Iraq's oil ministry has filed a complaint to the International Chamber of Commerce (ICC) after Ankara, the capital city of Turkey, said that oil from the Kurdish region was being exported to international markets.
Baghdad said in a statement it decided to take legal action as "transporting and storing crude oil from Kurdistan, and by loading that crude oil onto a tanker in Ceyhan, all without the authorisation of the Iraqi Ministry of Oil, Turkey and BOTAS have breached their obligations under the Iraq-Turkey Pipeline Agreement."
Turkey's energy minister, Taner Yildiz, had said that shipments had already begun, signifying an end to the feud between Iraqi Kurdistan's regional government and the central government in Baghdad.
Yildiz also said that Iraq will be the one overseeing the sale, telling Today's Zamam that "our storage tanks in Ceyhan for Northern Iraqi oil are now full. There is not any obstacle for the sale. This oil belongs to Iraqis and they are the ones who will sell that."
However Iraq has now threatened legal action, saying that it must authorise all sales, and that it hasn't given the go-ahead on the shipment.
Baghdad has been locked in a spat with the autonomous region over the Kurds' right to export the oil without going through Baghdad.
Kurdistan has been autonomous since 1991 but it relies on good relations with Baghdad in order to receive its share of the national budget.
The bitter dispute led to the central government refusing to pay Kurdish Regional Government (KRG) workers earlier this year and has delayed approval of the annual budget.