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The NZRL are being sued for $3 million by New Zealand sportswear company SAS for breach of contract.
The kit supplier believed they had a deal until the end of next year's World Cup but former NZRL chairman Andrew Chalmers negotiated a contract with international sportswear giants ISC worth $1 million over two-and-a-half years.
Proceedings will begin on December 15, when a timetable for deciding the case will be set out.
The timing of the litigation could not be worse for the NZRL, who are trying to pick up the pieces after news of a projected $1.25 million loss in 2007, the resignation of Chalmers and the three independent board members and abysmal results for the Kiwis against Australia and Great Britain.
SAS managing director Tim Connolly said they had no option but to sue the national body.
"We have litigated for $3 million, which is a breakdown of missed merchandising opportunities for the World Cup plus a variety of other compensation," Connolly said.
"We believe we have a contract in place until the end of the World Cup."
Well placed sources, however, said SAS had a "zero" chance of succeeding in their case and that Connolly had offered to settle for $80,000 but was turned down by the NZRL.
"There wasn't a contract," one source said. "Connolly is just trying to do this to exert pressure so he can get a domestic supply agreement."
NZRL general manager Peter Cordtz said they were confident of winning the case.
"Absolutely," he said. "We wouldn't have proceeded with ISC if we didn't have the right to do that. We took extensive advice before entering into the agreement with ISC.
"The key thing is that we have set out to ensure our commercial deals pay their way. The Kiwis are the only part that generates revenue [for the NZRL] and we have to ensure we maximise our returns."
SAS has been the kit supplier for about seven years and entered into a new agreement with the NZRL early in 2006.
"It was a rollover of a contract we had," Connolly said. "The contract had been in play for the previous three years and had worked well for the previous two parties up to that stage. I'm not saying the contract is watertight but we had a good relationship with the the board. It had worked fine before that and both parties were happy.
"Things certainly changed when Andrew [Chalmers] took over. We got caught out with no warning so we had a lot of merchandise. For a small company, it wasn't good for us.
"All of the ex-board members who voted ratified [the agreement] have all said they are happy to stand up in court and say they fully agree with our position."
ISC is one of the biggest names in rugby league sportswear, supplying kit to six NRL teams as well as 12 UK Super League clubs. The Kiwis and All Golds wore kit supplied by ISC during the recent internationals.
