Hearing on the compensation claim brought by about 15,000 members of the Bodo community in Rivers State against the oil giant, Shell, began Tuesday in a United Kingdom court.
The community is seeking damages caused by two spills in 2008.
According to AFP, the court would consider the key legal issues ahead of a full trial expected in May 2015, according to the community's London-based law firm, Leigh Day.
The two sides failed to reach a compensation deal last year, with Leigh Day calling Shell's initial offer "insulting."
Sources familiar with the talks said the British-Dutch company proposed a settlement of N7.5 billion ($46 million, 35 million euros).
Lawyers for the villagers said the local environment was devastated by the two spills, depriving thousands of subsistence farmers and fishermen of their means of livelihoods.
Martyn Day, senior partner at Leigh Day, said each individual would end up with around N275,000 (1,300 euros, $1,700) after subtracting a lump sum to be paid to the community.
He claimed most of the fishermen affected by the spills earn $5,000 to $8,400 a year.
"Our clients know how much their claims are worth and will not be bought off cheaply," Day said in a statement.
According to Leigh Day, experts estimate the spills in the cluster of fishing communities in the state to be between 500,000 and 600,000 barrels.
Shell was quick to acknowledge liability for the spills and formally agreed this with Leigh Day in 2011, but it disputes the amount of oil involved and the extent of the damage.
The company, the biggest producer of oil in Nigeria, had said sabotage, illegal refining and theft had slowed the clean-up process.
Shell Petroleum Development Company of Nigeria Limited (SPDC) had also blamed lawyers for delaying the payment of compensation, saying the case should have been dealt with in Nigeria.
Nigeria is Africa's biggest crude oil producer, but much of the Niger Delta oil region remains deeply impoverished.
Decades of spills have caused widespread pollution in the region.
While Shell said sabotage and oil theft were the main causes, activists alleged the firm had not done enough to prevent such incidents and clean them when they occur.
In a statement ahead of yesterday's hearings, Mutiu Sunmonu, managing director of SPDC, said: "From the outset, we've accepted responsibility for the two operational spills in Bodo in 2008.
"They are deeply regrettable operational accidents, and they absolutely should not have happened.
"We want to fairly compensate those who have been genuinely affected as quickly as possible and clean up all areas where oil has been spilled from our facilities, including the many parts of Bodo which have been severely impacted by oil theft, illegal refining and sabotage activities."He said the pre-trial hearings would address certain "technical, but highly important, legal questions regarding the interpretation of Nigerian law."