A group of 153 asylum seekers intercepted off the coast of Australia could be detained at sea for weeks, if the High Court decides to hear a legal challenge over their fate.

A High Court hearing on Tuesday heard the first official confirmation that the group, which includes children as young as two, are being held on an Australian Customs vessel.

The Government has agreed not to return the asylum seekers to Sri Lanka without three days' notice.

Meanwhile, members of another group of asylum seekers, who were handed to the Sri Lankan navy on Sunday, have appeared in court in the southern city of Galle.

In Australia's High Court yesterday, lawyers acting for about one third of the 153-strong group of Tamils, whose whereabouts the Government refuses to disclose, are seeking to challenge the legality of the Commonwealth's actions.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 42 seconds 4 m 42 s Government will give 3 days' notice before handing Tamils over to Sri Lanka ( Alison Caldwell ) Download 8.6 MB

Tuesday's hearing in Melbourne was told at least 21 of the asylum seekers are minors, aged between two and 16 years of age. The majority of the group as a whole are males.

Ron Merkel QC, who is acting for the asylum seekers, told the court the boat was intercepted in Australian waters and that there was evidence it was in "trouble" at the time.

However, Solicitor-General Justin Gleeson said the boat was found in Australia's contiguous zone - not the migration zone - and argued that the passengers had no right to claim asylum in Australia.

"People who reach the contiguous zone have no rights under the act," he told the court.

Mr Gleeson said the 72 hours' notice would be given to the asylum seekers' lawyers if a decision was made to hand them over.

Sorry, this video has expired Professor Don Rothwell says the case is the Government's "Tampa moment"

He said the commitment to provide notice was "given without any admissions on any matter of fact or law".

Foreign Affairs Minister Julie Bishop has told Sky News the Government will uphold the commitment.

"We will of course abide by our undertakings to the court and we await the outcome, but the Australian Government has made it clear from the outset that we intend to disrupt the people smuggling trades," she said.

Mr Merkel said the issue was not whether the Government had power to take the 153 people on board an Australian vessel, but whether they could be forcibly returned to Sri Lanka.

Prime Minister Tony Abbott has refused to comment on the specifics of the situation, but says the asylum seekers are safe.

"I just want to stress to you ... that we will comply with our legal obligations and we will certainly comply with our obligations to promote safety at sea," he said.

Uncertainty for asylum seekers still being held at sea

Justice Susan Crennan indicated the full bench would likely hear the case, with the matter to go back before the High Court for a directions hearing within 21 days.

It is unclear whether the asylum seekers will stay aboard the Customs vessel for that time.

Justice Crennan has given lawyers for the asylum seekers seven days to file a statement of claim, after which the Government has seven days to respond.

Mr Merkel has asked the Government's lawyers to give him notice if the asylum seekers are to be transferred to Manus Island or Nauru.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 7 minutes 23 seconds 7 m Human Rights Commission president talks about the stand-off over Sri Lankan asylum seekers

The hearing has now been adjourned until Friday morning, when the Government's lawyers are expected to provide documents including details of the asylum seekers' names.

Sri Lanka's high commissioner to Australia, Admiral Thisara Samarasinghe, says his country has no plans to accept the group, who are believed to have set sail from a port in India.

"I can categorically deny and reject any plans of Sri Lanka to take over the suspected, speculated, presumed asylum seekers coming from India," he told ABC News 24.

The president of the Australian Human Rights Commission, Gillian Triggs, says the asylum seekers could be sent to an offshore processing centre.

"I believe that the intention is that the children ... and the families and others will be taken to a land-based detention centre," she told 7.30.

UN urges review of Australia's handling of Sri Lankan refugees

The United Nations' human rights office has urged Australia to hold a wide-ranging judicial review of its treatment of asylum seekers from Sri Lanka.

The office's spokeswoman Ravina Shamdasani says a review should examine whether Australia respects the principle of "non-refoulement" - UN-speak for not turning away a refugee without a fair hearing, a key tenet of the 1951 Refugee Convention.

In addition, Ms Shamdasani says Australia needs to assess its compliance with the UN Convention against Torture, the International Covenant on Civil and Political Rights and the Convention on the Rights of the Child.

Senior politicians and clergyman in Sri Lanka say while the nation is no longer at war, it is still extremely dangerous for Tamils.

Jesuit priest Father Yogeswaran, who represents the Tamil Civil Society of Trincomalee, has written to the Australian High Commissioner in Sri Lanka to say Prime Minister Tony Abbott is wrong to suggest Sri Lanka is now a peaceful country.

"The conflicts are not over for the minorities in this country as the recent events have unfolded," he wrote.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 56 seconds 4 m 56 s Sri Lankan Tamil leaders say it's unsafe for asylum seekers to return home ( Jo Jarvis ) Download 9.1 MB

Tamil national alliance leader and Northern Province chief minister, Canagasabapathy Visuvalingam Vigneswaran, says Tamils are forced to leave because they face discrimination and violence.

"It is because life is intolerable in Sri Lanka," he said in a statement to the ABC's PM program.

"The very same army which fought the war and are now subject to International War Crimes' investigations are still in large numbers positioned in the north and east. They have taken over every aspect of civilian life."

Asylum seekers returned on Monday appear in Sri Lankan court

As the hearing took place in Melbourne, a smaller group of asylum seekers who were handed to the Sri Lankan navy by Australian authorities on Sunday morning were appearing in a court in Galle.

The court granted bail to 27 of the 41 people who were returned to Sri Lanka on Monday after the controversial mid-sea transfer.

Sri Lankan asylum seekers sent back by Australia queue to enter the magistrate's court in Galle ( AFP: Lakruwan Wanniarachchi )

As relatives waited outside the colonial-era court building in the southern city, a magistrate remanded five others in the group in custody, and discharged nine children.

The five people who were remanded in custody have been accused of organising the trip, and face penalties of up to five years in prison.

Their next court hearing is scheduled for July 14.

The court heard those on board the boat paid between $1,000 and $5,000 for a place on the vessel, which was intercepted near the Cocos Islands late last month.

One of the detainees, Dhamith Caldera, told the AFP news agency that he would "complain to the UN" over his treatment by Australian Customs authorities, and denied that he had been screened as a possible asylum seeker.

"They never asked any questions. They just wanted us to go back," he said, declining to answer if he believed he had a case for asylum. "They treated us very badly."

Processing can include on-water teleconferencing: Government

It came as the Government confirmed that teleconferencing of asylum seekers at sea "may" be used in what it is calling the "enhanced screening" of asylum claims.

There have been reports that Australian authorities have conducted basic interviews with the asylum seekers via video link - a method that has been criticised by refugee advocates.

The group of 41 asylum seekers transferred to the Sri Lankan navy were assessed at sea through the "enhanced screening" process.

Government leader in the Senate Eric Abetz told Senate question time that "clearly enhanced processing may well include teleconferencing".

Assistant Immigration Minister Michaelia Cash defended the Government's approach.

"In relation to the enhanced screening process, I advise the Senate that the processes that we have followed in relation to enhanced screening is the same process that was practised by the previous government," she said.

But Ms Shamdasani says the UN rights office is "deeply disturbed" by their return, given an apparent lack of adequate screening of each of the would-be refugees.

"International law requires that each and every case be properly and individually examined on its own merits. This is not something that can or should be done hurriedly, remotely and on the high seas, without procedural safeguards and due process guarantees for those involved," she said.

"Any returns, even from the high seas or in the territorial seas of other states, must be carried out in accordance with international law, under which refoulement and collective expulsions are strictly prohibited."

ABC/wires