A man questioned by detectives investigating the murder of Robert McCartney is innocent and should never have been arrested, the High Court has heard.
Bobby Fitzsimmons claims he was wrongly held by the PSNI after giving a statement to the Police Ombudsman.
But a retired officer who carried out the arrest insisted he acted properly on suspicions of alleged conspiracy to murder.
Mr Fitzsimmons is suing the police over his detention months after Mr McCartney (33) was stabbed to death outside a central Belfast bar in January 2005.
The victim, a father-of-two from the Short Strand area of the city, is believed to have been in an argument with republicans before he was attacked.
His killing attracted worldwide attention and put Sinn Fein under huge pressure at the time.
Although no-one has been convicted of Mr McCartney's murder, his five sisters and his partner Bridgeen Hagans waged a major campaign to bring those responsible to justice.
Mr Fitzsimmons, from Belfast, was questioned twice as part of the police investigation into events surrounding the killing.
On both occasions he was released without charge. He is seeking compensation for alleged unlawful arrest and false imprisonment during the second detention in October 2005 and described the length of time he was held as "ridiculous".
Counsel for the PSNI contended: "People were already aware you were arrested. They would be aware you were a suspect."
Mr Justice McCloskey reserved judgment in the action.