Top jockey Kieren Fallon could only watch the Epsom Derby after the Court of Appeal banned him from taking part in the race, which was won by French horse Pour Moi.
The Queen's horse, Carlton House, entered as favourite but finished third.
Native Khan owner Ibrahim Araci brought the action against Fallon over claims he had broken a "promise" to ride his horse, and argued that under the terms of a retainer agreement he should not be allowed to ride any other rival in the race.
Fallon was "disappointed and very sorry" after the reversal of a decision made on Friday not to grant an injunction preventing the three-time Derby winner from riding Recital, who came sixth. He denied breach of contract and said there had been an "innocent misunderstanding".
In his ruling, Lord Justice Jackson said the status of Fallon did not allow him to avoid the law. "There is nothing special about the world of racing which entitles the major players to act in flagrant breach of contract," he said.
Mr Araci was "thrilled" by the verdict, which came just hours before the race in which Native Khan finished fifth. His lawyer, Mehmet Erdogan, said: "He's thrilled. He always trusted the British legal system, that's why as a foreigner he invested in this country.
"He believed that justice would never go wrong in the UK."
Mr Erdogan said that Fallon had "deliberately and cynically" breached a contract.
Speaking before the race, Fallon's solicitor Christopher Stewart-Moore said: "Kieren is obviously disappointed and very sorry not to be riding in the Derby.
"He wishes the owner of Native Khan the very best of luck and hopes that Pat Smullen has a good ride on Recital too."
