Emirates Team New Zealand is going back to the America's Cup arbitration panel after Luna Rossa rejected its race course suggestion.
The defender had tabled a proposal with the challenging teams to return racing to the inner city race courses.
However Luna Rossa says it is far from fair and not acceptable.
Team New Zealand says it believes the plan offered equal use of the courses and says Luna Rossa provided no justifiable rationale for its rejection.
It is requesting formal mediation on the issue.