The Tanzania-based International Criminal Court for Rwanda (ICTR) is required by the UN Security Council to wrap up first instance proceedings by year's end.
But 14 years after the genocide, in which around 800 000 people were massacred, many cases have been slow to get off the ground and the ICTR is seeking to hand over some cases to Rwandan courts.
"It's a historical hearing... a key turning point," ICTR spokesperson Roland Amoussouga told AFP.
The debate on the transfer of jurisdiction was taking place during the trial of Yussuf Munyakazi, a former businessman accused of genocide and extermination.
Following Rwanda's July 2007 abolition of the death penalty, ICTR chief prosecutor Bubacar Jallow has filed requests for five accused - including Munyakazi - to be transferred to Rwandan courts.
Human rights organisations have balked at the prospect of some cases being transferred to Rwanda, whose institutions they argue do not offer sufficient guarantees of a fair trial.
Human Rights Watch recently voiced reservations while Amnesty International last year claimed there were "serious concerns" about Rwanda's ability to investigate and prosecute genocide-related crimes both fairly and impartially.
Kigali filed a memo to the ICTR in December 2007 defending its judiciary.
"Rwanda is ready, on merit, to receive and conduct trial of Yussuf Munyakazi, subject to all legal requirements and standards," the document said.
"The accused will receive a fair trial. Rwanda's legal framework provides sufficient guarantees against alleged threats upon the safety and security of prisoners," it added.
Rwanda's ruling Rwandan Patriotic Front stemmed from the former Tutsi rebellion that brought an end to the genocide perpetrated by majority Hutus.
Whatever ruling comes out of the Munyakazi case, it will be appealed by either prosecutor or defence, paving the way for what observers predict could be a protracted legal battle.
However, the final decision will serve as jurisprudence, even if the ICR will continue to treat each accused on a case-by-case basis.
The ICTR detention centre currently houses seven accused awaiting trial. Three suspects detained in Europe are also awaiting transfer to the UN-backed court in Arusha while 13 wanted officials are still on the run.
Since its creation in 1994, the special court has so far sentenced 30 Rwandans over the genocide and acquitted five.
AFP