Australia has accused Japan of carrying out commercial whaling under the guise of scientific research on the first day of court hearings between the two nations.
Campaigners say the case could lead to an end to whaling in the Antarctic.
"Japan seeks to cloak its ongoing commercial whaling in the lab coat of science," Bill Campbell, an Australian government lawyer, told judges of the International Court of Justice in The Hague.
Japan catches and kills hundreds of whales in the Southern Ocean each year despite having agreed, under pressure from the United States, to an international moratorium on commercial whaling from 1986.
Japan says it is carrying out essential scientific research - allowed by a 1946 treaty on whaling - to establish whether whale stocks are recovering from past overfishing.
But Australia, backed by New Zealand, says the research is a fig-leaf to conceal Japan's true purpose of commercial whaling.
Justin Gleeson, Australia's solicitor general, said Japan's research only began on its current scale after the commercial whaling ban had come into force and said whaling had continued using "similar boats, similar crews and similar techniques".
"The government of Japan saw scientific whaling as a way around the moratorium," he said.
Japan's court filings are not yet public and it will not present its case until next Tuesday, but Koji Tsuruoka, deputy minister for foreign affairs, told reporters in The Hague that the scientific whaling programme was legal.
"Japan is proud of its tradition of living in harmony with nature and of utilising living resources while respecting their sustainability," he said.
Earlier this week, Japanese diplomat Noriyuki Shikata said the research was sustainable.
"There are about 515,000 minke whales in the Antarctic, and Japan's research is taking only about 815 a year," Mr Shikata said.
"This is below the reproductive rate and ... very sustainable."
Activists at the court looked forward to a ruling that they said could put an end to whaling in the Southern Ocean.
"We have been campaigning on this for ten years," said Geert Vons, director of Sea Shepherd Netherlands, a conservation group that monitors whaling.
"If Australia wins, we shouldn't need to go down to the Southern Ocean to monitor any more."
Australia says more than 10,000 whales have been killed since the start of the moratorium, which was introduced to allow depleted whale stocks to recover after years of overfishing.
Environmental campaigners said science could not be used to justify any commercial whaling.
"Commercial whaling, whether conducted openly or under the guise of science, is a cruel and outdated practice which produces no science of value," said Patrick Ramage, director of the whales programme at the International Fund for Animal Welfare in London.
"All necessary research on these whales can be done by non-lethal means," said John Frizell, a whales campaigner at Greenpeace. Neither group is involved in the case.
Japan and Australia have both agreed to be bound by the Hague court's ruling.
While Australia has many backers, support for a complete whaling ban is not unanimous.
Norway, which never agreed to the moratorium, continues to whale commercially and has declined to intervene in the case.
Norway's fisheries minister Lisbeth Berg-Hansen said it was for Japan to decide how it wanted to do research into whales.