"National security" concerns prompted Australia to raid the offices of a lawyer representing East Timor in a spy row over an oil and gas treaty, the United Nations' top court has heard.
Dili has dragged Australia before the International Court of Justice (ICJ) to seek the return of documents seized in the raid relating to a controversial oil and gas treaty between the two countries that East Timor wants annulled.
"Timor-Leste seeks to prevent Australia from taking steps properly available to us ... to protect ourselves from the threat to national security," Australian Solicitor-General Justin Gleeson told the court based in The Hague that rules on bilateral disputes.
Australia's lawyers told ICJ judges on the second day of hearings that the early December raid on lawyer Bernard Collaery's Canberra office was "justified and lawful" because a whistleblowing ex-spy may have given him sensitive information.
"Australia is entitled to have a legitimate concern that a former intelligence officer may have disclosed and may threaten further to disclose national security information, which would be a serious crime," Gleeson said on Tuesday.
"Those disclosures threaten our security interests," Gleeson said.
Attorney-General George Brandis personally approved the search warrant for the December 3 raid only after "rigorous internal consideration", Gleeson said.
The warrant was consistent with Australian law, Gleeson said, adding: "It is not for Australia to disclose further than I already have the precise security interest that drove the warrant."
He also claimed that East Timor could not claim lawyer-client privilege because the concept did not exist "when the communications are produced in the pursuance of a criminal offence".
Australia has given its undertaking, however, that it will not read or study the seized materials until such time as the ICJ's judges have made a ruling on East Timor's request.
East Timor has accused Australia of spying to gain a commercial advantage during 2004 negotiations over the Timor Sea gas treaty - called the Certain Maritime Arrangements in the Timor Sea, or CMATS - which covers a vast gas field between the two nations and involves billions of dollars.
Dili now wants the treaty scrapped.
The two states are currently involved in a separate, behind-closed-doors case on the issue before the Permanent Court of Arbitration, which is in the same building as the ICJ.
Dili's key witness in that case is the former Australian Secret Intelligence Services (ASIS) officer, who reportedly alleges that Canberra used an aid project refurbishing East Timor's cabinet offices as a front to plant listening devices in the walls in order to eavesdrop on deliberations about the treaty in 2004.
The cloak-and-dagger case could prove highly embarrassing for Canberra, should judges order the return of the documents.
East Timor gained its independence in 2002 following years of brutal Indonesian occupation but has a sluggish economy that is heavily dependent on oil and gas.
On Monday, East Timor's lawyers said they were "shocked" by Australia's actions, and that the tiny state "felt a real sense of grievance at the manner we were treated by our large neighbour".
Both sides wrap up their arguments on Wednesday and the ICJ judges are expected to rule in the case soon.
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