Northern Territory's Muckaty Station was nominated by the Northern Land Council as a preferred site for Australia's first nuclear dump site in 2007, despite its cultural significance.
Traditional owners today put forward an opposing case in Melbourne's Federal Court.
"The traditional owners' representatives put forward a two-day overview of that case and then the last part of the week has been the Commonwealth and the Northern Land Council making their defence," said Nuclear Free campaigner, Dave Sweeney.
The Federal Court in Melbourne has heard that the Northern Land Council did not consult with, or obtain consent, from traditional owners prior to nominating the land for a dump site.
But Mr Sweeney revealed there were no official records supporting this.
"They're basing consent for a national radioactive waste dump on a couple of file notes," he said.
If the court rules against traditional owners, a $12 million compensation package will be on offer.
"The question of compensation isn't a question; what it is here is a question of primary right, can the people determine and decide what happens on their country?" Mr Sweeney said.
NITV News sought comment from the Northern Land Council and a representative for Muckaty Traditional Owners but they were unable to comment.
Pia Akerman The Australian 3 June 2014
One of the country's most powerful Aboriginal bodies has been accused of misleading Top End residents about the safety of using Muckaty Station as a - nuclear waste dump site.
In the opening day of the legal challenge to the proposed nuclear waste facility at Muckaty, 110km north of Tennant Creek, opponents of the plan said they would never accept nuclear waste there.
Ron Merkel QC, representing Mark Lane Jangala and three other elders who oppose the waste dump, told the Federal Court that the Northern Land Council had acted outside its powers and misrepresented the facts during "consultations" with traditional landowners.
"This is a matter which has literally torn the Muckaty community apart," he said.
Mr Merkel's submissions claim the NLC failed to ensure traditional owners understood the effect of nominating Muckaty as a nuclear waste site, telling them it was safe to bury it and downplaying any risks. The NLC is also accused of incorrectly identifying people with an interest in the land and not consulting in a culturally appropriate manner with Aboriginal interpreters.
Muckaty Station was chosen by the Howard government in 2007 after being volunteered by the NLC in a deal worth more than $12 million to the NLC and $10m initially to the Northern Territory government, which would receive another $2m a year from other governments once the facility was operational.
Mr Merkel said "not one" Aboriginal person at Muckaty had any right to any money if the dump went ahead according to a deed that nominated the site.
The hearing continues in - Melbourne this week before moving to the NT.