The fate of 157 asylum seekers detained on an Australian Customs vessel will be determined by the full bench of the High Court next month.
A hearing will be held in Canberra on August 5 and last no longer than two days.
Lawyers for the asylum seekers says the outcome of the two-day hearing hinges on two key issues.
Lawyers for the Sri Lankan asylum seekers argue the group was within Australian territorial waters when their vessel was intercepted 27 kilometres from Christmas Island on July 7.
They say the decision to detain them on the high seas did not fall within the bounds of legal reasonableness.
They say the decision rests on two points.
One is whether the government had the legal power to intercept the boat, and deliver them somewhere other than Australia
The second issue involves fairness in the decision-making process.
The Australian Lawyers' Alliance Greg Barnes says the treatment of the asylum seekers also breaches a number of international conventions.
"What we do know is that that is in breach of Australia's international obligations under a number of conventions. One the convention against torture and cruel and unusual punishment., the international covenant on civil and political rights. But also mandatory minimum standards for the treatment of prisoners and detainees to which Australia is a signatory."
The full bench of the High Court will determine if the government had the power to intercept their boat, and deliver them somewhere other than Australia, after a two-day hearing gets underway from August 5 in Canberra.
Human rights lawyer and spokesman for the asylum seekers' legal team, Hugh de Kretser, spoke after the Court's decision.
He's hoping for a swift resolution for the group, which has now been at sea for 25 days - including more than two weeks on the Customs vessel.
"Today the High Court set down the hearing for two days on Tuesday, 5th August. We hope that the court after that two-day hearing makes its decision very quickly."
Lawyers say government documents filed with the court haven't shed any light on where the government originally planned to take the 157 asylum seekers.
And it remains unclear where the Australian government will take them if they lose next month's High Court battle.
They still could be at risk of being transported back to Sri Lanka if the High Court legal bid fails.
Prime Minister Tony Abbott recently defended that idea, pointing out that the civil war against Tamil separatist rebels ended in 2009.
"Well it is a peaceful country. It is a peaceful country. I don't say it's a perfect country, not even Australia is that, but it is a peaceful country and all of us should be grateful that the horrific civil war is well and truly over. And that is to the benefit of every single Sri Lankan - Tamil, Sinhalese. Everyone in Sri Lanka is infinitely better off as a result of the cessation of the civil war."
Meanwhile Immigration Minister Scott Morrison has formally requested that India take the Sri Lankans.
The asylum seekers departed from India where it's believed they had been living.
India has sought consular access to the 157 Tamils and is seeking to determine whether any of those on board hold Indian citizenship.
But there is no guarantee that it will agree to take them back.
Greens immigration spokeswoman Sarah Hanson Young doesn't believe India will be a party to the Australian government's plans.
"No matter how hard Scott Morrison begs, India seem as though they are not going to have a bar of it. When are the Australian people going to get the truth from the Minister and the PM, about what is going on, how those people are being treated? And when are we going to stop that charade and get those asylum seekers off the prison ship, including the children onto land and start assessing their claims properly?"
High Court Judge Kenneth Hayne says given the asylum seekers are in custody, it is important the legal battle over their future is finished as quickly as possible.
If the High Court finds in the asylum seekers' favour, the Sri Lankans may become the first group of asylum seekers to be processed on the Australian mainland for more than six months.
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