Bauer, a self-made businessman, was among the thousands of French Jews who were rounded up for deportation in 1944.
"La Cueillette des Pois" (Picking Peas), a gouache from 1887, emerged earlier this year on display at the French capital's Marmottan Museum, more than 70 years after being snatched from art collector Simon Bauer in Nazi-occupied France.
A court will on Tuesday begin examining who are the rightful owners -- Bauer's descendants or an American couple who say they had no idea as to its wartime fate when they bought it at auction in 1995.
Bauer, a self-made businessman, was among the thousands of French Jews who were rounded up for deportation in 1944. He narrowly escaped being sent to the Nazi death camps due to a train drivers’ strike.
"La Cueillette des Pois" was one of 93 works that were confiscated from him before he was sent to the Drancy internment camp near Paris and sold on by an art dealer.
On his release in 1944, he immediately began looking for his paintings but had only managed to recover a fraction of the works by his death in 1947.
His family then took up the hunt, but lost all trace of the Pissarro for half a century before it turned up at the Marmottan, on loan from its current owners for a major retrospective of the artist's work.
Bauer's grandson Jean-Jacques Bauer, 87, immediately filed a legal claim to prevent the painting leaving France while beginning a process to try wrest it back from Bruce Toll and his wife Robbi.
In May, a court granted his request to have it impounded in France pending a ruling on its on ownership.
The Tolls, patrons of Washington and Tel Aviv Holocaust museums who bought the work at Christie's auction house in New York, say they did so in good faith, unaware it was wartime loot.
"It is not Mr Toll, who bought this painting at public auction in 1995, who should pay for the crimes of Vichy," the couple's lawyer Ron Soffer told AFP, referring to France's puppet regime under the Nazis.
Bauer's descendants will attempt to show that legal precedence is on their side.
They have noted that since 1945 French courts have routinely annulled the sales of other works that were part of Bauer's collection and ordered they be returned to his family.
They are pinning their hopes on the application of an April 1945 law which renders void transactions of looted works.
The Tolls will attempt to show that the 1945 law does not apply in this case and contest the competence of the court to decide the matter.
If the court does not have jurisdiction in the affair it will have to "free the painting", Soffer said.
He added that the outcome would potentially be of "great importance" in the art world as it highlighted "a risk of legal insecurity regarding works which are lent to exhibitions in France.".
The Bauers' lawyer Cedric Fischer would not comment on the case ahead of the hearing.