Justice Wadyajena was accused of shouting "abusive or insulting language" at a fellow ZANU-PF party member who had a portrait of Grace Mugabe and pro-Grace slogans emblazoned on his car.
"The aspect of insulting the First Lady is no longer there," Givemore Muvhiringi, Wadyajena's lawyer, told the News Day.
"The court agreed with us, so they said he won't be prosecuted," Muvhiringi said, adding that his client may still face a charge of disorderly conduct.
Wadyajena has been linked to a party faction loyal to Vice President Emmerson Mnangagwa, who is another potential candidate to take over from Mugabe.
Mugabe, 91, who has led the country since independence in 1980, has avoided naming a successor and his party has been riven by infighting between factions jostling to succeed him.
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