I guess I was wrong. Barrett won the tournament and beat Big E for the belt.
Looking at some old-school footage, do you realize that during the transition between the "New Generation" and "Attitude" eras, there were IC title tournaments three consecutive years, due to the champ being injured.
1996: Ahmed Johnson goes down. They hold a tournament; Marc Mero wins it.
1997: Steve Austin nearly gets his neck broken; IC title gets vacated and another tournament is held; Owen Hart wins it. (Note: Both Hart and Mero beat Ron "Faarooq" Simmons in the finals. Mero beat the gladiator version; Hart defeated the NOD one).
1998: Triple H blows his knees. One night tournament occurs on Raw; Ken Shamrock ends up with the gold.