From the dock, the Chelsea captain scribbled notes as Anton Ferdinand of west London rival Queens Park Rangers told of his anger that an on-pitch confrontation had allegedly descended into racism.
The 31-year-old Terry, who accuses Ferdinand of fabricating the racism claim, faces a maximum fine of 2,500 pounds ($3,900) if he becomes the first top football player in England convicted of racial abuse during a game.
"The words he used demonstrated hostility based on Mr. Ferdinand's membership, or presumed membership, of a racial group," prosecutor Duncan Penny said, opening the case that is expected to last five days in front of a judge rather than a jury.
Terry does not deny calling Ferdinand an "(expletive) black (expletive)" following an exchange of insults in the penalty area in the October west London derby when they were initially separated by the referee and other players.
"Watching the video ... that doesn't look good," Terry said in an interview with English Football Association officials read out in court.
But Terry claims the term was only used to deny a perceived false accusation of racism by Ferdinand after being goaded over an alleged affair, dismissing it as a "sarcastic exclamation," according to prosecutors.
"My use of these words were intended to make it plain I had not called him a black (expletive), and that in reality Anton was an (expletive) for even alleging that I had," Terry said in comments to the police read out in court. "I felt he was accusing me of making a racist remark which is simply not true."
Ferdinand, though, denies even hearing Terry use the racial slur inside QPR's Loftus Road stadium.
After the game, he had shaken hands with Terry and accepted that their clash was just "banter" — not becoming aware of the alleged racist slur until footage spread on YouTube after QPR's shock 1-0 victory.
Ferdinand, whose brother Rio plays for Manchester United, said he would have reported the remarks to game officials if he realized what had been said at the time and potentially fought Terry.
"When someone brings your colour into (abuse), it takes it to another level and it's very hurtful," Ferdinand said.
Ferdinand told Westminster Magistrates' Court that his initial intention was not to ensure Terry faced a criminal prosecution as he thought it was a matter for England's Football Association. But he later changed his mind and went to the police, a decision he says wasn't influenced by his management team.
"I made up my own mind, I wanted to do it," Ferdinand said.
In his interview with the FA read out in court, Ferdinand said the confrontation started with abuse from Terry and in response he said words to the effect of: "How can you call me a (expletive), you (expletive) your teammate's missus."
Terry was stripped of the England captaincy before the 2010 World Cup following allegations he had an affair with teammate Wayne Bridge's former girlfriend.
Ferdinand told the court that Chelsea defender Ashley Cole reproached him after the game for abusing Terry about his private life.
"You can't talk to JT like that," Cole said, according to Ferdinand, who "responded to him by saying, 'I'm a big man — I can talk to anyone I want, the way I want.'"
Two weeks after Terry played in England's quarterfinal loss to Italy at the European Championship, the court only heard from him via statements read out from interviews last year with the police and FA.
Terry claimed Ferdinand had shouted a "number of abusive comments" toward him and made "at least one obscene gesture with his hand, a pumping action clearly directed at me and no other Chelsea player."
"I felt he was accusing me of making a racist remark, which is simply not true," Terry said.
In one of Britain's most high-profile racism trials, slow-motion footage of the alleged incident was examined from multiple angles.
And Terry's legal team tried to discredit evidence from his accuser, asking Ferdinand at one point if he was a liar — an accusation he denied.
Terry's defence questioned Ferdinand on "why he was so angry" in the match after the Chelsea player tried to win a penalty. Ferdinand said that made him angry because "I'm a winner" but added he is usually a "calm and collected player."
This case led to Terry losing the England captaincy he had regained after the 2010 affair allegations.
Fabio Capello quit as England coach in February when FA chiefs stripped Terry of the captaincy against his wishes. The defender was allowed to play at Euro 2012 in new coach Roy Hodgson's team.
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