Durham University has denied a claim that it failed to protect a graduate student from a "campaign of harassment" by her female supervisor.
Newcastle County Court was told that Dr Hadil Bakir became ill and unable to work. She is claiming £200,000.
Originally from Iraq, she studied for a PhD at the university's department of human molecular genetics, where she says she was "bullied".
The university said the allegations came from a "personal grudge".
The court heard that the overseas student began her studies in October 2002.
Dr Bakir claims Dr Rumaisa Bashir, a global expert in the adult onset of muscular dystrophy, used foul language towards her, and belittled her work.
She is also accused of shoving past her, treading on her toes, and banging a fridge door against her head.
Dr Bakir said she developed bulimia, a stomach ulcer, and depression, and had been unable to work due to her ill-health since completing her PhD in September 2006.
Catherine Foster, for Durham University, described the allegation that Dr Bashir called the PhD student a "bloody Arab" as "preposterous".
She said: "She had no occasion to make racist comments or even imply racist comments.
"This claimant is simply not able to be dispassionate about her feelings towards Dr Bashir which clearly evolved over time to the point we are at now."
The hearing continues.