Treasurer Josh Frydenberg's lawyers have told a court hearing it is "likely" his Jewish mother's family renounced their Hungarian citizenship, as he fights a petition challenging his eligibility to sit in Parliament.

Key points: One of Josh Frydenberg's constituents, Michael Staindl, challenged his eligibility to sit in Parliament

One of Josh Frydenberg's constituents, Michael Staindl, challenged his eligibility to sit in Parliament The case follows the citizenship saga which saw dozens of MPs ousted under section 44 of the constitution

The case follows the citizenship saga which saw dozens of MPs ousted under section 44 of the constitution Mr Frydenberg's lawyers argued it was "likely" the family had to cut ties with Hungary when they left the country

Mr Frydenberg's lawyers are seeking to prove he does not hold dual citizenship, after a petition to the High Court was made by Michael Staindl, a constituent from the Kooyong MP's Melbourne electorate.

The senior Liberal MP's lawyers on Tuesday told three Federal Court judges hearing the petition that while there was no single "piece of paper" to prove his family's renunciation of Hungarian citizenship, strong historical and legal evidence suggested it was "likely".

The case follows Federal Parliament's citizenship saga, which saw dozens of Liberal, National, Labor and minor party MP's ousted for being dual nationals, which is not allowed under Section 44 of the constitution.

The Federal Court heard that Mr Frydenberg should be disqualified because he is a citizen of Hungary through his mother, Erika Strausz.

She was born in Budapest in 1943 but left the country with her family in 1949 following the rise of Communism.

Mr Frydenberg was born in Australia in 1971.

Michael Staindl's lawyers said it was "inherently unlikely" Mr Frydenberg's family had renounced citizenship of Hungary. ( AAP: David Crosling )

Mr Staindl's lawyer, Angel Aleksov, said Mr Frydenberg's mother did not renounce her citizenship and even if those rights were temporarily lost during the Communist era, they were restored following the fall of the regime in 1989.

"There is significant public interest in a person sitting in Parliament without an allegiance to a foreign power," he said.

'Can't produce a piece of paper' to prove citizenship

Mr Aleksov said renouncing citizenship or "voluntary dismissal" was onerous, risky and "inherently unlikely" to have occurred.

"There is still a substantial argument for why you should find the respondent [Mr Frydenberg] is a citizen of Hungary," he said.

But the "easy inference" is that his mother did renounce her Hungarian citizenship, according to Mr Frydenberg's lawyer, John Sheahan.

He said from a legal and historical perspective it was "unascertainable" but a "likely" requirement in 1949 to cut ties with the country.

"The proper inference was that the authorities required you to go through the process of renouncing," he argued.

He conceded "we can't produce a piece of paper" to conclusively prove renunciation, but said a search of Hungarian records had not established citizenship either.

He said the Strausz family believed it had separated from Hungary and described themselves as "stateless" on arrival in Australia.

"When you seek to emigrate [from Hungary] the authorities treat you as if you no longer want to be a citizen," he said.

"For good measure, you are now an enemy of the people once you are on the other side of the door."

He said Mr Frydenberg's relatives had good reason to flee Hungary because persecution of the Jews continued even after the demise of the Nazis and the end of World War II in 1945.

The court heard the judges will need to consider six volumes of materials, and the hearing continues.