Australia is facing two court challenges to its controversial asylum-seeker policies with both seen as test cases.

The High Court in Canberra, the capital, began hearing a case on Tuesday on the validity of a law used to detain 157 Sri Lankan Tamil asylum-seekers for weeks on the high seas in June, after they sailed from India.

Meanwhile, in Brisbane, the Federal Court began considering a case that lawyers believe could set a precedent for asylum-seeker babies born in Australia.

Lawyers for the 157 Tamils, who are now held in a detention camp on the Pacific island of Nauru, claim their clients were falsely imprisoned on the ship.

The Tamils' case centres around whether Canberra has the power to remove asylum-seekers from its contiguous zone, just outside territorial waters, and send them to other countries.

The Melbourne-based Human Rights Law Centre said the outcome could have implications for government policy.

"The case will consider whether the detention was lawful and the extent of the Australian government's powers to intercept and detain at sea," said the centre's executive director Hugh de Kretser. 

"This case concerns fundamental issues of liberty, safety and due process."

The group of Tamils, including 50 children, left the Indian port of Pondicherry in June, but their boat was intercepted by Australian authorities

Australian authorities wanted to send them back to India and they were held in limbo on a customs ship while their case was debated.

The Tamils were eventually brought to Australia for a brief period so Indian consular officials could assess them. But all refused to cooperate and were transferred to Nauru.

The government insists their detention at sea was legal and that the plan to send them to India did not breach Australia's non-refoulement obligations under international law.

'Ludicrous decision'

In the Brisbane case, a court is considering the fate of a baby born in Australia to asylum-seeking parents to determine whether, in the eyes of the law, he arrived in the country by boat.

The baby was born prematurely in the eastern Australian city last year after his mother, from the persecuted Rohingya minority, was transferred from a detention centre on Nauru due to concerns about her pregnancy.

The mother initially arrived in Australia from Myanmar by sea.

The government rejected the baby's refugee application on the grounds he was an unauthorised maritime arrival. Lawyers are challenging how someone born in an Australian hospital could have arrived by sea.

"This is a ludicrous decision given he was born here in Brisbane's Mater Hospital and he even has a Queensland [state] birth certificate," lawyer Murray Watt said.

Lawyers said the fate of about 100 babies born on Australian soil to asylum-seeker parents who arrived via boat rested on the decision.

Under Canberra's hardline immigration policy, asylum-seekers who arrive on boats are now denied resettlement in Australia and sent to Papua New Guinea or Nauru, even if they are genuine refugees.

Only one boatload of asylum-seekers has reached the Australian mainland since December, compared to almost daily arrivals previously under the Labor administration, with hundreds of people also dying en route.

Source: Agencies