Foreign nationals will still not be able to stand for election to the Chief Pleas
The hearing into the Barclay Brothers' challenge to Sark's constitutional changes has heard that European human rights laws "do not apply".
The brothers are seeking a judicial review of the proposals claiming they do not go far enough towards democracy.
But, defending the proposals, Jonathan Crow QC, told the High Court in London that Sark is an "overseas territory".
Mr Crow, Government counsel, said the UK Government is responsible only for international relations and defence.
Arguments that the UK's Human Rights Act applies to the island are "plainly wrong", said Mr Crow on the second day of the hearing.
He added that the claims by Sir David and Sir Frederick Barclay that Sark's reformed constitution will violate the European Convention on Human Rights are simply "not justiciable" in an English court.
Sark's current constitution means landowners automatically get a seat on the ruling body, the Chief Pleas.
The new system will see the Chief Pleas become an elected body of 28 members which was agreed in a referendum of the island's 600 residents.
Mr Crow told Mr Justice Wyn Williams that, once the new constitution begins operating in December, it will be up to the island's assembly to decide on any further reforms that may be needed, in particular to the historic offices of seigneur and seneschal.
The billionaire brothers own land on Sark and the whole of the neighbouring island of Brecqhou, which the Sark government claims to have authority over.
They object that Sark's hereditary seigneur and seneschal will still have an unelected role in government and claim it amounts to a violation of human rights.
They claim the seigneur is the "effective head of state" and the seneschal "the sole judge".
The brothers are challenging the British Privy Council's recommendation to the Queen that she approve the constitutional changes, which she did in April.
Putting their case at London's High Court their barrister, David Pannick QC said: "For many years, the Barclay brothers have sought to secure amendments to the laws and practices of Sark to remove relics of feudalism and to make those laws and practices compatible with the European Convention on Human Rights."
Sark's system of government dates back to 1565, when Queen Elizabeth I granted "letters patent" to the first seigneur to hold the island as a "royal fief".
Since then the seigneur, the seneschal and 40 landowners have had an automatic right to seats on the Chief Pleas. There are also 12 members who are elected every three years.
The self-sufficient, car-free island is just 3 miles (4.8km) long and 1.5 miles (2.4km) wide and has a resident population of about 600.
The only forms of transport permitted are horse-drawn vehicles, bicycles, tractors and battery-powered buggies.
The action is being defended by the Privy Council, the Secretary of State for Justice, the Lord Chancellor, and the Committee for the Affairs of Jersey and Guernsey.
The two-day hearing has now ended but Mr Justice Wyn Williams is expected to reserve his decision on the challenge until a later date.