The legal challenge centres around the league's Associated Party Transaction (APT) rules, regarding commercial and sponsorship deals with companies owned or associated with the club's owners.

Those rules dictate such transactions have to be independently assessed to be of fair market value and have been a topic of scrutiny for some time.

In February, clubs voted to approve tougher rules regarding how such deals are valued. 

Initially introduced in December 2021 in the wake of Newcastle United's sale to the Saudi Arabian Public Investment Fund, the rules are designed to prevent clubs from inflating commercial deals with companies linked to their owners.

The Times reports City believes the rules are "unlawful" and it wants to seek damages for revenue lost by preventions made by those rules.

Within a 165-page legal document, City argues it is victims of "discrimination" and say the Premier League's decision-making process of needing 14 out of 20 clubs to agree is a "tyranny of the majority".

The dispute will be settled during a two-week private arbitration hearing beginning next week.

The other 19 clubs have been invited to participate in the legal proceedings, with between 10 and 12 reportedly stepping forward, providing either witness statements or a letter detailing evidence in support of the Premier League's defence against the claim.

The result of this legal battle could affect the outcome of City's hearing into its 115 charges of alleged rule-breaking related to financial fair play, which is due to take place in November.