The dispute between Swiss biotech billionaire Ernesto Bertarelli and New Zealand America's Cup captain Russell Coutts is now going through the legal process in Switzerland.

Bertarelli contends that Coutts breached his contract, Coutts that Bertarelli terminated it illegally.

"We've started the arbitration procedure about my employment contract," Coutts said. "Both sides have nominated one arbitrator and those two nominate a chairman and that's all been done. We're sorting out the date for the first hearing."

Coutts is fighting on two fronts. Twice the Swiss Cup holders have changed the protocol, one of the key documents governing the next America's Cup in 2007. The last alteration, on Jan 21, effectively prevented Coutts from moving to any other team, in any capacity. Made without consultation, the change affected many other sailors and tops the agenda at all challenger meetings.

"I disagree with the rule entirely," Coutts said. "I want to get my freedom back. I want to sail in the next Cup if I choose to."

"Whether I sail is contingent on a lot of things; on a team wanting me or some other alternative that I might decide to pursue," he said. "But at this stage I can't make any plans until they rule on the rules."

Bertarelli has said it will be impossible for Coutts to sail for a rival team because of a non-compete clause in his contract. Coutts disagrees.

"The non-compete clause does not apply if the contract was terminated illegally or if they have breached certain terms of the contract," he said.

The New Zealander has been linked with the German software magnate, Hasso Plattner, of SAP. Coutts will race on the Farr 40 circuit on Plattner's Morning Glory.