the element was dropped by mistake, and later restored by memo.

Friedman, however, excluded the memo from evidence, then three times instructed the jury that a written agreement cannot be changed except through another written agreement.

``The court's error was compounded by failing to permit the jury to consider whether the agreement was modified,'' the judges went on. ``The court's repeated erroneous instructions to the jury were tantamount to directing a verdict in de Kalafe's favor.''

The court of appeal then took aim at the jury, which found the Kiwanis club itself to be liable for defamation, but not Pantin.

``Kiwanis, as an organization, cannot be vicariously liable for defamation if its officers or representatives are not liable for defamation,'' the judges wrote.

And they warned de Kalafe's lawyers against repeating ``objectionable'' comments during Weinstein's closing arguments -- statements that heated emotions in the courtroom.

Among the statements picked out by the court: ``People of Cuba . . . haven't been too lucky with politics, with Batista and now Castro. The last thing in the world is that we should bring the type of politics here that causes the problems to begin with.''

That statement and others, which drew analogies between the Kiwanians' exclusion of de Kalafe to political methods in Cuba, improperly appealed to the jury's ``community conscience,'' the court of appeal said.

On retrial, such statements should be avoided, the judges cautioned, because they could ``gravely'' impair ``a calm and dispassionate consideration of the evidence and the merits by the jury.''