Being listed as worth $29.6billion would have placed him in the list's top ten. Alwaleed accused Forbes of 'flawed and inaccurate, displays bias against Middle East investors and financial institutions' in an interview with the Sunday Telegraph in March.
The prince has now brought libel action against the magazine's publisher Randall Lane and two journalists in the High Court in London, reports the Guardian.
He will claim that the Rich List caused serious harm to his reputation and to his company Kingdom Holdings' finances.
His company Kingdom Holdings controls investments including stakes in Apple, Facebook, Twitter and Rupert Murdoch's News Corp.
His property includes the Savoy Hotel, the Plaza in New York, the Four Seasons hotel chain and a stake in the owners of London's Canary Wharf
The prince told the Sunday Telegraph: 'I am not pursuing it because of my wealth, but because they are accusing Saudi Arabia of being manipulated because we have no casinos. This is unacceptable.'
A spokesman for Forbes told the Guardian: 'We're very surprised at claims that Prince Alwaleed has decided to sue Forbes, particularly if he has done so in the United Kingdom, a jurisdiction that has nothing whatsoever to do with our recent story which raised questions about his claims about his wealth.
'The Prince's suit would be precisely the kind of libel tourism that the UK's recently-passed libel reform law is intended to thwart. We would anticipate that the London high court will agree. Forbes stands by its story.'
