The Australian government has lodged a special leave application in the High Court to challenge a landmark Federal Court ruling on compensation potentially worth millions of dollars over a mining lease on the Gove Peninsula.

The case, known as Yunupingu on behalf of the Gumatj Clan or Estate Group v Commonwealth of Australia [2023] FCAFC 75, sought compensation under the Native Title Act for grants and acts by the government without just terms.

Mr Yunupingu was seeking up to $700 million in compensation from the Commonwealth on behalf of the Gumatj clan, over the acquisition of land on the Gove Peninsula in north-east Arnhem Land in 1969, which was leased to Swiss mining company Nabalco. The lease was taken over by Rio Tinto in 2007.

The action contended that, in the period from 1911 to 1978, a number of grants or legislative acts took place in the Territory which, if valid, would have been inconsistent with the continued existence of the claimants' non-exclusive native title rights, and would have extinguished those rights at common law. He argued that the grants or acts purported to effect an acquisition of property within the meaning of s 51(xxxi) of the Constitution, and they did not provide just terms within the meaning of that provision.

Mr Yunupingu's case argued that the grants or acts were invalid by reason of the failure to provide just terms as required by the Constitution.

In its findings brought down in May, the full Federal Court rejected all of the Commonwealth's arguments against Yunupingu's case on behalf of Gumatj Clan and held that native title rights and interests constitute "property" for the purposes of s 51(xxxi) of the Constitution and that the just terms requirement contained in s 51(xxxi) does apply to laws enacted pursuant to s 122.

The decision was handed down just days after Mr Yunupingu was farewelled at a public memorial attended by Prime Minister Anthony Albanese.

It was the first time the Federal Court had been asked to determine whether the Commonwealth's actions in acquiring land without recognising native title were invalid.

At the time of the court ruling, a spokesperson for Commonwealth Attorney General Mark Dreyfus told National Indigenous Times that Commonwealth "notes today's decision in Yunupingu on behalf of the Gumatj Clan or Estate Group v Commonwealth of Australia".

"We will now carefully consider the Full Federal Court's decision," he said.

This week, Mr Dreyfus told the ABC it was appropriate the case's issues be settled by the High Court so "parties to this and future matters have clarity and certainty about the law in this area".

"This case raises important legal issues including very significant constitutional issues that go beyond the native title context," he said.

"The application of these constitutional issues in the context of native title compensation is new and the Federal Court decision represents the first time these issues have been judicially determined in that context."

The High Court will now decide if it will consider the Commonwealth's appeal.