If a defendant says they have documents proving their case but will only show if a non-disclosure is signed and assuming the documents fail to vindicate the defendant, can I break the NDA and use those documents in court against the defendant? Thanks.
No contract can limit a court's jurisdiction
An NDA is a contract: it cannot prevent the application of the judicial process. Should your dispute reach a courtroom, the NDA and the documents it seeks to protect are all admissible and you should subpoena them from the defendant and submit those copies to the court (that way you are not breaking the terms of the NDA).
What is not admissible is bona fide "without prejudice" documents: that is documents that contain admissions and offers made in a genuine attempt to settle a dispute. This privilege is established by the context of the document, not by if it does or does not have the words "without prejudice" on it (except, of course, that their presence/absence is part of the context).