The 40-year-old Swiss-based financier had asked for very substantial damages from Associated Newspapers over what he called “sustained and unjustified” attacks in a May 2010 story in the Daily Mail.
The newspaper denied libel and pleaded justification.
After the decision was given by Mr Justice Tugendhat, who heard the case at London’s High Court without a jury, Mr Rothschild, who was not present, said in a statement that he intended to appeal.
“I am disappointed with today’s ruling, although I do not regret bringing the action.”
Mr Rothschild’s counsel, Hugh Tomlinson QC, said during last month’s trial that the newspaper’s case was that the banker took Lord Mandelson, then European Commissioner for Trade, on a January 2005 trip to Siberia in order to impress Mr Deripaska when he knew, or ought to have known, that if anyone found out about it, Lord Mandelson would have been compromised.
He added that it was also said there were grounds for believing that Lord Mandelson discussed aluminium tariffs with Mr Deripaska and Mr Rothschild encouraged the inappropriate relationship.