A Vietnamese court has rejected hundreds of lawsuits filed by fishermen who demanded more compensation from a Taiwanese-owned steel plant responsible for a devastating toxic leak, a leading activist said Saturday.

In a rare case of civic action in authoritarian Vietnam, crowds of fishermen swamped a court house last month to file 506 lawsuits against Taiwan's Formosa, which is building a multi-billion-dollar steel plant in Ha Tinh province.

The conglomerate paid Vietnam's government $500 million after it was blamed for dumping waste that poisoned tonnes of fish and decimated the local seafood industry earlier this year.

Local fishermen launched their lawsuits in an effort to wrest more money from Formosa and demand it shut down the steel operation altogether.

But Catholic priest Dang Huu Nam, who helped lead the plaintiffs, told AFP the court had returned more than 100 case files and that he was expecting more.

"We will look into why the files are returned as the court did not say concretely, before deciding what moves to do next," Nam said.

The court's judge, Nguyen Van Thang, was quoted in state-run media saying that all 506 cases were returned.

The fishermen had asked for compensation of roughly $2.5 million but did not provide clear evidence of their losses, he said according to Phap Luat, an official legal news site.

Dead fish and other marine life began washing up on Vietnam's central coast in April, hitting fishermen and triggering rounds of protests.

After weeks of obfuscation the government laid blame on Taiwan's Formasa, which has a history of environmental scandals spanning the globe, and ordered the conglomerate to pay a $500 million fine.

The government said it would start distributing the cash to affected fishermen in October and confirmed last month that payouts would range from $130 to $1,600 per person.

Last Sunday, thousands of Vietnamese protesters surrounded the steel plant, with some scaling its walls and holding signs demanding its closure.

Vietnam's communist rulers tolerate little dissent but anger over corruption and environmental degradation often spark significant protests.