Place a saucepan over medium heat. Add 1 tablespoon of olive oil and add the onions and garlic. Saute until translucent and starting to brown, about 10 minutes. Remove from heat and set aside to cool.

Place the chopped fish, breadcrumbs, cilantro, parsley, nutmeg, lime juice, salt, pepper, and half of the sautéed onion and garlic mixture into a large mixing bowl. Mix until combined well. Set aside.

Place a deep saucepan over medium to high heat. Add the remaining sauteed onion and garlic, tomatoes, 1 teaspoon of salt, and cook for about 15 to 20 minutes until the tomatoes thicken and cook through. Add 1 cup of water. Stir mixture well and bring it to a simmer. Cook for about 20 more minutes until the sauce thickens.

Take 1 tablespoon of the fish mixture, form it into a ball shape with your palms and place it into the simmering sauce. Continue with the rest of the fish mixture until all the fish balls are submerged in the tomato sauce. Cook the fish balls uncovered for about 10 to 15 minutes until they are cooked through.

Serve the albondigas hot with a side of rice.