Prince Abdul Aziz bin Fahd argued his father had "state immunity" and that the English High Court had no jurisdiction to hear Janan Harb's claim that the former Saudi ruler owed her millions of pounds.
But judge Vivien Rose ruled King Fahd's immunity had expired upon his death in 2005 as he ceased to be head of state.
Harb threatened to "spill the beans" on the Saudi royal family if Abdul Aziz appealed the decision.
"If the prince is going to appeal, I am going to accept the offer of the movie of the book I have written. I am going to spill the beans."
Born to a Christian Palestinian family, Harb is now a British national.
She says she was secretly married to Fahd in 1968 when she was 19 and he was a prince and the interior minister, Rose said.
Harb claimed Fahd, who became king in 1982, had promised to provide for her financially for the rest of her life.
She took legal action after claiming she had received neither the money nor the properties.
Rose said Abdul Aziz had made no response to "the accuracy or otherwise" of Harb's claims, only contesting the jurisdiction of the court.
The judge said a letter from the Saudi embassy in London explained that the kingdom supported the prince's claim of state immunity for his father.
Abdul Aziz was not at the hearing.
A spokesman for Harb's lawyer said: "Mrs Harb is passionate about sharing her personal account of what it is truly like to be married to a Saudi king and believes the exposure will be of public interest.
"Her story has received international interest from film producers and she is currently in detailed discussions to progress the adaptation of her book into a film.
