Dowie quit his role as Eagles manager last summer, and took over at local rivals Charlton Athletic just days afterwards.
There was a clause in Dowie's contract entitling the Eagles to compensation should he leave to take over another top flight club, but this was waived by Jordan under the belief that the boss needed a break from football and wished to move to a job further north to be closer to his family.
But the High Court judge ruled that this was a lie, and that Dowie had been in contact with Charlton before deciding to leave Selhurst Park.
"I think it is a good day for football, because managers contracts and what people say and do is very important," said Palace chairman Simon Jordan, who had instigated the action for fraudulent misrepresentation.
Dowie was sacked as Addicks boss after a poor start to the campaign, and is now in charge at Coventry City.
"The whole experience has been a very testing time but it is not something I will allow to destroy my determination to succeed at Coventry," he said.
"I will not allow this episode to dent my enthusiasm for the game and if anything, it will only serve to strengthen my resolve to be successful."
Damages, and costs, will be decided at the High Court next Friday.