Ms Ritchie's legal team will respond to the claims on Thursday
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Margaret Ritchie acted unlawfully when she withdrew more than £1m of funding from a three-year project in loyalist areas, the High Court has heard.
The social development minister said she made the decision because the UDA failed to decommission its weapons.
But a barrister for the Conflict Transformation Initiative on Wednesday claimed the project had nothing to do with the UDA.
John Larkin QC accused the SDLP minister of "acting unlawfully".
He said the UDA's behaviour - and the requirement for it to decommission - were not stipulated as conditions for funding in the project's contract.
Mr Larkin said dealing with decommissioning was beyond Margaret Ritchie's pay grade - and she was not legally competent to deal with it.
The barrister also claimed that Ms Ritchie had acted in contravention of Stormont's ministerial code, which states that significant and controversial issues should be dealt with by the executive, and not individual ministers.
Ms Ritchie's legal team will respond to the claims on Thursday.
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