This doesn't seem to match your description, but it produces the expected
output, it just takes the first Contact with each unique Nid value
<xsl:stylesheet version="2.0" xmlns:xsl="
http://www.w3.org/1999/XSL/Transform">
<xsl:output method="xml" indent="yes" omit-xml-declaration="no"/>
<xsl:strip-space elements="*"/>
<xsl:template match="objects">
<xsl:for-each-group select="Contact" group-by="Nid">
<xsl:copy-of select="."/>
</xsl:for-each-group>
</xsl:template>
</xsl:stylesheet>
$ saxon9 nid2.xml nid2.xsl
<?xml version="1.0" encoding="UTF-8"?>
<Contact>
<Id>003j000001DQMkcAAH</Id>
<Updateeddate>2016-09-08T10:31:24.000Z</Updateeddate>
<Nid>892828740</Nid>
</Contact>
<Contact>
<Id>003j000001DQMlXAAX</Id>
<Updateeddate>2016-09-08T10:22:47.000Z</Updateeddate>
<Nid>879284114</Nid>
</Contact>
<Contact>
<Id>003j000001DQMlYAAX</Id>
<Updateeddate>2016-09-08T10:22:47.000Z</Updateeddate>
<Nid>882692370</Nid>
</Contact>
David
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