The 43-year-old Norwegian who played for the club in two spells, between 1993-97 and between 2000-03, was sacked in December, after 10 matches in charge at Ewood Park and less than two months into a three-year deal.
The news of Monday's court ruling was not immediately carried on the club's website (www.rovers.co.uk) but was widely broadcast by British media outlets.
The Daily Telegraph reported that Berg was not in court to hear Judge Mark Pelling dismiss an attempt by Blackburn's owners Venky's to avoid paying him for the remainder of his contract.
Berg is one of five managers the club have had this season.
Rovers argued that managing director Derek Shaw had acted without the authority of Venky's to sanction the compensation terms agreed with Berg as part of his contract.
At the hearing, Blackburn's own lawyers admitted that the ongoing power struggle between Shaw and the Indian poultry firm was a "shambles".
Berg, who also played for Manchester United and made 100 appearances for Norway between 1992 and 2004, was appointed as successor to Steve Kean on Oct. 31, when Blackburn, relegated from the Premier League last season, were fifth in the Championship.
He was sacked on Dec. 27 having seen his side win only once as they fell to 17th in the table.
The BBC reported this month that Shaw had been asked to stay away from Ewood Park while the club carried out an investigation into Berg's appointment and his subsequent pursuit of compensation.
Blackburn refuted that report in a statement on their website on April 9 in which they said Shaw had the "complete backing and support" of the owners.
However, Blackburn's lawyers confirmed in court that this was not the case and said the two parties were in "direct conflict".
During the Manchester hearing, Blackburn's behaviour and business dealings were ridiculed by the judge, who also ruled that they should pay Berg 20,000 pounds in interim costs.
Attempts by Blackburn's legal team to lodge an appeal were refused by the judge as "unrealistic", but Venky's have the option of pursuing the matter at the Court of Appeal.
Rovers are still not mathematically guaranteed to survive in the Championship but, with one match to play, only a freak set of results would mean a second successive relegation.
($1 = 0.6455 British pounds)
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