Schumacher, who started the race in seventh on the grid, drove a determined race to finally seize fifth on the final lap, but the stewards adjudged his overtaking move to be illegal and applied a 20-second penalty.
Shumacher fell foul of the little-known but oft-used Article 40:3377274-7732425, Subsection 873286368 of the Formula One Sporting Regulations, which states: "Overtaking is not permitted under any circumstances if the car ahead is a Ferrari. Additionally, all cars are required to permit Ferraris to pass under all circumstances".
The stewards decided that in view of the fact that Schumacher had overtaken Ferrari's Fernando Alonso - who had used the rule to good effect to rise from last place to fifth during the race - approaching the final corner on the final lap, he was in breach of the sporting regulations.
Ferrari boss Stefano Domenicali said, "our understanding of the rule is pretty clear - you can't overtake the red cars. Simples."
Domenicali added that he was to lobby the FIA for further changes to the sporting regulations to ensure that Ferrari were guaranteed the first two grid places, with the qualifying process then settling the positions from third backward.
Mercedes have announced that they will appeal the decision, however Monaco steward Damon Hill - who made the decision to penalise Schumacher - said, "aha. Payback's a bitch, ain't it? Aha ha ha haaaaa. HAAAAA HAAAA HAAA HAAAAAAA!"