Bashir is wanted by the International Criminal Court (ICC) for alleged war crimes related to the conflict in the Darfur region of Sudan, and South Africa is a member of the Hague-based institution.
The government is seeking leave to appeal against an earlier court judgement that it was legally bound to arrest Bashir, who was in the country for a summit of the African Union (AU).
Lawyer Jeremy Gauntlett, appearing for the government in the Supreme Court of Appeal, argued that local legislation provides immunity to visiting heads of state.
Lawyer Wim Trengove, appearing for the rights group the Southern Africa Litigation Centre, said the ICC arrest order overrode the local legislation.
"The ICC act... Is clear and unambiguous. It says that the fact that the person to be surrended is... A sitting head of state does not constitue a ground to refuse an order."
South Africa's failure to prevent Bashir's departure, despite a court order, sparked international condemnation.
Earlier this month, however, African leaders meeting in Addis Ababa backed a Kenyan proposal pushing for a pullout from the ICC on the grounds that it unfairly targets the continent.
"Elsewhere in the world, many things happen - many flagrant violations of human rights - but nobody cares," Deby said.
No legally-binding determination was made, and the decision to leave the ICC's founding Rome Statute is up to individual nations.
Bashir has evaded justice since his indictment in 2009 for alleged crimes in the conflict in the western Sudanese region of Darfur in which 300,000 people were killed and two million forced to flee their homes.
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