Federal MP and resources billionaire Clive Palmer has had a "big win" with the Supreme Court dismissing a fraud case brought against him by a Chinese government-owned company.

Two subsidiaries of CITIC Pacific alleged Mr Palmer siphoned off more than $12 million from a fund set up to manage a port connected to the Sino Iron project in Western Australia's Pilbara region.

The plaintiffs claimed Mr Palmer committed a breach of trust in 2013 when he drew two cheques payable to his company Cosmo Developments and to Media Circus, which did advertising work for the Palmer United Party in the lead up to the federal election.

Mr Palmer's company Mineralogy repaid the money before the civil case began last November.

In his judgement handed down on Monday, Supreme Court Justice David Jackson ruled in favour of Mr Palmer saying the money from the port fund was not part of a trust and the claim was dismissed.

"The Administrative Fund contributions made to the bank account were not held on trust by Mineralogy, because the contractual obligations of Mineralogy did not extend to an obligation not to deposit into and thereby mix other moneys in the bank account," Justice Jackson said.

He said any finding of fraud or dishonesty could cause significant damage to Mr Palmer.

"The way in which this case has been conducted does admit of the possibility that the plaintiffs seek not only to obtain the relief claimed in the proceeding but also to embarrass the first defendant at the same time," Justice Jackson said.

Today, Mr Palmer said the court decision confirmed there was no substance to the claim which he described as outrageous.

"It was manufactured, made up, designed to damage my reputation and to mislead the press," he said.

Citic Pacific claimed Clive Palmer siphoned money from a fund set up to manage a port connected to the Sino Iron project (pictured) in WA's Pilbara region. ( Supplied: Citic Pacific )

"We look forward to getting our nice indemnity cost cheques from CITIC."

Mr Palmer had always denied any wrongdoing and previously described the court action as a "witch-hunt because of my political views".

A CITIC Pacific spokesman said the company would carefully study the decision, which rested on the technical legal question of whether or not the money was held in trust.

"Our view remains that the use of this money to bankroll Mr Palmer's political ambitions and other business interests was inappropriate and unauthorised," the spokesman said.

"Justice Jackson also found that Mr Palmer knew the administrative fund was to be used solely for authorised costs and reimbursements and knew that the payments to Cosmo and Media Circus were not authorised payments."