The case, which is expected to go to court next month, sheds unusual light on Schindler's personal life after he saved some 1,200 Jews from the Nazis during World War II, and the battles over his estate.
It also raises questions about the ownership rights of documents that once belonged to important figures like Schindler - whose personal papers have in the past turned up at auction.
The case has been brought by Erika Rosenberg, an Argentinian woman, who is suing Jerusalem's Yad Vashem Holocaust museum over a suitcase containing thousands of Schindler's documents.
Rosenberg claims ownership of the documents by virtue of being the heir of the German industrialist's late wife, Emilie.
The suitcase and the documents have been held since 1999 by Yad Vashem, which insists they never belonged to Emilie Schindler but were passed on by Oskar Schindler to a third party before his death.
During World War II, Schindler, an ethnic German from then-Czechoslovakia and a member of the Nazi party, persuaded German officers - through bribes and other means - to let him employ Jews at his factory, saving them from the death camps.
His story captured public attention decades later with Steven Spielberg's 1993 Oscar-winning movie "Schindler's List."
Sales of Schindler papers
After the war, Schindler emigrated with his wife to Argentina, but in 1958 returned to Germany alone and died there in 1974. She remained his legal heir.
The suitcase containing Schindler's personal documents and pictures - as well as a number of copies of the original lists of Jews he saved - eventually turned up in the home of a friend, the late Annemarie Staehr.
In her lawsuit, Rosenberg describes Staehr as Schindler's "lover" and claims she took it from his home after he died.
But Yad Vashem's legal team says their relationship was platonic and that Schindler had given her the suitcase and its contents as a gift.
According to the plaintiff, the suitcase was found at Staehr's house after she died and her children handed it over to a German newspaper and the German national archives in 1997.
When news of the discovery became public, Emilie Schindler took legal action in Germany to retrieve the suitcase and its contents.
But when a judge turned up to search the premises of the newspaper in 1999, he was told that they had already been sent to Yad Vashem, court documents show.
In 2001, Emilie Schindler returned to Germany where she died, childless.
In the last decade of her life, Emilie Schindler became close to Rosenberg, her biographer, and designated her as heir to her estate.
Yad Vashem claims that Rosenberg is a "serial suer" who is seeking to exploit Schindler's memory for her personal gain.
Documents related to Schindler have financial as well as historic value.
In 2013, the blueprints for an expansion of his wartime factory in Poland were sold for $63,426 and the same buyer paid $59,135 for a 1944 letter of introduction signed by Schindler.
None of the original lists of Jews comprising the "Schindler lists" remain, but historians believe seven copies were made of them shortly after World War II.
'Belong in the public domain'
Only one such copy is currently in private hands. Every so often unsuccessful efforts are made to sell that document, most recently in 2013 with a starting price of $3 million.
Naor Yair Maman, who represents Rosenberg, told AFP his client had tried to retrieve the documents informally for years, before finally resorting to legal action against Yad Vashem.
"I've no doubt that the issue of the ownership is very clear," he told AFP.
"Even if you believe that from the historical-academic perspective, it would be preferable that the documents remain in Yad Vashem, you have no right, whatsoever, to claim title to someone else's property," he said.
Rosenberg doesn't say in the suit what she wants to do with the documents.
Yad Vashem is a national institution which is tasked with gathering, examining and researching materials pertaining to The Holocaust.
It is venerated within Israel and a mandatory stop on the itinerary of visiting dignitaries.
The museum says the disputed documents "belong in the public domain". Yad Vashem insists it is legally entitled to the documents and has not acted in an underhand manner, denying claims by Rosenberg's legal team that it had "grabbed" the suitcase.
"Yad Vashem holds the documents lawfully and has acted the whole time openly and publicly," it said in a statement to AFP, in which it expressed opposition to "trading in Holocaust-era documents."
"We will hold our debate with Rosenberg in court to ensure these documents do not reach private hands, of those who are not their legal owners and whose interests are unclear," it said.
The Jerusalem court will hold a preliminary hearing on the case on April 15, after mediation between the sides failed.