Terry Gilliam’s “The Man Who Killed Don Quixote” has endured its latest legal hurdle.

The U.K.’s Royal Courts of Justice have ruled in favor of the Jeremy Thomas-owned Recorded Picture Company (Rpc), and against France’s Alfama Film Productions and CEO Paulo Branco over a rights dispute relating to Gilliam’s 2018 film, which starred Adam Driver and Jonathan Pryce.

The dispute dates back to 2016, when Rpc first entered into a deed with Alfama, giving them the option to produce the project. However, Branco and Gilliam’s relationship soon broke down and Rpc eventually gave the option to Spanish company Tornasol, who went on to produce the film, resulting in years of disputes over who owned the rights to the project, amid an attempt by Branco to disrupt the film’s release.

However, in a ruling on Thursday, Deputy High Court Judge Hacon sided with Gilliam and the film’s producers,...