SAN FRANCISCO (Reuters) - Citing precedents set at the Nuremberg trials of Nazis and their collaborators, lawyers for villagers in Myanmar asked a U.S. appeals court on Tuesday to order oil company Unocal to face trial for using slave labor to build a natural gas pipeline there.

The hearing before an 11-judge panel of the Ninth Circuit Court of Appeals stems from two 1996 lawsuits against Unocal Corp. that claimed rural villagers in the former Burma were subjected to forced labor, rape, torture and murder by the military during construction of a pipeline partly funded by the oil company in a deal with the government.

Attorneys for the plaintiffs argued that the decisions in the Nuremberg trials after 1945, which pressed suits against businesses that benefited from Nazi slave labor, such as Krupp, applied to the Unocal case.

"This case is consistent with the Nuremberg principles," said Terry Collingsworth, executive director of the Internal Labor Rights Fund. "Unocal hired the military, had a contract, and gave them logistical support, vehicles. And this went on for seven years."

The Yadana natural gas pipeline connects an offshore gas field to Thailand and is operated in a partnership with the government of Myanmar including Unocal, Thailand's PTT and France's Total . Unocal has repeatedly defended its investment in the former Burma, saying it has helped build roads and improved schools and hospitals.

Justice Alex Kozinski of the 9th Circuit Court of Appeals asked Collingsworth where the liability stopped. If consumers brought tennis shoes from companies that used forced labor would they be liable, he asked. "Where does this ... go? How do you draw the line?" said Kozinski.

18TH CENTURY LAW

The attorney for El Segundo, California-based Unocal, Randy Oppenheimer, said Unocal had no control over the Myanmar military and did not actively participate in the alleged human rights violations. "With the Nuremberg cases you have an active participant," he said. "They do not include aiding and abetting, but are direct participants."

The judges pressed the issues of the Nuremberg case and its relevance to the civil suit before them. After a round of questions that touched on a private entity's responsibility to report human rights abuses and what defines slave labor, they raised the possibility that Unocal turned a blind eye to the alleged abuses.

Both lawsuits claimed violations under the Alien Tort Claims Act, a once obscure statute written in 1789 and now used in human rights cases, which allows foreign nationals to sue for human rights abuses in U.S. courts.

Although the original case was thrown out of federal court in 2000, last year a three-judge panel from the Ninth Circuit Court of Appeals overturned that ruling, saying that a jury should be allowed to decide if Unocal was liable in "aiding and abetting" the alleged human rights violations.

But the justices differed on which standard of law -- international or U.S. Common Law -- should be applied when assessing this type of liability for a private corporation.