Jonathan Ashley-Norman, prosecuting for the Office of Rail Regulation, told the court that the rail grinding unit was being towed when it broke away during the early morning.
It started rolling downhill without brakes from Highgate and into central London in August, 2010.
"It could have led to tragedy but thanks to the immediate actions of LU staff, no one was hurt," said Mr Ashley-Norman.
Mr Ashley-Norman said attempts were made to slow the runaway train down using points at Camden Town and Mornington Crescent, and the trains were diverted onto different lines.
It eventually stopped at Warren Street central London when it reached an upward incline.
The court was told that a fault had now been remedied and the incident was extremely unlikely to occur again.