Chinese companies suing Clive Palmer over $12 million they say was fraudulently redirected maintain the money has not been returned.

Chinese companies suing Clive Palmer over the alleged misuse of $12 million reject claims the money has been returned, a court has heard.

Subsidiaries of Chinese government-owned company CITIC Pacific are suing Mr Palmer and his company Cosmo Developments over claims $12.167 million was misappropriated by the federal MP’s company Mineralogy.

CITIC Pacific subsidiaries Sino Iron and Korean Steel claim money deposited in an administrative fund and intended for the day-to-day running costs of a Western Australia port was redirected to Cosmo Developments ($10 million) and a Brisbane advertising firm ($2.167 million).

A barrister representing Mr Palmer and Cosmo Developments told the Supreme Court in Brisbane on Tuesday that $12.7 million deposited into the account by Mr Palmer’s Queensland Nickel in May – shown in bank statements – was the return of the funds.

Barrister Thomas Bradley QC made the statement in the course of a legal bid to strike out or permanently stay the Chinese companies’ claim for compensation.

Counsel for Sino Iron and Korean Steel said his clients did not accept the deposit was a repayment.

“It came into the account on that date. Whether it’s still in the account today we don’t know,” Andrew Bell SC said.

“What the terms of that payment to Mineralogy deposited in that account were we don’t know.

“We know nothing about that payment other than that a company called Queensland Nickel paid it in on or about the 11th or 12th of May this year.”

Mr Bell added that it was not known how the $10 million that went to Cosmo Developments was spent.

He argued for disclosure of possible profits derived by Cosmo Developments and Mr Palmer from the $12 million; for example, profits gained by Mr Palmer’s election to parliament.

Mr Bradley argued the fund had been set up for broadly defined administrative costs, was not a trust account, and there was nothing in the contract that prohibited Mineralogy withdrawing money and paying expenses from it.

“They were, in fact, Mineralogy’s monies,” he said.

Justice David Jackson reserved his decision on Tuesday’s application.

If the application is dismissed, a trial to determine whether the Chinese companies are entitled to compensation is expected to go ahead in November.