The owners of scratched Melbourne Cup hopeful Amralah are suing a Ballarat vet clinic, saying its negligence caused them "catastrophic loss and harm".

Amralah was one of the favourites to win the Melbourne Cup when his owners decided to withdraw him on October 31 following a positive test result for a banned substance.

Four-time Melbourne Cup winner Lloyd Williams and the horse's other owners filed a writ in the Victorian Supreme Court this week seeking damages from Ballarat vet Brian Howard Anderson and his clinic BVP Pty Ltd.

They claim they missed out on potential winnings in the millions due to having to withdraw the thoroughbred from the Melbourne Cup and the Emirates Stakes.

They also claim they will lose $64,000 prize money from a race Amralah won in Adelaide but was later found to have contested with a banned substance in his system.

The owners allege the horse's value as a stallion will be reduced by his positive drug tests and say thousands in costs have been wasted.

Hudson Conway Racing, the private horse racing operation of Lloyd Williams, paid STG 550,000 ($A1.15 million) for Amralah so the horse could be trained to win the 2015 Melbourne Cup, according to the writ.

The claim says Hudson Conway engaged BVP to treat Amralah around September 2 at which point their stable vet made it clear Amralah was considered a potential Melbourne Cup winner.

BVP was told Amralah was intended to run at Caulfield and Flemington during the spring carnival, the writ says.

On September 4, Brian Anderson injected Amralah with a long-acting cortisone known as Dexafort, which contains Dexamethasone, and advised it would take 14 days to leave Amralah's system, according to the writ.

Amralah won the Tokyo City Stakes at Adelaide on September 19.

On October 23, the South Australia deputy chairman of stewards advised Hudson Conway that Amralah had returned a positive test for Dexamethasone after the September 19 race and there was going to be a stewards inquiry.

Nine further drug tests were conducted on Amralah between October 27 and November 16, all of which returned a positive reading for Dexamethasone, the writ says.

The owners voluntarily withdrew Amralah from the Melbourne Cup on October 31 and chose not to enter him in the Emirates Stakes on November 7.

They claim Dr Anderson and BVP failed to exercise reasonable skill and care and failed to ensure the treatment did not prevent Amralah from racing.