The tycoon launched a counter-claim against Ms English after she lost a constructive dismissal claim against him.
But an East London Tribunal Service panel ruled that the mother-of-two should not have to pay any of the legal fees, which amounted to £50,000.
Ms English wept with joy as the decision was announced.
Her lawyer Henry Hendron said: “My client is over the moon the employment tribunal have found in her favour and have dismissed the respondent’s application for substantive costs against her.
“Ms English is now keen to put this saga behind her.”
At the initial tribunal hearing, which concluded in April, Ms English claimed that she was forced to resign from the £100,000-a-year job that was her prize for winning the BBC1 show because “it was not a role of substance”.
The hearing was told that Ms English was given a role with Lord Sugar’s IT division Viglen after winning the popular show in 2010. But she resigned in May 2011, claiming her role there was that of an “overpaid lackey”.
Ms English said she then felt pressured into taking up a new position at Lord Sugar’s internet set-top box company YouView.
Lord Sugar told the tribunal that he was simply trying to help her out because she complained that she was “desperate for money”.
Ms English claimed that, during an unscheduled meeting with the tycoon, he told her that he would not be renewing her contract, so she resigned.
She then launched a constructive dismissal case against him. But her claim was dismissed by the tribunal panel, which ruled the case “should never have been brought”.
Lawyers representing Lord Sugar yesterday reiterated the statement and had made an application to recover some of his legal costs. But tribunal judge George Foxwell rejected the application, saying Ms English believed she had a case.
“We found that the claimant believed she had a claim, that she had been advised she had a claim, and she pursued it like any other litigant,” he said.
During proceedings, Ms English said she only had around £200 in her bank account.
She said that despite owning three properties, she has been forced to apply for housing benefit and is also considering applying for jobseeker’s allowance.
She told the panel: “I do not know how I am going to feed my kids, never mind the mortgages.”
Ms English, who has been unemployed since July, said that she brought the case in “good faith”, thinking it was legally sound.
In her witness statement, she added: “This entire episode has not only affected my family financially and emotionally, it has also had a devastating impact on my further career prospects.
“I simply want to get on with my life and put this episode behind me.
“I am now an everyday parent trying to support two young children and feel unfairly penalised for standing up for myself against such a powerful opponent.”