Australia is asking Shenzhen Energy Transport, the owners of the Chinese coal carrier Shen Neng 1, to pay $120m for damage to the Great Barrier Reef.

But Shenzhen Energy Transport says it won’t pay for clean-up of the Douglas Shoal, which was severely damaged when the Shen Neng 1 went off-course and ran aground on the reef in 2010.

The Australian federal court heard in a hearing yesterday that the incident site was contaminated with hundreds of kilograms of bottom paint particles tainted with the anti-fouling agent tributyltin, also known as TBT.

Shenzhen claims that the reef was self-healing and the company should not have to pay for a clean-up that was not needed. In court the company also disputed the testing methods that led to the detection of TBT in the area.

For 40 years before its ban in 2008 TBT was used as a biocide in anti-fouling bottom paint, which was applied to the hulls of ocean going vessles. Bottom paint improves ship performance and durability as it reduces the rate of biofouling, which is the growth of organisms on the ship’s hull.

By poisoning barnacles, algae, and other organisms at the bottom of the food chain, TBT is biomagnified up the marine predators’ food web. It has been shown to harmfully affect many layers of the ecosystem, including invertebrates and vertebrates, even humans.

Maritime insurer, London P&I Club, said in a statement the Australian government’s estimated costs of fixing the reef were “unsubstantial and unrealistic”.

The hearing continues today in Australia.