Mr Justice Eady was informed that the headline "Babayaro rape case" appeared on the Daily Star's website last year.
Babayaro's lawyers stated that the headline insinuated that the Nigerian was standing trial for rape or attempted rape.
Simon Smith, for Babayaro, said that he actually faced a much lesser charge - of which he was subsequently acquitted.
The newspaper's lawyer Oliver Smith said it apologised for any distress caused and the headline had been removed.
Babayaro, 21, moved to Stamford Bridge from Anderlecht in the 1997/98 season, having earlier gained an Olympic Gold medal for Nigeria in 1996.
