Amsterdam – East Timor demanded on Monday that Australia return seized documents relating to the two countries' negotiations over oil and gas reserves thought to be worth tens of billions of dollars.

The dispute brought before the United Nations' top court pits one of Asia's poorest countries against its wealthy giant neighbour, Australia, in a case involving spy agencies, bugging allegations, snatched documents and potentially huge rewards from developing oil and gas fields.

The hearings at the International Court of Justice (ICJ) in the Hague, in a case brought by East Timor against Australia, concern seized documents allegedly showing how Australia may have used intelligence to outmanoeuvre East Timor in talks over the Greater Sunrise oil and gas fields.

The two countries are in dispute over revenue-sharing as well as how best to develop the gas fields, located 150 km southeast of East Timor and 450 km northwest of Darwin, Australia.

The seized documents contained legal advice and details of East Timor's negotiating position and strategy in relation to Australia, Sir Elihu Lauterpacht, East Timor's lawyer, told judges on Monday, putting Dili "at a considerable negotiating and litigating disadvantage".

East Timor wants the ICJ to order the return of documents and other material which was seized during raids by Australia's domestic spy agency on the Canberra offices of a lawyer representing East Timor over Australian bugging claims and an unnamed former spy-turned-whistleblower.

The Southeast Asian nation, which gained independence in 2002, says that officers of the Australian Security Intelligence Organisation (ASIO) seized correspondence between the government of East Timor and its legal advisers, including documents relating to a pending arbitration under the 2002 Timor Sea Treaty between East Timor and Australia.

East Timor is also bringing an arbitration case in The Hague over allegations that the Australian Secret Intelligence Service (ASIS) bugged East Timorese government offices in Dili during the 2004 negotiations over the maritime boundary between Australia and East Timor and the revenue split from the Greater Sunrise gas fields.

Australia's Woodside Petroleum is contracted to develop the Sunrise LNG plant but is stuck in the middle of the dispute. While Woodside prefers a floating LNG plant, East Timor is pushing for an onshore plant that will provide jobs for locals, leaving the project at a stalemate.