The 153 asylum seekers fighting a return to Sri Lankan authorities were not intercepted in Australian waters, the Australian government claims.

A late sitting of the High Court in Sydney on Monday temporarily barred the return of the asylum seekers to Sri Lanka.

Ron Merkel QC told the court on Tuesday that the asylum seekers should now be processed under the Migration Act and should not be returned to Sri Lanka against their will.

But Solicitor-General Justin Gleeson said the boat was intercepted 12 miles (19 kilometres) from Australian territorial waters.

He said any claims made under the Migration Act were therefore not applicable.

The Australian government said it would not hand over any of the people on the boat to Sri Lankan authorities without giving 72 hours written notice.

Gleeson said that undertaking was not an admission the government planned to hand the asylum seekers over to Sri Lanka.

Merkel said the goverment's undertaking resolved the central issue of urgency in the matter, but sought to communicate with his clients.

Justice Susan Crennan stood down the matter to allow the two parties to discuss how the case progresses.

The hearing will resume today in Melbourne at 4pm.