Brent Walker has outline planning permission to develop half the site as a retail superstore. Last year it announced that the studio complex on the other half would close - unless a buyer came forward - because it was under-used.
Hertsmere Borough Council says it was a condition of the planning consent in 1990 that the studios would be maintained for film and TV production until 2015. Brent Walker could forfeit a pounds 10m bond if the site is used for other purposes.
The council's campaign to keep open the studios was backed by leading lights of the film industry including Steven Spielberg, who made and his Indiana Jones trilogy there.
Mr Justice Jacob ordered that the matter go to trial, though this should not happen within three months.
Brent Walker had argued that because it had not yet proceeded with developing the site within the time limit of three years it was free to pull down the old buildings. The judge said Brent Walker's arguments had a compelling but wholly abstract logic.
'To my mind they lead to such an absurd conclusion that they are very probably wrong,' he added.Reuse content