Australia had not been represented in previous hearings in the Central Jakarta District Court because the Australian government insisted it was not subject to its jurisdiction.

Indonesian children were jailed alongside hardened adult criminals in Australian jails for people smuggling offences after the Australian Federal Police used a now completely discredited method of taking wrist X-rays to determine their age.

The 115 plaintiffs were detained for between three months and almost three years in jails and detention centres across Australia.

At the time the federal government had a policy of not prosecuting Indonesian boat crew who were children and sending them home.

The lawyer for the Australian Government, Togi Pangaribuan, said Australia would follow the legal process but this did not reduce the right of the Australian government to object to the court's authority.

The mediation process will begin next Wednesday and can last up to 30 days, with the option of another 10-day extension.

"We want to highlight that the Central Jakarta Court actually has no authority because as a sovereign state Australia has what is called state immunity," Mr Togi said.

"But we will see how the court process goes."

In a separate case in June, Ali Jasmin, who was working as a cook on a people smuggling boat in 2009, had his conviction overturned in the West Australian Court of Appeal.

Ali, who is not one of the plaintiffs in the class action, was just 13 at the time of his arrest but was sentenced to jail for five years in an adult prison.

During his court proceedings, the Australian Federal Police relied on a wrist X-ray to determine Ali's age even though the Office of the Commonwealth Director of Public Prosecutions had a legalised copy of his birth certificate that stated he was still a child.

In 2011 at least 70 Indonesian juveniles were estimated to be in Australian adult jails.

Mr Togi told the Central Jakarta District Court he had submitted a letter explaining why Indonesian courts had no authority over sovereign states such as Australia.

But Chief Judge Widodo said his objection should be presented at the session in which he had to provide his argument and would not be considered until then.

Lawyers for the Indonesian minors welcomed the mediation, saying it was possible Australia would change its mind and pay compensation.

"By coming today Australia has recognised the Indonesian legal system. As lawyers we are happy they came," Lisa Hiariej said.

The plaintiffs are suing the Immigration Department, the Australian Federal Police, the Commonwealth Director of Public Prosecutions and the Attorney-General's Department.

Ms Hiariej said according to Indonesian law representatives of each of the four defendants would need to attend the mediation session.