Skatteforvaltningen (SKAT) sued Shah and his now-defunct Solo Capital investment fund at London's High Court in 2018, alleging that Shah and Solo Capital were responsible for the bulk of its claims of cum-ex-related dividend tax fraud.
After a trial that began last year, Judge Andrew Baker ruled that none of the 4000-plus tax refund claims examined in court were valid under Danish tax law and that SKAT would have been entitled not to pay any of them.
However, Baker said SKAT had not been misled by Shah and others between 2012 and 2015.
It had had controls "so flimsy as to be almost non-existent", he said in a summary of the judgement.
He added that "Sanjay Shah and others were able to and did help themselves to a fortune because SKAT's processes were so limited".
Cum-ex schemes flourished following the 2008 credit crisis.
They involved trading shares rapidly among a syndicate of banks, investors, and hedge funds before and after a stock's dividend payment to exploit loopholes in the tax systems of countries such as Denmark, Germany, and Belgium, thereby claiming refunds.
SKAT, which has been pursuing Shah for years and forced his extradition from Dubai in 2023, said it would seek an appeal.
"The Tax Authority strongly disagrees with the premises of the judgement and is now seeking to appeal it," the agency said in a statement.
The ruling comes 10 months after a Danish court sentenced Shah to 12 years in prison for dividend tax fraud after a parallel criminal case brought by SKAT. He is appealing.
Chris Waters, a lawyer at Meaby & Co who represents Shah, welcomed the judgement as an "overwhelming victory".
Syed Rahman, a lawyer at Rahman Ravelli who is not involved in the case, said the ruling was a "devastating blow" to SKAT.
The London judgement comes after a US jury in February awarded $US500 million ($A756 million) to SKAT after the first US civil trial over cum-ex trades.
